Track2Realty Exclusive: The redevelopment of a city depends on many local factors and cannot be replicated ad hoc. Mumbai has its own character and flavour and has to be developed according to local needs and infrastructure availability. The government in consultation with developers should work in redeveloping the city of Mumbai by improvising on infrastructure.

Diipesh Bhagtani, Executive Director, Jaycee Homes has a different take when he says Mumbai has a distinct identity of its own, and therefore, it is wise not to ape any other global city for redevelopment.

“Yes, Mumbai lags way behind in the redevelopment space when compared to other cities globally. A developer faces a lot of hurdles while undertaking redevelopment projects. Apart from the investments involved, many other issues tend to crop up during the course of redevelopment. A developer in Mumbai has to take the consent of at least 75% of members for the redevelopment of a building. Getting the consent of all the tenants is a cumbersome process but it is important; inevitably, there are many tenants who oppose redevelopment and take a legal route. This ultimately stalls the process for a very long time. Also, getting timely approvals is a major issue in Mumbai. a developer has to obtain about 50 odd permissions to get approval for the project. Nowhere across the world do developers face such issues. Therefore, Mumbai lags behind other global cities in terms of redevelopment,” says Bhagtani.

There is a general consensus that what Mumbai needs is a strong commitment to planning. Many of the case studies globally show that successful projects had well thought-out plans at their bases. The case studies reveal that one very successful strategy is the creation of strong economic development agency that has independence, power and financial resources necessary to move difficult projects through the development process.

Some key initiatives by the state government would go a long way in revitalizing the urban renewal challenge, particularly in context of Mumbai. This includes granting incentive FSI to developers for construction of  LIG/MIG housing in lieu of their free-sale component;  single-window and time bound disposal of  Annexure-11  for slum redevelopment schemes;  premium for fungible FSI under SRA projects should be lower compared to non-SRA projects and higher delegation of authority for fast track clearances to key authorities.

Ends…

Track2Realty Exclusive: The Umeda Exit of the Ikeda Route of the Hanshin Expressway system passes through this building. The expressway is the tenant of these floors. The elevator doesn’t stop on floor 5th-7^th; floor 4 being followed by floor 8. These floors consist of elevators, stairways, machinery and other stuff.

The highway passes through the building as a bridge, held up by supports next to the building, making no contact with the building itself. The building has a double core construction, with a circular cross section and special care is taken by providing surrounded structure to the highway to protect the building from noise and vibration.

Babulal Varma, MD of Omkar Realtors & Developers believes if policy incentives are granted, Mumbai is quite capable of replicating global standards, while providing its own unique solutions. According to him, the Urban Renewal Authority’s 4Rs strategy is now well established and gaining recognition in the community. The 4Rs are Redevelopment, Rehabilitation, Reservation and Revitalisation which, when applied together, enables a holistic approach to unlock the full potential of urban renewal.

“Today, Hong Kong has emerged as a world class city with tall vertical structures, sector-by-sector massive development, open spaces and greenery and most prominently, Floor Space Index (FSI) of 5–35. Similarly for urban revitalization, there are several policies and programmes in American cities. The pursuit of growth through economic development has become the key strategy in efforts to revitalize older American cities. All levels of government have come to play roles in the complex inter-governmental process of designing, funding and implementing economic development programmes,” Varma narrates as an example.

Pranay Vakil, former Chairman of Knight Frank, asserts holistic solution is needed for reaching global benchmark as urban infrastructure has not kept pace with the massive influx of people. Roads in a constant state of disrepair, perpetual traffic congestion and an overstressed rail network are characteristics of our transportation system. One only has to look global at leading western cities like Manhattan and London which have multiple efficient lines of commute into the CBD.

“Manhattan faces much of the same land constraints of Mumbai as well as the fact that it is a peninsular city. However, efficient and farsighted planning has ensured its evolution over and under the ground with skyscrapers and underground metros which maximize land-use. Its local railways connect locations up to 132 kms away and ferries provide connectivity to dense residential hubs like New Jersey. Using this example as a model, existing FSI norms for frontline city like Mumbai must be relaxed to maximize land-use,” says Vakil.

…..to be continued

Track2Realty Exclusive: Mumbai city is leading the redevelopment process though the volume is still a fraction of the overall potential. Of course, Mumbai’s problems are unique and need solutions which are also unique as socio-political fabric of the society and ethnicity is diverse.

