The Maharashtra government has announced a 50% concession in floor space index (FSI) premium for cluster redevelopment schemes under regulation 33(9) of development control and promotional regulations (DCPR) in Mumbai for one year, following demands from developers’ associations. This move is expected to aid the redevelopment of old buildings in the city.
During the COVID pandemic, the then chief minister (CM) Uddhav Thackeray had appointed a committee to aid the badly affected real estate sector. At the time, the committee had recommended several concessions, and the state government accepted them for most redevelopment schemes for one year.
Subsequently, when the scheme lapsed, builders’ organisations such as the Confederation of Real Estate Developers’ Associations of India and Maharashtra Chamber of Housing Industry (CREDAI-MCHI), National Real Estate Development Council (NAREDCO) and Practising Engineers, Architects and Town Planners Association (PEATA), began demanding concessions, especially for cluster redevelopment, to be reinstated.
The cluster development policy is applicable when more than one plot or building is taken up for redevelopment together by forming a cluster. Under this scheme, the state government provides various exemptions, including additional FSI to developers. The recently announced concession will now offer a 50% waiver on the premium charges levied by the authorities for approvals for initiating, progressing and completing the area or additional area in a project. Such premium charges include the fungible premium paid for FSI, open space deficiency premium, premium for excess ground covered under construction, lobbies, lifts, staircases, etc.
Maharahstra deputy CM Devendra Fadnavis said the decision to reduce premiums should boost cluster redevelopment in the city and also ensure that Mumbaikars get an affordable home within Mumbai, with the additional area. “We have introduced this one-year-long scheme to push cluster redevelopment in the city, and this is also one way of generating stock of more affordable housing in the city,” he said while speaking to reporters after the Cabinet meeting.
CREDAI-MCHI appreciated the government’s decision and pointed out that cluster development has the potential to address challenges of urban growth, inadequate infrastructure and ageing buildings by providing better enhancements in terms of wider roads, improved water supply, drainage systems and electrical works.
“The overall infra enhancement benefits not only the redeveloped buildings but also the surrounding areas. It also allows modern amenities like elevators, dedicated parking spaces, landscaped gardens and recreational facilities to replace the older outdated structures, improving the housing stock. Cluster development also optimised land use with taller buildings replacing smaller structures,” it says in a statement.