Redevelopment in Mumbai: Major problems and issues

Rising costs and crunch for space in Mumbai makes it very difficult for tenants to move out of old dilapidated buildings and step into a new home. Consequently, redevelopment of the old housing societies comes to a standstill in majority of the cases.

Redevelopment of co-operative housing societies in Mumbai has been a subject of great interest for the developers in recent years. It is assumed as a big business for builders and real estate developers, since they are offered a major part of the share. According to market reports, old tenants are offered a 323 sq ft after redevelopment of a property, fixed as per the government norms.

To throw light in this regard, redevelopment can simply be put as the process of demolishing an old building and redeveloping it with the help of a builder. Such redevelopment includes offering new flats with additional benefits to the old tenants and including extra flats and shops, after getting sanction from MCGM.

A developer is responsible for the rehabilitation of the residents if its a private building of MHADA, if it is owned by Brihanmumbai Municipal Corporation, or if it is a cessed building

Problems of redevelopment

In regard to the number of problems for redevelopment, the civic administration has recently made its addition by charging 100% premium to builders who wish to have criterions for open spaces encompassing the buildings.
Certain projects of the builders will now become difficult to thrive with the introduction of new norms. The sudden mandate of additional premium have put the developers who have signed a redevelopment deal with cooperative housing societies in an unhappy state. Issuing of such instructions to the architects to pay the premium in full is expected to give rise to serious repercussions in the redevelopment market.

With the issuing of the new premium by the government, a feeling of discontent have aroused among the developers. According to property consultants, such additional premium charged by the civic administration is treated as an exorbitant demand, which is completely unaffordable by the developers.

To add to the discontent of the builders, except the housing reconstruction projects, redevelopment of dilapidated properties, slums and MHADA colonies are exempted from paying additional premium. For reconstruction of slum projects, no premium is charged for open space deficiency, however, 10% is charged for sale component buildings.

FSI
In the past, the civic administration has raked not less than 1500 crore as premium from the builders who desired to use 35% of the additional FSI(Floor Space Index) for residential projects. However, according to buildings architects, the new demand for additional premium is much more compared to Fungible FSI.

Common redevelopment issues

Redevelopment of buildings in Mumbai witness a number of issues, lack of cooperation from the tenants being one of the many. If market news is to be believed,an 80-year old building in Takumalni wadi chawl, located near Malad-Marve Road, is unable to undergo reconstruction since one of its tenants refuse to allow redevelopment.

Forcible eviction from private buildings cannot be executed by a municipal authority since it is not legally possible. According to the Mumbai Municipal Corporation Act of 1888, BMC cannot enforce forcible eviction of a any tenant from private buildings. In this regard, the BMC has invoked the National Disaster Management Act of tenants from dangerous and dilapidated private buildings

Statistics state that around 1 Lakh residents dwell in around 900 old dilapidated buildings in Mumbai. More than 90 people have been crushed under such dangerous buildings in the last three months.

Structural Audit
According to Bylaws No. 77 of the co-operative housing societies, every building after 15 to 30 years, will undergo a structural audit once in 5 years. For buildings more than 30 years old, the structural audit will be done once in 3 years.

Market report

Market survey reports states that around 16000 MHADA buildings are in decrepit condition since 1999. Poor incentive offered by the developers is one of the key reasons for lack of reconstruction in the city.

Perfect Redeveloper

Certain factors are required to be considered while selecting a developer for a housing project. According to key property consultants, few aspects often overlooked while choosing a builder, includes:

Corpus amount
Shifting charges
Carpet area offered to every tenant
FSI
Penalties
Alternative accommodation

Seeing the intricacies included in the Mumbai real estate market, redevelopment of buildings can be considered very difficult. Thus it can be concluded that there is no one-stop solution for re-developers Mumbai. Addition of premium by the civic body has made the matter worse for redevelopers. Without a government aid, it is very difficult for builders to sustain in the market under the influence of such increasing number of complexities.