Urban renewal has led to economic rejuvenation of various countries and Mumbai shall have to find its own unique solutions while learning from best global practices. While Singapore and Malaysia’s transformation was led by sagacious leadership, Hong Kong, Shanghai, Chicago, Birmingham and New York effectively used their political process to drastically improve quality of life, economic output and employment opportunities.

What is needed in the redevelopment process of Mumbai is to experiment with innovation and value addition locally. Redevelopment in the city needs to be accorded a macro perspective rather than a micro outlook.

When Hong Kong initiated redevelopment projects, it had to ensure that the target locations and the priority project areas, upon completion of urban renewal, would be attractive places to reside and work. Accordingly, strategic planning guidelines were charted out to guide their developments.

As a redevelopment module, it shortlisted 200 priority project areas. Upon redevelopment of the 200 priority project areas; there were major improvements to the dilapidated urban areas, which were transformed and brought up to modern city living standards. The major urban decay problem of the city was, hence, largely resolved.

Similarly, the case of Japan is one of the most inspiring and creative as conviction of betterment leads the policy and practical solution formulations. Gate Tower Building is a 16-story office building in Fukushima-ku, Osaka, Japan. And what makes it notable is the highway that passes through the 5th-7th floors of this building.

The highway is part of the Hanshin Expressway, a network (239.3 km) of expressways surrounding Osaka, Kobe and Kyoto, Japan. The Gate Tower Building is Japan’s first building to have a highway pass through it. And it had been nicknamed “beehive” referring to its appearance as a “bustling place”.

…..to be continued

Track2Realty:

The residents, many of whom are senior citizens or have young children, have lived there for more than 25- years. They bought the apartments legally and duly registered, while the cooperative housing societies have paid property taxes in full to the government, to date.

The apartments were constructed on land leased to Pure Drinks Ltd in 1955, which was permitted by B.M.C in 1980 to develop it for residential purposes. Without getting the plans approved, Pure Drinks along with unscrupulous builders, Yusuf Patel, B.K. Gupta and P.S.B Construction Co erected seven buildings, two of which were high-rise buildings of 17 and 20 stories.

During the construction period, the authorities issued notices to the builders to stop work. The builders were fined and they paid the penalty and resumed work. After the construction was completed nobody prevented the buyers from occupying their apartments or the buildings from forming co-operative housing societies.

Unaware of these violations, the residents bought the apartments believing that they would get the occupation certificates in due course, as was the norm 25 years ago. Since 2005 the residents have been in litigation with B.M.C. trying to defend their homes and save their families from being thrown on the streets.

Strangely the SC verdict delivered on the 27^th of February, 2013, has instructed the BMC to pursue the demolition notices issued to all flats above the fifth floor. In the verdict the SC has even condemned those portions of the structures that are within permissible limits for regularization. The area threatened with demolition is far in excess that is beyond the permissible FSI. They have also included the water tanks and the lift rooms. While the demolition will destroy the homes of all the families with flats above the 5^th floor, those below it will have to suffer without water and lifts besides tolerating dust and noise pollution created by the demolition.

The litigation was necessitated as Pure Drinks Ltd who by manipulating the syste, misguided the courts as well as the BMC, sold the balance smaller portion of the land, on which stands the now defunct Campa Cola factory, to Krishna Developers. The perpetrators of the crime have a double advantage. The additional FSI that shall accrue as a result of the unreasonable demolition of area that is within the permissible limits, in the 7 residential buildings, de-housing the ignorant flat purchasers, will eventually go back to Pure Drinks Ltd and they will be able to once again encash the same by redeveloping that much area.

Interestingly the demolition order contrasts sharply with the laws applied to the Ulhasnagar buildings or the Mumbai slum dwellers and forest land encroachers who were permitted regularization if they could prove occupancy from 1995.

Track2Realty Exclusive: Manoj John, VP, Corporate Planning & Strategy, RNA Corps maintains there is a correlation between cost of FSI and the nature of development that is viable given the high cost of land with limited development potential. If more can be built on the same land, the cost of land attributable to the project, which is as high has 50 to 80 per cent of project cost would come down. Hence, it would be viable for the developer to build residential projects at lower cost and hence make it more affordable.

“In a city like Mumbai affordable housing is ticket size of 25 to 50 lacs, and EWS housing is 10 to 25 lacs. I believe that if the cost of FSI can come down to one-fourth of what it is today, then it is viable for developers to build houses within city limits that can be sold for about 4000 to 5000 psf. Today these rates exist in locations 30 to 40 kms away from the city,” says John.

