The Hard look
For a city where land is scarce, redevelopment of slums, chawls, old tenanted properties and co-operative housing societies has been the primary factor fuelling the creation of both housing and speculative real estate. With the new urban renewal policy attempting a holistic approach, SHALINI NAIR and SANDEEP ASHAR analyse if it will indeed create affordable housing and better infrastructure for Mumbai residents
More housing stock but not necessarily affordable housing
In a city where the average cost of a roof over one’s head is an eye-popping Rs 2.8 crore, the fillip to redevelopment through the new urban renewal scheme, which extends the cluster redevelopment policy to the suburbs, will definitely mean more housing stock. However, for a city that has long defied the simple economics of abundant supply acting as a check on price rise, the policy may not necessarily translate into creation of affordable housing.
The new cluster policy allows developers to reconstruct a cluster of buildings over a plot area of 4,000 square metres in the island city and 10,000 sqm in the suburbs. Developers can make their profit by constructing an area which can go as high as 100 per cent of the area used to rehabilitate the existing tenants or flat owners.
With developers looking at creating exclusive islands of premium residential towers in place of old tenanted low-rises, the sprawling apartments that are part of the sale component range anywhere from three-bedroom flats to duplexes and penthouses. While the Maharashtra Housing and Area development Authority (MHADA) does get a part of the surplus area left over after tenants are rehabilitated and the developers get their incentive share, it doesn’t account for much. The new policy shrinks the potential affordable housing stock further by stating that instead of using MHADA’s share of apartments as general public housing, priority should be given to using it for rehabilitation of those affected by infrastructure projects of BMC, MMRDA or the housing board itself.
Urban planners suggest that the only way to ensure a good supply of affordable housing is to increase MHADA’s share in the redevelopment bounty or limit the unit size of a specific percentage of the sale component. Vidyadhar Phatak, former chief planner for the MMRDA, points out that Urban Land Ceiling Act (ULCA) also had a similar clause that required developers to create smaller size units in their sale component if they did not want to hand over land to the government for the sake of public housing. However, it was the most abused clause that finally led to the scrapping of the Act itself.
“Leaving the provision of affordable housing to developers without any institutional checks in place would lead to a repeat of the ULCA misuse where smaller apartments existed only on paper while on ground several units were combined to create expensive larger apartments,” Phatak says, adding that it would be better if MHADA is handed over a bigger share of the redevelopment pie.
The existing policy mandated that the developers should hand over MHADA’s share within the area earmarked for the cluster project itself. Going against the grain of inclusive housing, the new policy allows them to get away with handing over the share in some other location within the same ward outside the cluster area. The idea of modest public housing projects abutting super-luxury high-rises is considered as a price and brand-value dampener by most developers.
Almost five years after the cluster scheme was introduced in the island city in March 2009, MHADA is yet to receive a single house in its public housing coffers even though on paper it is slated to receive 1,600 houses from the handful of proposed projects.
According to latest data from the real estate research agency Liases Foras, the average unit size of a new apartment is 2,400 sq ft in the island city and 1,300 sq ft in the suburbs, the former commanding an average price of Rs 31,600 per sq ft and the latter a price of Rs 13,000 per sq ft; both well beyond the reach of the average person. Presently, two projects are under way as per the existing cluster scheme — One Avigna Park at Lower Parel and a project in Bhendi bazaar by the Saifee Burhani Trust.
Several other projects are yet to take off on ground as developers were waiting for the more financially-beneficial new policy.
New makeover plan bursting at its seams
The Prithviraj Chavan-led government has decided to pursue a fresh approach to rebuild Mumbai in a more planned manner. Under the revised cluster policy, town planners of the BMC have been asked to mark out and plan clusters. Clusters will have to be shown in the city’s new development plan, which is currently under preparation. Besides this, the government has also asked Municipal Commissioner Sitaram Kunte to prepare a holistic Urban Renewal Plan (URP) involving clusters based on various themes.
A senior state official says once the DP is prepared or the URP readied, developers will be able to undertake development of mapped clusters. The official says this was being done to allow for a more planned and holistic development of infrastructure in and around a cluster project.
