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Redevelopment of housing societies in Mumbai may fetch one free room per flat

Soon, private housing societies that are over 30 years old and wish to undertake redevelopment can claim an additional 15% built-up area per flat at no extra charge. “This will translate into one extra room per flat,” said state urban development secretary Nitin Kareer, unveiling the features of the new development plan. The incentive will apply to nearly 40,000 private housing societies in Mumbai, activists say. But critics are not impressed as they feel the move does not go far enough and may still not attract builders interested in redeveloping private societies. Developers hope to exploit maximum FSI (going up to 3.37) permitted in redevelopment to earn a profit from the free sale component of a project. Initial investments include buying additional FSI for the project. Then FSI of 1.3-1.5 is generally utilised to rehouse existing occupants and remaining 1.8-2 FSI is kept for the sale component. Bigger plots yield a chunkier free sale component, translating into higher profit margins.

Source : ET Realty