However, Devang Varma, Director, Omkar Realtors & Developers has a caveat here. He says more often than not, the relaxations end up being exploited rather than put to good use like affordable housing. According to him, FSI relaxation is not likely since existing infrastructure is a major issue.  Enhancement of infrastructure also looks to be a bleak possibility owing to Mumbai being already highly congested with higher possibility of inconveniencing the system more.

“There is nothing like ideal FSI. FSI is essentially a co-related function of population and the required infrastructure. With the current population of Mumbai one can see the current scenario which can be aptly described as Chaotic and nothing less. Hence, in a way FSI norms may not fall in the category of archaic with amendments already having been made vis-à-vis prevailing situations. No further increase in FSI can be and should be fathomed since that would lead to further degradation of life in Mumbai,” says Varma.

There is also a school of thought that people should be encouraged to move out to MMR regions by increasing FSI in MMR regions and enhancing infrastructure over there or encouraging township schemes.

A status quo is alarming as Mumbai which had an average FSI of 5 which over a period of time got reduced to 1.33 & 1. Lack of vision, concern of public good and scientific approach towards urban planning resulted in ignorance over the issue by the respective governments.

Now the government seems to be scared to take bold decisions as they may be blamed for being pro-builder policies. Since the majority of land available for development is with central, state and local governments, what government needs is to show a political will and take some steps in decongesting the city and creating more housing stock, within or outside the main city may depend on the policy framework .

Ajay Maken’s wishful statement has not been responded by the State Government so far. Urban planning experts also understand FSI relaxation is not as easy as making a statement at the conference.

Real estate may also not be unanimous over the ways & means of FSI relaxation or the shape of things to emerge in overall infrastructure development in Mumbai, but Union Minister for Housing & Poverty Alleviation has definitely set the tone for a debate on an issue which the sector always keeps pushing through its channel of policy advocacy.

Track2Realty Exclusive: For quite some time the developers in Mumbai were making pitch for the review of FSI in the city which they termed as archaic. Their grouse has not been lacking the merit also.

Facts speak for themselves. In 1964, FSI was introduced and set at 4.5 in Mumbai. While FSI is progressively relaxed in most global cities, in Mumbai the experience has been the reverse. FSI was reduced to 1.33 in 1991.  The city has one of the lowest FSI and floor space per person in the world.

Urban planning experts maintain that FSI below 5 spells disaster for any mega city like Mumbai. The developers have been asking to be increased as much it can be, or removal of FSI norms just like Andhra Pradesh as a much better option.

About 50 per cent of population in Mumbai stays in slums. Also about 84 per cent of homeless people are self-employed and contribute towards the economic growth. Since they live close to their workplaces and are an integral part of the India’s urbanisation story, irrespective of the location categories we need to create affordable housing even in the premium locations of mega cities.

What has added fuel to the fire of relaxed FSI norms is that now even the Union minister Housing and Poverty Alleviation Ajay Maken has made a strong pitch for a review of floor space index (FSI) policy of mega cities including Mumbai for encouraging the affordable housing. Maken believes this can be one of the solutions to tackle increasing urban development challenges.

“There is a need to review FSI policy and make appropriate changes to boost the affordable housing in Mumbai. The State is the responsible authority to do so and in our opinion it should consider this option. The policy for providing ‘Infrastructure Status’ to the affordable housing scheme is on the cards to improve the urban housing scenario. This can be treated as a sub sector of real estate and at least, this sub sector can be given the infrastructure status,” Maken said in his address at the international meet on “Governance of Mega City Regions” organised by the Confederation of Indian Industry (CII) in partnership with Centre for Policy Research (CPR) in Mumbai.

Welcoming the stand of the Union Housing Minister, Lalit Kumar Jain, National President of CREDAI says Ajay Maken who has understood issues of urbanisation has given out his view and from his statement it is clear that he understands the need of FSI relaxation. Now, it is state government’s turn to understand the condition of overcrowded Mumbai and the situation of thousands of homeless Mumbai dwellers.

“We hope that the Maharashtra government takes note of the minister’s suggestion to hike Floor Space Index (FSI) to encourage affordable, mass housing for slum dwellers as well in premium locations. Affordable housing is the need of the hour, and for this, FSI policy should be reviewed. In cities like Mumbai where population is growing day by day, vertical growth is the only option. If the FSI policy is revised then mega cities like Mumbai and Bangalore will have vertical residential development. This will lead to development of residential projects at a comparatively lesser cost, and buyers will get homes at good rates,” says Jain.

 …..to be continued

Track2Realty:

Shaken by the Mumbra building crash that claimed over 70 lives so far, MCHI CREDAI’s Raigad unit President Rajesh Prajapati said, “We have been writing to the various authorities for a long time drawing their attention to the menace of unauthorized construction going on literally unchecked.”