It would now be the responsibility of the civic town planners to plan a cluster and decide public reservations to be developed under it after studying the carrying capacity of the land and the existing infrastructure in question, the official says.
Under the old policy, identification and planning a cluster was the developer’s responsibility. The government will soon amend Maharashtra Region and Town Planning (MRTP) norms to allow the civic body plan a cluster, the official adds.
Global cities like Singapore, Malaysia, Hongkong, Shanghai, Chicago, Birmingham, and New York have successfully used this approach for transformation of urban landscapes.
Developers say policy needs fine-tuning
One of the main reasons for revising the old cluster policy was the constant complaints from the real estate sector about the non-viability of the scheme. Developers now say the new scheme needs some more fine-tuning. According to Kailash Agarwal of Nish Developers, one of the only two developers with ongoing cluster projects, the main impediment for realising the scheme is the clause that requires existing commercial occupiers to be given an area equivalent to their existing area in commercial form itself. “Most commercial occupiers want their units on the ground floor. With the Supreme court ruling making it compulsory for developers to provide the open recreational area on ground and not on the podium, it becomes very difficult to accommodate every commercial tenement on the ground floor,” Agarwal says, adding that commercial units should be allowed to opt for residential apartments of the same size to tide over this hurdle.
Focus on repair, not merely on redevelopment
For a city with sky-high real estate prices, almost all urban renewal policies chant the redevelopment mantra of generating more housing stock.
However, planners say the city has neglected to frame a repair policy that provides incentives for ensuring the longevity of structures. Conservation architect Vikas Dilawari says that instead of laying overemphasis on redevelopment by providing higher FSI, the city also needs a repair policy where tenants or flat owners are given nominal Transfer of Development Rights (TDR), also known as floating FSI, which can then be sold by the flat owners and the money used to maintain their building or carry out urgent repairs. “Many of these structures are easily repairable. Instead of giving 4 FSI to developers, those living in the buildings can be given as low as 0.25 TDR,” Dilawari says, adding that the flat owners/tenants can give a written undertaking that they would use the money generated to maintain their structure.
Old cluster policy versus revised policy
*What makes up a cluster?
Old: Any scheme of redevelopment of cluster of cessed buildings of 4,000 sqm or more in the island city
New: Any scheme of redevelopment of a cluster of buildings or structures over a minimum area of 4,000 sqm in the island city or 10,000 sqm in suburbs.
*Planning of a cluster
Old: Developers/promoters to identify and plan clusters
New: Clusters to be marked out by the civic body in the new Development Plan or identified under an urban renewal plan (URP) notified by the municipal commissioner. In cases where clusters are not shown on DP or the URP is yet to be prepared, developers can propose their own clusters.
Old: Old buildings in the island city paying repair cess (cessed buildings) to MHADA. These buildings were constructed prior 1969.
New: All 30-year-old authorised buildings in the island city and suburbs. The 30-year norm to be waived off in the case of buildings found “unfit to human habitation.”
Census-ed slum colonies found in a cluster. The total slum area must not exceed 50% of the size of cluster. Any government or semi-government agency-owned land falling in a cluster.
Ongoing cessed redevelopment projects fulfilling the criteria can also avail cluster project benefits. Other areas or buildings already developed or in the process of development can be included for planning purposes. But these won’t be a part of FSI calculations.
Heritage structures complying with prevalent guidelines
*FSI for redevelopment
Old: An FSI of 4 on the net plot area excluding reservation or FSI required for rehabilitation of tenants and the developers incentive, whichever is more.
New: An FSI of 4 on the gross plot area including reservation or the FSI required for rehabilitation of tenants and the developers incentive, whichever is more. Fungible FSI component excluded. Due to inclusion of reservations, the overall FSI permissible could go up.
Old: Tenants to be given apartments of 300 sq ft or more.
New: Tenants to be given apartments of 300 sq ft or more. Additional entitlement of 15-30 per cent depending on cluster size. Another 10 per cent bonus area if proposal is submitted either within three years of new policy coming into force or within one year from approval of the project. Tenants to pay construction cost for additional area above 1,076 sq ft.
