Increased FSI in Real Estate

The double proposals by Municipal Corporation Of Greater Mumbai (MCGM) to hike the floor space index (FSI) to two and height of buildings 32 meters might result in the vertical growth of the city? Industry experts feel that this will also be an answer to the lack of affordable housing in Mumbai.

The Financial Capital of India, Mumbai has already been staggering under the burden of skyrocketing prices and lack of availability of land development. With lack of affordable housing posing a huge challenge in the city, MCGM has come up with two proposals in draft development plan (DP), namely, hike in FSI of up to 8 in height from existing 24 meters to 32 meters. Expert opine that while the move will lead to healthy vertical development it will also put pressure on the city infrastructure

The CEO, Raheja Homes Builders and Developers, avers, FSI hike surely will increase the pressure on the present infrastructure. However it is also important to understand requirements of middle-class purchaser can only be met if vertical growth is promoted by the ruling government. Hence the increase in FSI will help a common man to a common man to achieve his dream of owning a home in Mumbai. At the same time, the government will need to work on upgrading the existing infrastructure so as to support the increased burden he added.

On the antithetical, the director,ShapoorjiPallonji Real Estate, DeepeshSalgia is of the opinion that there are hardly any buildings that are planned with the height less than 32 meters, so the 32 meter rule will hardly have any impact on the overall raising.

REDEVELOPMENT PROJECTS TO BENEFIT
The footslog in FSI is expected to give a boost to several redevelopment projects in South Mumbai which have been stuck for long. If FSI is higher this will help the resident get bigger houses – 800 sq. ft. minimum carpet area of their existing 100sq.ft on the FSI of 8. The housing societies can avail the maximum benefit. In the case of composite redevelopment, where several buildings are redeveloped together, the FSI of 8 will provide better amenities to existing resident. The joint redevelopment will help create more open space for recreation facilities adds Raheja.

Mumbai HC ban to be a spoiler
On 29th February 2016, the Bombay High Court has issued a stay order on new construction (both residential and commercial) in the city to be effective from 1st March 2016 as the state government and BMC has failed to comply with the  Government Municipal Corporation rules, 2000 at the Denoar and Mulund dumping grounds. While these diminution will not be applicable for plans of Hospitals, Dispensaries, Educational, Institutions and redevelopment projects. However, the move might deter purchaser from participating in redevelopment as they might face problems in developing their share of the property. This will impact development in the city and will result in a steep increase in property prices due to lesser supply an higher demand.

Localities to be affected
Localities such as central Suburbs of Mumbai and BandraKurla Complex (BKC) will be benefited. The increased FSI will push developers to come up with the housing projects in the BKC and change the demographic of the area. Further, the planned shift of the airport to the new terminal, already operational Metro-1 and the proposed Metro 3 (SEEPZ – Bandra-Coloba) shall transform Andheri (East)Airport Zone in to a mega commercial hub. Residential developments in and around Andheri East shall see a huge spurt in demand during the next few years, shares Salgia.

Price Correction On The Cards
The increase in FSI will ease space constraints in Mumbai and might help eliminate price distortion in the property market. The composure in the FSI will increase supply drastically which would ease out the pricing dynamics coming months, shares Raheja.

Boost for Affordable Housing
Increases FSI means vertical planner which in turn would lead to increased supply. This would eventfullypromote affordable residency in Mumbai. For years, Mumbai’s real estate industry is been struggling due to lack of available space for development. Taking a cue from other countries like Singapore and Dubai, Mumbai going vertical is only practical solution for creating affordable housing and adequate infrastructure. The increase in biodegradable floor space index (FSI) from the present level of 1.33 to 2 and in some cases even up to 5 is in support of the vertical expansion of Mumbai City. The proposal also includes an FSI of 4 for an affordable housing and a similar FSI will be granted to township projects.

Hence, experts believe that in Mumbai, increased FSI can prove to be a plausible solution for lack of affordable house as and skyrocketing property prices provided infrastructure is created to support the residential planner. This will not only create the much needed housing stock in Mumbai but will also provide an opportunity to multiple home seekers to multiple home-seekers to have a shot at owing their dream homes.