Will flat buyers have to bear FSI burden?
Industry experts said the new rule (BMC proposal to bring more areas under Floor Space Index calculations) could force developers to pass on the cost ultimately to the buyers since including additional components in FSI would lead to less construction.
The Maharashtra Chamber of Housing Industry (MCHI) has welcomed BMC proposal to bring more areas under Floor Space Index (FSI) calculations saying it would cut down on manipulations in projects. The new policy was proposed by municipal commissioner Subodh Kumar last week and is in the preliminary stages of being prepared by civic staffers, said officials. Officials said that if the proposal is passed, it would generate revenue for the BMC and cut down on the multiple concessions currently given to projects.
If the BMC proposal to bring more areas under Floor Space Index (FSI) calculations goes through, not only would the developer have to pay to build these areas, but he would get to construct less area for sale in the open market. Even structures built on designated open spaces would be included in FSI calculations, like water reservoirs, pump houses, parking spaces, plant nurseries, pools, ornamental projections and watchmen’s booth. Lifts and staircases would also be part of the FSI component and the premium the builders currently pay to build them would be done away with.
Under Section 64 (b) of the DCR, the BMC commissioner has the power to condone deficiencies. According to one estimate, the change could earn the BMC a handsome Rs 500 crore annually. The estimate is based on MCHI figures presented to the chief minister last month.
Mumbai is likely to witness 7 crore sq ft of construction work for about 70,000 tenements in the coming year. Industry experts said the new rule could force developers to pass on the cost ultimately to the buyers since including additional components in FSI would lead to less construction.
For instance a 10,000-sq-ft project spread across 10 floors, which has 1,000 sq ft of lifts, staircases and passages currently exempt from FSI calculations. When the 1,000 sq ft is calculated as floor space, the project could be restricted to nine floors. “In that case, he would be forced to make his money by increasing the cost of flats,” said an official. Many BMC officials disagreed, though. “As it is, the developer is selling flats at super-built-up rates, so where is the question of passing on the burden to the buyer?” asked an official.
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