“What is even shocking is the fact that village panchayats are issuing permissions for construction that too by charging exorbitant rates though they are not authorized to do so,” Prajapati said and expressed his “shock and dismay” that the higher authorities and revenue officials are turning a blind eye to this dangerous aspect.

“This phenomenon is clearly seen in Raigad and Navi Mumbai areas and of it goes on unchecked, the society will witness a major havoc in near future,” he said.

“They are playing with the lives of people. Apart from the fact that the purchase of such unauthorized houses could turn out to be illegal, they could eve pose a danger to the people who will live there. They can collapse like the Mumbra building as there is absolutely no check on the quality of material being used,” he pointed out.

Following a series of letters, MCHI-CREDAI, Raigad received the copy of a forward letter from Ministry to the district collector asking him to look into the complaints.

MCHI CREDAI has earlier marked copies of its letter to the collector to the Chief Minister, The Urban Development Secretary, and to the Managing Director of CIDCO.

Track2Realty-Agencies: 

Maharashtra Chief Minister Prithviraj Chavan has ordered an enquiry to determine why local officials did not spot the illegal construction and stop it. The Deputy Municipal Commissioner has been suspended.

Among those who have died are 11 children. The victims were mostly poor daily wagers working at the construction site and their families.

An unimaginable price has been paid for gross negligence. Seven storeys came up in just six weeks, with sub-standard material. An eighth was under construction when the building caved in on itself. Homes, offices and shops had been set up within the building without an occupancy certificate.

A local resident named Mangal Patil had complained thrice since February about the building and even submitted photographs to the Thane Municipal Corporation, which is controlled by the Shiv Sena. He sent copies to the Chief Minister’s office, but says no one responded.

The Shiv Sena has passed the blame onto the Nationalist Congress Party (NCP), saying its local MLA should have complained about the illegal building. NCP leaders counter that Thane has many illegal buildings and ask how the Sena-controlled civic body allowed these to come up.

In 2010, the government admitted that there were as many as five lakh illegal buildings in Thane. Three years later, just 11,000 have been demolished, a sign of the nexus between politicians, bureaucrats and builders.

The two builders responsible for the most recent disaster have gone underground. The police have filed a case against them of culpable homicide not amounting to murder.

Track2Realty Exclusive: For quite some time the developers in Mumbai were making pitch for the review of FSI in the city which they termed as archaic. Their grouse has not been lacking the merit also. Facts speak for themselves. In 1964, FSI was introduced and set at 4.5 in Mumbai. While FSI is progressively relaxed in most global cities, in Mumbai the experience has been the reverse. FSI was reduced to 1.33 in 1991.  The city has one of the lowest FSI and floor space per person in the world.

Urban planning experts maintain that FSI below 5 spells disaster for any mega city like Mumbai. The developers have been asking to be increased as much it can be, or removal of FSI norms just like Andhra Pradesh as a much better option. About 50 per cent of population in Mumbai stays in slums. Also about 84 per cent of homeless people are self-employed and contribute towards the economic growth. Since they live close to their workplaces and are an integral part of the India’s urbanisation story, irrespective of the location categories we need to create affordable housing even in the premium locations of mega cities.

What has added fuel to the fire of relaxed FSI norms is that now even the Union minister Housing and Poverty Alleviation Ajay Maken has made a strong pitch for a review of floor space index (FSI) policy of mega cities including Mumbai for encouraging the affordable housing. Maken believes this can be one of the solutions to tackle increasing urban development challenges.

“There is a need to review FSI policy and make appropriate changes to boost the affordable housing in Mumbai. The State is the responsible authority to do so and in our opinion it should consider this option. The policy for providing ‘Infrastructure Status’ to the affordable housing scheme is on the cards to improve the urban housing scenario. This can be treated as a sub sector of real estate and at least, this sub sector can be given the infrastructure status,” Maken said in his address at the international meet on “Governance of Mega City Regions” organised by the Confederation of Indian Industry (CII) in partnership with Centre for Policy Research (CPR) in Mumbai.

Welcoming the stand of the Union Housing Minister, Lalit Kumar Jain, National President of CREDAI says Ajay Maken who has understood issues of urbanisation has given out his view and from his statement it is clear that he understands the need of FSI relaxation. Now, it is state government’s turn to understand the condition of overcrowded Mumbai and the situation of thousands of homeless Mumbai dwellers.

