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Recently, the Brihanmumbai Municipal Corporation (BMC), proposed to increase the floor space index (FSI) in Mumbai from 1.33 to 2.0. Such an increment, will directly impact the property prices in the area.
FSI, also known as floor area ratio (FAR), is the permissible limit for the built-up area of the building, compared to the plot size. For example, if you have a plot of land measuring one lakh sq ft and the FSI available for that plot is two, then, the constructed area can be two lakh sq ft.
In the past building activity happened without any control. Therefore, the municipal corporations in big cities felt the need to restrict constructions, which were very close to each other considering the need for air, sunlight and safety. Consequently, the FSI guideline was introduced, to restrict haphazard constructions.
FSI norm in Mumbai
“Presently, the FSI in Mumbai city limits (Colaba to Mahim) is 1.33 and in the suburbs (Bandra to Borivali and Kurla to Mulund), the FSI is one,” explains Shoeb Sayed, CEO of Motilal Oswal Property Advisors Ltd. “However, additional FSI of one can be availed of, via TDR (Transfer of Development Rights) on suburban projects. Moreover, there is different FSI, for redevelopment and SRA projects under different government schemes, which can go up to four,” he adds.
More FSI and its impact on Mumbai’s realty market
Increasing the FSI, will enable the builders to construct more area on the same plot of land and thereby, provide more options to buyers. “The hike in FSI in Mumbai, will lead to an increase in the housing stock,” feels Gaurav Shah, director of Ravi Group.
“It will make homes more affordable and improve the standard of living of home buyers. Another advantage would be the lower consumption of land space,” says Shah. Spatial expansion of the city will reduce and so will the commuting time for home owners, he adds.
“We firmly stand for the abolition of FSI restrictions. Restricted development, is not going to solve the perennial problem of housing shortage,” maintains Kruti Jain, spokesperson, Kumar Urban Development Pvt Ltd. The government should encourage development, with all basic amenities like roads, water, sewerage and parking, if it is serious about its declared mission of ‘Housing for All by 2022’, says Jain.
Burden on resources
Contrary to the demand of developers, activists point out that an increase in FSI could increase the load on existing public systems. Consequently, they insist that the government must address several key concerns while increasing the FSI:
- An increase in the FSI, could lead to greater congestion on existing roads and transportation networks.
- Schools, colleges, parks, hospitals and other social infrastructure are already overloaded. Increasing the FSI, could stretch existing infrastructure to a breaking point.
- Several areas in Mumbai already face acute water shortage. Activists feel that the government should first ensure proper water supply, before increasing the FSI.
Experts believe that an increase in FSI, would ease the property prices to some extent, in the short term. However, they agree that the move could also overload Mumbai’s existing infrastructure. Therefore, the government should simultaneously present a concrete plan to boost infrastructure development, they conclude.
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