The BMC said its new building guidelines, which seek to prevent developers from misusing concessions granted to them, will not affect redevelopment projects.
Several MLAs complained that these projects, especially in the island city, will come to a halt if concessions are withdrawn and a 100% premium is levied on areas like flowerbeds, voids and terraces.
So far, such areas were not counted in the building’s floor space index (FSI). However, most developers sold these free spaces to flat buyers and encouraged them to illegally amalgamate them into their homes. The BMC has proposed that builders can avail 25% additional FSI to build such areas on which a 100% premium will be charged. This 25% extra FSI can now be used for any purpose—either for elevational features or living areas, or a combination of both.
Civic chief Subodh Kumar said redevelopment projects will not be hit because developers who provide free 300 sq ft houses to existing tenants, do not build free-of-FSI features such as balconies, flower beds in rehab buildings. These incentives available in a rehab building are instead used up by the developer in his free sale building, thereby increasing his profits. The commissioner said the BMC will not charge premium if the developer provides extra living space to tenants in the rehab building.
“The builder liberally seeks free-of-FSI features in the free sale building so as to maximize his total built-up area. This in fact distorts the ratio of built-up area for sale visà-vis built-up area for rehab,” he said.
Under the redevelopment scheme, for every 100 sq ft that the builder constructs free of cost to the existing tenant, he receives 50 sq ft or 50% incentive FSI which he can sell at market rate.
Debunking claims made by builders that 100% premium for the additional 25% extra FSI will push up property prices, Kumar said, “Land prices will moderate once people who were receiving very high freeof-FSI areas cease to get undue benefits. Builders are already charging customers for the entire area (super built-up area).” He added, “Property prices are more a function of supply and demand. There is strong evidence to suggest that there is hardly any relation between cost and sale price at present.”
Kumar said under the new guidelines, if a developer decides not to build flower beds or balconies, he could construct more rooms or larger rooms utilizing the compensatory FSI. “Even if such flower beds and cantilever balconies are later turned into living area/bedroom/kitchen, it will not be considered a violation,” he said. “The idea is to simplify things and insulate the flat owner from legal action and harassment later,” Kumar added.