“We hope that the Maharashtra government takes note of the minister’s suggestion to hike Floor Space Index (FSI) to encourage affordable, mass housing for slum dwellers as well in premium locations. Affordable housing is the need of the hour, and for this, FSI policy should be reviewed. In cities like Mumbai where population is growing day by day, vertical growth is the only option. If the FSI policy is revised then mega cities like Mumbai and Bangalore will have vertical residential development. This will lead to development of residential projects at a comparatively lesser cost, and buyers will get homes at good rates,” says Jain.

Manoj John, VP, Corporate Planning & Strategy, RNA Corps also maintains there is a correlation between cost of FSI and the nature of development that is viable given the high cost of land with limited development potential. If more can be built on the same land, the cost of land attributable to the project, which is as high has 50 to 80 per cent of project cost would come down. Hence, it would be viable for the developer to build residential projects at lower cost and hence make it more affordable.

“In a city like Mumbai affordable housing is ticket size of 25 to 50 lacs, and EWS housing is 10 to 25 lacs. I believe that if the cost of FSI can come down to one-fourth of what it is today, then it is viable for developers to build houses within city limits that can be sold for about 4000 to 5000 psf. Today these rates exist in locations 30 to 40 kms away from the city,” says John.

However, Devang Varma, Director, Omkar Realtors & Developers has a caveat here. He says more often than not, the relaxations end up being exploited rather than put to good use like affordable housing. According to him, FSI relaxation is not likely since existing infrastructure is a major issue.  Enhancement of infrastructure also looks to be a bleak possibility owing to Mumbai being already highly congested with higher possibility of inconveniencing the system more.

“There is nothing like ideal FSI. FSI is essentially a co-related function of population and the required infrastructure. With the current population of Mumbai one can see the current scenario which can be aptly described as Chaotic and nothing less. Hence, in a way FSI norms may not fall in the category of archaic with amendments already having been made vis-à-vis prevailing situations. No further increase in FSI can be and should be fathomed since that would lead to further degradation of life in Mumbai,” says Varma.

There is also a school of thought that people should be encouraged to move out to MMR regions by increasing FSI in MMR regions and enhancing infrastructure over there or encouraging township schemes. A status quo is alarming as Mumbai which had an average FSI of 5 which over a period of time got reduced to 1.33 & 1. Lack of vision, concern of public good and scientific approach towards urban planning resulted in ignorance over the issue by the respective governments.

Now the government seems to be scared to take bold decisions as they may be blamed for being pro-builder policies. Since the majority of land available for development is with central, state and local governments, what government needs is to show a political will and take some steps in decongesting the city and creating more housing stock, within or outside the main city may depend on the policy framework .

Ajay Maken’s wishful statement has not been responded by the State Government so far. Urban planning experts also understand FSI relaxation is not as easy as making a statement at the conference. Real estate may also not be unanimous over the ways & means of FSI relaxation or the shape of things to emerge in overall infrastructure development in Mumbai, but Union Minister for Housing & Poverty Alleviation has definitely set the tone for a debate on an issue which the sector always keeps pushing through its channel of policy advocacy.

Track2Realty Exclusive: The Knight Frank Research finds overall fall in office absorption when compared to the corresponding quarter last. Approximately 1.35mn.sq.ft was transacted in Q3 FY 13, showing a 39% fall compared to the same quarter last year and 4% compared to the preceding quarter.

During the first three quarters of FY 13 around 4.7mn. Sq.ft. of office space absorption was observed in the NCR market. As per our estimates, total absorption for the present financial year is likely to be in the range of 5.7-6.3 mn.sq.ft.

Another consultancy firm Cushman & Wakefield earlier reported Delhi’s Connaught Place fourth costliest office location in the world. It ranked Delhi 4th in the list of most expensive office locations in the world. In 2011 ranking, Connaught Place was at fifth position.

“New Delhi’s Connaught Place has emerged as world’s 4th most expensive office location gaining one position over last year,” Cushman and Wakefield said in a statement.

Connaught place has an occupancy cost of $162 per sq ft annually, according to C&W’s annual survey that has ranked locations across 63 countries to compare the most expensive office destination across the world.

The debate as to whether Delhi-NCR is emerging as the new financial capital of the country or Mumbai still holds an edge depends over the given stake holders’ facts in hands, perception and stake in the given market.

However, what can be vouchsafed is the fact that from office occupier’s perspective Delhi-NCR in general and Gurgaon in particular holds an edge due to better connectivity, infrastructure & fresh supply. Whether that takes it to the financial capital or not, is something which is subjective at this point of time.

Ends…..