How Greater Mumbai Draft Development Plan 2034 Can Transform Real Estate Sector
Real estate developer's body Confederation of Real Estate Developers' Association of India (CREDAI) is observing a nation-wide token strike today (October 13) , protesting the suicide by a member. A developer, late Suraj Parmar, who was the president of Thane chapter of Maharashtra Chamber of Housing try, committed suicide last week due to alleged harassment from various government agencies.
Another major reason behind the strike is the uncertainty regarding the draft Greater Draft Development Plan 2034. The draft is currently being revised as many pointed out factual mistakes in it. al estate developers claim that construction has nearly come to a halt in Mumbai because it is not clear when the draft policy would materialise.
A look at why the Greater Draft Development Plan 2034 is important:
When the proposals in the draft development policy are enacted, development of real estate in Mumbai will become easier. There are many zones in Mumbai where development is not allowed, especially because of coastal zone regulations. Such zones will be opened up for development. This will lead to greater economic activity in the city. It will also open up unutilised land for development, like 1,287 acre of the Aarey Milk Colony.The draft plan proposes raising floor space index (FSI) in the city. FSI is the ratio of the area of floor to the area of the plot on which a building stands. In , FSI is mostly 1.33, and it is one in residential areas. If the suggestions of the draft plan are accepted, FSI may go up to eight in the densest parts of Mumbai. In areas near mass transit corridors, FSI is likely to rise to a range of five-six. When real estate developers are allowed to build greater floor space on a limited area plot, floor space would no longer be too scarce in the city. This will lower home prices, and increase the consumption of floor space.A large number of buildings in Mumbai are in a dilapidated state. But, redevelopment of such properties is rare. This is because floor space declines when old buildings are redeveloped. This gives owners little incentive to redevelop such properties. When the FSI is raised, redevelopment activity would also gain momentum. Easier FSI norms will boost construction activity in the city, leading to more jobs production. A higher FSI ratio will also enable Mumbai to house more migrants, further boosting construction activity. Construction of higher buildings will help concentrate economic activity in the denser areas of Mumbai. This will allow people to access offices, schools, hospitals, restaurants and other institutions of importance easily.In Mumbai, home buyers pay an extra premium for open space. When FSI is raised, open space would become common due to compact development. This would bring property prices down. Moreover, streets in Mumbai will be realigned, with greater space for vehicles and pedestrians. There will be more open spaces in streets, too.Higher FSI will lead to greater revenues for local authorities in Mumbai and for the Maharashtra government. The revenues earned from a greater construction activity would be more than sufficient to meet Mumbai's infrastructural needs.