High court quashes FSI increase in Mumbai

Buillders are anguished at this order since now they will have no other option but to raise rates by 10-15%.

The best thing is to move out of Mumbai into Pune, Bangalore, Hyderbad or Chennai .There is absolutely no point in paying 1.5 crores to live in 2 bed apt when your salary is a fraction of the loan.

The only people who can buy are those with black money or those whose Mumbai projects are going into redevelopment. Every building over 30 years in age is going for redevelopment and all these residents are getting a good package from the builders.

From what I hear the builders offer

18 months of rent
A lumpsum amount
20-25% extra carpet in the new building.

Many times some owners sell the flat to the builder and move into a different location.

I've seen some projects in my area getting sold out in no time and those flats are sold to mostly investors with deep pockets. End users rarely get a chance to participate in this process.

so the best thing for anyone who can, is to move out and get out of this mess. Ive also noticed a tendency of some of the owners to move to Pune. Today's Times of India - Mumbai edition has a 4 page supplement on Pune real estate. That should speak volumes that Pune builders are courting the Mumbai population with the terms 'affordable' in every other sentence. 3000-5000 per sq/ft seems to be a steal when compared to 10,000 per sq ft in the Mumbai suburbs.

Hindustan times article is below.

Buying a flat in the suburbs will now get even more expensive, after the Bombay High Court on Thursday struck down the state’s decision to increase the Floor Space Index (FSI) for suburban constructions to 1.33 from 1.

The FSI determines the maximum amount of construction that’s allowed on a plot of land. An FSI of 1 means that on a 1,000 sq ft plot, construction cannot be more than 1,000 sq ft.

All new projects have to adhere to the ruling, which came after the April 2008 Government Resolution (GR) was challenged by resident Amit Maru.

This means builders will now have to buy more FSI through Transfer of Developmental Rights (TDR) from the open market. The maximum permissible FSI for suburbs is 2 of which 1 is permitted by default, and builders can acquire the additional 1 through TDR.

In the 2008-09 Budget, the state had decided to offer an additional 0.33 FSI on payment of premium, which reduced the amount of FSI builders had to acquire from private parties. This had, to some extent, reined in TDR prices.

Under the GR, the premium to be paid for the additional FSI ranged from Rs 7,000 per sq ft in areas such as Manori to Rs 23,000 in Bandra.

“We have to pay extra money to buy TDR from the open market and will pass this burden to consumers,” said Sunil Mantri, president of Maharashtra Chamber of Housing Industry and owner of a construction firm.

The court struck down the GR saying it’s against the Maharashtra Regional and Town Planning Act, 1966, as it does not have a provision for levying a premium.

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Battle for Mumbai's skies set to begin

Times of India reports

Mumbai: The skyline of congested areas in Mumbai like Girgaum, Grant Road, Bhuleshwar Nagpada and Parel could soon be filled with thousands of skyscrapers sprouting from every nook and corner, thanks to Thursday’s supreme court ruling.
The order comes as a major bonanza for builders because it once again allows them virtually unlimited floor space index (FSI) for redeveloping old, mainly pre-1940 cessed buildings in the island city. In 2005, the Bombay high court, which had admitted a PIL filed by some prominent Mumbaikars, had restricted this use of unlimited FSI on the grounds that it was leading to haphazard and unabated construction activity. The high court had observed that this rule had led to ‘subversion of urban planning’.
“Although the supreme court ruling will facilitate redevelopment of old and dilapidated cessed buildings, it will put pressure on civic infrastructure,” said a worried municipal commissioner Jairaj Phatak. However, he was confident that the island city will be able to cope up with this construction spree if the redevelopment is carried out in a proper manner.
When old buildings are torn down and rebuilt into towers, the space between two skyscrapers could be as little as five feet or even less. Mumbai’s development control rule 33 (7), which pertains to the redevelopment of cessed properties, gives sweeping powers to the municipal commissioner to relax the mandatory open spaces surrounding a building to five feet.
In congested Girgaum, opposite the Harkisondas hospital, a 38-storey tower is virtually kissing another 22-storey high rise next to it. In Nana Chowk, a pencil thin skyscraper has cropped up almost touching the adjacent building.
Over the past decade, many such residential towers as high as 30-40 floors have started springing up in areas like Girgaum, Nana Chowk and Grant Road where the civic infrastructure is already in poor shape. In fact, Mumbai’s tallest residential building, the 45-storey Shreepati Arcade at Nana Chowk, was redeveloped under rule 33 (7).
On Thursday, property redeveloper Pujit Agarwal of Orbit Corporation was ecstatic as several hundred redevelopment projects were in a limbo ever since the PIL was filed in 2004. “The Supreme court judgment has come as a relief for the entire island city, especially the two million tenants living in such buildings. Over the past eight years, we have all undergone a learning curve,” he said.
Rajesh Vardhan of Vardhaman Developers said the judgment has come at a time when several dilapidated buildings were crumbling, leading to loss of life. “Hopefully, today’s ruling will lead to systematic development,” he said.
Agarwal said that henceforth the BMC should ensure it does not condone the compulsory open spaces and in only exceptional cases, should it relax it to five feet. “The state housing authority, MHADA, should carry out due diligence to ensure that the list of tenants is not inflated by any builder in order to get more FSI. Thirdly, developers must be encouraged to go in for cluster redevelopment,” he added.
The Property Redevelopers Association said more than 500 proposals for redevelopment of cessed properties are pending with Mhada and BMC. “The pace of rehabilitation will now increase,” it said.
Four years ago, in a PIL filed by the late J B D’souza, urban planner Shirish Patel and civic activist Cyrus Guzder against the “misuse” of 33 (7), they pointed out how some builders inflated the number of tenants to avail extra FSI.

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