Cluster development policy to boost redevelopment in Mumbai
More than 19,000 old and dilapidated buildings in the island city of Mumbai may soon get a facelift. Maharashtra’s Chief Minister Devendra Fadnavis has given his nod to the cluster development policy for the island city. The move is aimed at boosting urban renewal, with new buildings coming up in place of old and dilapidated ones and the introduction of more open spaces and public amenities in such areas.
What is cluster development policy?
Under the cluster development policy, redevelopment will be allowed only for the buildings and structures on a minimum area of 4,000 sq mtr or about one acre. The policy also envisages redevelopment or reconstruction of MHADA or government buildings that are 40-year-old and have been declared as dilapidated or non-livable buildings.
While a cluster development project can be started with the approval of 70 per cent residents and tenants, the developer should purchase 70 per cent properties for it. Under the policy, the developer will get a floor space index (FSI) of 4. In case of government or semi-government buildings, the decision would be taken by a committee headed by the chief secretary. However, the dilapidated and non-livable buildings will not require any permission. Slums and non-dilapidated buildings too can be part of cluster redevelopment projects.
Tenants will be entitled to at least a 300 sq ft flat. To make the scheme more attractive, the government is offering larger flats if the cluster size is large. According to the incentive, tenants in such clusters would get the benefit of 30 per cent additional space, which means they would each get a 390 sq ft flat.
Developers have said that it is a step in right direction. “It is heartening to know that the government has agreed to the policy after reviewing it. It is a positive step in right direction by the new government in Maharashtra. It will help not only to improve the city’s infrastructure but will also help to improve the living conditions of the city’s middle class,” said Vimal Shah, President, Maharashtra Chamber of Housing Industry (MCHI).
Redevelopment to gain momentum in MMR
Redevelopment activity in Mumbai is set to gain momentum, with 698 revamp proposals set to get the green light in the next two months.
To speed up revamp projects for old buildings and slums which have been delayed for long, the state government has given a deadline to the Brihanmumbai Municipal Corporation (BMC), Maharashtra Housing and Development Authority (MHADA), the collectorate and other agencies, to issue their respective annexure II certificates by March 2, for redevelopment.
Annexure II is the certified list indicating those who are eligible for or entitled to redevelopment benefits. The approvals are not processed until this certification is issued by the competent authorities. In the past two years, many of the projects have been held up, as various agencies have been dragging their feet in the matter.
Redevelopment: Need of the hour
According to ASK Property Investment Advisors, the Mumbai Metropolitan Region needs between 1,20,000 to 1,25,000 more residential units in the coming year. This shortage can be partly met if the estimated 19,000 dilapidated buildings in Southern and Central Mumbai and 5,000 buildings in the suburbs are rebuilt with additional flats.
While redevelopment was mostly restricted to smaller players, many prominent developers have joined the fray. Orbit Corporation, RNA Corp, Kalpataru Group, Rustomjee Group, SD Corp, and The Wadhwa Group are some of the leading names in the redevelopment business. Redevelopment is a win-win situation for developers as it enables access to land in prime markets without huge upfront investment. The developers’ main expense when they start a project is compensation to homeowners for relocating during the construction period. The sale of additional flats at market prices helps the builders earn a profit on their investment.
