Higher FAR Is One Of The Reasons Behind Noida's Growth
Noida has the highest floor area ratios (FARs) in the National Capital Region (NCR) , ranging from 2.75 to 3.5. If the FAR is 3.5, this means that on a 1,000-sq ft plot, a building can at most cover up area of 3,500 sq ft. So, if a building occupies the whole plot, a developer is allowed to build at most three and a half floors. This is not high by global standards, but in major Indian cities, FAR tends to range between 1 and 2. In central areas of Mumbai, it is usually 1.33. As Noida is far less dense than Delhi or Mumbai, building height restrictions seem to be more favourable to real estate development. This is partly the reason why Noida has become a more prosperous city in the past four decades. According to some surveys, Noida is the most livable city in the National Capital Region.
As Delhi is a densely populated city, and as large tracts of land is publicly owned, it is difficult for private firms to expand within the city. This is why cities like Gurgaon, Noida, Ghaziabad and Faridabad became more populated in the past few decades. The NCR became not just more populated in this period but it also became economically prosperous.
Noida became one of the fastest growing Indian cities because the FAR was along with other business-friendly policies. The proximity to Delhi and the extension of the Delhi Metro to many parts of Noida also played a very important role. Authorities are also building roads, flyovers and other infrastructure as the demand for better infrastructure is growing.
In Noida, for example, real estate projects get clearances in six to eight weeks. Moreover, infrastructure in some parts of Noida is good by Indian standards, though there is much room for improvement. This is why Noida has become one of the most popular office space destinations in India, too. Office space in Noida costs less when compared to Gurgaon and Delhi. This doesn't mean that conditions are truly favourable for developing real estate here. Land acquisition is often locked in litigation, and there are many cases in which homebuyers are not too sure whether they will get their flat on time.
Even though many claim that higher FARs will benefit developers, this does not seem to be true. Residential and office space are reasonably priced in Noida. This is not surprising, because when the FAR is higher, real estate developers will be able to build more floor space using the same amount of land. This means that when the FAR is higher, developers will be able to increase the supply of floor space. When the supply of floor space keeps up with demand, prices are not likely to rise.
In most industries, prices of goods tend to fall every year when adjusted for inflation. This is because supply tends to keep up with demand. Electronic goods are an extreme case. The industry produces much better goods at a cheaper price every year. This is partly because of technological advancement, and partly because when demand rises, mass production become more common. Mass production lowers the cost of goods, because the cost of producing goods is spread over large numbers of people. This, whoever, has not happened enough in the case of housing and other forms of real estate development. This is partly because of building height restrictions. So, instead of helping developers, higher FARs have led to better office and living spaces for people.