Old: Not specific
New: Constructed area up to 1.33 times the owner’s plot area for unencumbered land. For lands, partly or fully encroached, the owners eligible for balance FSI after rehabilitation plus 25 per cent of the authorised built-up area on the plot. If the owner is occupying a plot, he is eligible for tenant benefits too. Slum-dwellers eligible for minimum 269 sq ft area.
Old: Depending on the rehabilitation component, the developers’ incentives varied from 55 per cent to 80 per cent
New: Developers incentives linked to market rates of the land under development and the cluster size. Vary from 55 per cent to 100 per cent. Higher the market rate and lesser the cluster size, lower the developers’ benefits
*Affordable housing component
Old: State housing board, MHADA, to get 67 per cent of the constructed area remaining after rehabilitation of tenants and developers’ incentives against the rehabilitation component (surplus area). The developers’ to retain remaining 33 per cent
New: Sharing of surplus area linked to market rates. MHADA’s share in surplus built-up area to vary from 55 to 70 per cent depending on the land rate. Higher share for MHADA where land rates are more.
*Transfer of affordable housing component
Old: Tenements coming to MHADA have to be provided within the cluster
New: Tenements coming to MHADA can be provided elsewhere within the same civic ward. Market rates to decide the extent of tenements to be provided in case of a transfer.
Old: Developers require prior consent of all owners and 70 per cent of tenants in a cluster
New: Developers require prior consent of 70 per cent of owners and 70 per cent of tenants. Government to acquire land owned by other non-consenting owners as per norms.
Old: Municipal Commissioner-led high-powered panel ratified a project’s technical and financial viability before recommending it to BMC, which after approval forwarded it to the state government for approval.
*Govt and semi-government land
Old: No specific provision
New:A chief secretary-led panel to decide terms of transfer of government and semi government lands in a cluster
*Implementation of a cluster
Old: The entire cluster to be developed at one go.
New: Phase-wise implementation permitted in clusters of 8,000 sqm or more in the island city and 20,000 sq m or more in suburbs. Augmentation of cluster not permitted after commencement certificate is obtained for 50 per cent of total built-up area.
*FSI for transit camps
Read more here– http://www.financialexpress.com/news/the-hard-look-a-house-for-aam-admi-/1211529/0
December 26, 2013 at 11:17 am
A Castle in Air ?
When people talk about someone ” building a castle in air ” , it is said in a derogatory way
But dreamers know no other way !
All of them build castles in air
And a few fortunate ( – and hardworking ) , even succeed in laying a foundation under that castle , at a later date !
Modern day civil engineers have even demonstrated that one can build a sky-scraper , by building the top-most floor first and the foundation , very last !
Being a dreamer , Arvind Kejriwal has , over the past few months , built just such a 18 story sky-scraper , in the sky ( – remember his 18 point questionnaire to Congress ? )
When he gets sworn-in as Delhi Chief Minister on 28th , he must start laying a foundation below that sky-scraper
It will have to be a foundation of ” Good Governance “, consisting of :
> Committed colleagues ( not Ayaram – Gayaram ! )
> Non corrupt bureaucrats
> Transparent processes
> Timely delivery of services to Delhi citizens
> ” Always Approachable ” ministers ( no beacons / security / bungalows )
> Periodic public scrutiny of Government’s performance
> Decentralized decision making ………….etc
I may have left out a few items
That is not important
What is very important is ,
In coming days , will AAP leaders conduct themselves with such honesty / dignity / transparency / sense of purpose , that ,
> 42 opposition MLAs would find it impossible to oppose the Vote of
Confidence on 3rd Jan ?
> Congress / BJP will be forced to take action against their own corrupt
leaders ( eg: Adarsh Scam ) ?
> Some 1400 regional political parties ( as per Election Commission
records ) may consider merging with AAP , in order to bring about
a change in the political climate of India ( a viable 3rd front ) ?
DEAR ARVIND ,
> Do not allow the past corruption crimes of Congress / BJP , to cloud
> Do not fritter away your energy in solving pea-nut problems
> Enlarge your horizon beyond Delhi, to cover whole of India
> Focus on 2014
* hemen parekh ( 26 Dec 2013 / Mumbai )