Realty players fear grant of TDR based on road width will halt redevelopment in Mumbai

Maharashtra Govt has issued notification seeking objections and suggestions from stake holders

Realty players fear that the Maharashtra government’s proposal to modify regulations for grant of transfer of development rights (TDR) in Mumbai based on road width will adversely impact redevelopment projects across the city. The state government for the third time on Wednesday issued a notification in this regard, seeking objections and suggestions from stakeholders.

The government has proposed 0.50 TDR and floor space index (FSI) of 1.50 for plots fronting on road width of  9 -12 mt, for 12-18 mt, 0.75 TDR and 1.75 FSI, for above 18 mt and up to 24 mt, 1 TDR and 2 FSI, for above 24 mt and up to 30 mt, 1.25 TDR and 2.25 FSI and for more than 30 mt, 1.50 TDR and 2.50 FSI. Further, for the plots fronting on road width of 2, the government has proposed 4 TDR and 5 FSI.

TDR is the development potential of the land (benefit arising from land) while FSI is the ratio between the built-up area allowed and plot area available.

National Real Estate Development Council president Sunil Mantri told Business Standard, “In a old congested city like Mumbai, restricting redevelopment based on road width will be completely unjustified and unrealistic. The problem with the city is that many such buildings, constructed more than 50 years ago, are standing on a smaller road width area and stocking redevelopment by restricting the floor area ratio (FAR) will create chaos. Neither the landowners nor the occupants will benefit. On the one hand, the government is talking of liberalising the FAR regime by charging premiums but, on the other hand, it wants to restrict by road width. The new Development Plan was prepared giving FAR relaxation between 4 and 8 and contemplating to generate huge revenues by way of charging premiums which will also get impacted heavily if the notification is implemented.”

Currently TDR regime is Rs 6,000 per sq ft which was available around Rs 3,500 sq ft before a few months. Industry players said the increase in TDR prices had already affected property market in the city.

JLL India’s head, Research & Real Estate Intelligence Service, Ashutosh Limaye said if TDR was not allowed, redevelopment of areas, where older developments are associated by narrow roads, would be extremely difficult and it would pose further risk of building dilapidation and possibly collapses. “So, irrespective of road widths, TDR should be allowed. But at the same time, careful planning and implementation for up-to-date infrastructure has to happen to support it. Stopping use of TDR in areas where road widths are narrow is not a solution, augmenting infrastructure is. I agree with the logic that TDR should be used judiciously as a planning tool. It is a potent tool to guide densities as well as facilitate redevelopment. The third angle to TDR as an effective planning tool is its ability to provide required infrastructure when densities and redevelopment are being worked out,” he noted.

Limaye said if the location was attractive and the projects feasible, most developers would like to work in the redevelopment space in that particular locality.

Further, Nahar Group vice-chairperson Manju Yagnik said there were over 80,000 old buildings waiting to be redeveloped, in congested localities and adjacent to roads that are narrower than 9 meters. Therefore, according to draft circular, TDR would not be applicable to such structures. This would halt all redevelopment activity in the city. If timely redevelopment of these buildings was not undertaken, they might crumble.

Yagnik suggested the government reconsider the proposed draft as it contrary to Development Plan.

 and will be a major setback for Mumbai’s redevelopment process if necessary corrective measures are not taken immediately.