| Redevelopment is
the next BIG THING |
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The Indian Realty business is now
transitioning from the regular horizontal
construction methodology by going vertical;
hence redevelopment is the next big thing in
Mumbai.
Mumbai is known to be one of the most
expensive locations for property and property
rates are appreciating day-by-day. Also, the
availability of open plot is scarce; hence builders today are looking at redevelopment
of housing societies so that they can unlock
potential of unused FSI. With limited
availability of open land parcels in the city,
major developers are now looking at
venturing into the redevelopment space.
Redevelopment has become quite popular as
it is the most practical, economical and long
term solution, in a scenario where old
structures are proving to be superseded. It is a win-win situation for both the parties
but also there are a lot of hassles and
stringent procedures which need to be
followed.
Due to scarce availability of
unoccupied land, growth in Real
estate, particularly in terms of fresh
supply is largely dependent on
redevelopment activities. As a result,
slum redevelopment schemes as well
as redevelopment of old cessedbuildings
is playing a key role in Realty
development in Mumbai. Redevelopment
projects are also seen as
potential source of maintaining
buoyancy in the Real estate business
by the developers.
We are aware that there are constraints
on the availability of open land within
the city limits coupled with fast
growing demand for houses and shortage of housing stock. On the
other hand that there are thousands of
ageing buildings which are dilapidated
and have reached a stage where it is
not possible to carry out structural
repairs and rehabilitation as the same
are not economically viable. The
redevelopment of old building has
become a necessity since the problem
of old and dilapidated buildings in the
city of Mumbai grows more acute with
each passing year and with each
passing monsoon more and more
building becomes dangerous and unfit
for habitation. Many buildings collapse
each year, killing or injuring people.
Many of these buildings are run down
as they are not repairable and the only
solution is to put them down totally
and to reconstruct them.
Scarce availability has made land
parcels expensive in the city, resulting
in higher project cost. There are over
20,000 housing societies, 17,000
cessed buildings and over 3,000
MHADA structures are awaiting for
redevelopment proposals. In fact,
builders all over Mumbai consider slum
redevelopments extremely lucrative
and are vying for approval of such
projects from the Slum Rehabilitation
Authority of Maharashtra Government.
Maharashtra, which is planning to
prepare a master plan for the
development of megapolis, has
recently through an amendment to
Section 33(7) of the DC Regulations of
1991, proposed to raise the floor space
index (FSI) to 3 from the current 2.5, for
redevelopment of cessed buildings.
Mumbai requires a large number of
redevelopment projects especially for
increasing the availability of housing. If
used correctly, redevelopment can be
an economic engine that provides
additional and better quality housing,
helps in boosting property values,
creates jobs, expands business
opportunities, eliminates urban decay
and improves infrastructure. Other
potential benefits of redevelopment
are reduced urban sprawl, improved
economic competitiveness of a city's centre and better opportunities for
safety and surveillance. The prices of
land as well as flats are extremely high
in Mumbai. This is why, in the past
decade the government and
developers have been concentrating
on redevelopment projects.
With redevelopment becoming the
next colossal thing in the Real estate
sector, more and more developers are
planning to expand their project
portfolios. The main aim is to provide
housing that is affordable to every
common man. And not to overcharge
the buyer - charge mostly the
construction cost, and development
cost of the area.
It is vital that the government should
encourage redevelopment. But the
existing policies of government have
failed to encourage redevelopment /
reconstruction on the required large
scale because of the high economic
and social cost and low returns. The
obstacles and expected support from
the government are predominantly in
the areas like support from the
government in terms of framing of
proper laws for implementing
redevelopment scheme effectively.
The authorities should also consider
making the project economically viable
for the society/developer taking up
such schemes. Innumerable approvals
are required from the government for
one single scheme and it almost takes
one and half years for the
redevelopment scheme to get cleared.
There is an urgent need to fix up
accountability on government side to
clear the scheme in a time bound
manner. Redevelopment schemes
tend to take years due to issues like
obtaining members' consent and
official permissions.
The future of redevelopment in
Mumbai city is very bright. As the city
of Mumbai embraces the future, its old
creaky buildings are being replaced by
new swanky towers. Redevelopment is
a sort of a magic wand that is
completely changing the cityscape.
Redevelopment has been envisaged to
rejuvenate Mumbai which is facing
tremendous land shortage.
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