India mulls China-like buildings in Mumbai
MUMBAI: Mumbai is seeking to amend its 24-year- old building rules that allowed slums to mushroom and kept housing beyond the reach of most of its 19 million residents.
The island- city, which has little land available for development, is proposing changes to its Floor Space Index regulations that may permit developers to tear down old structures and build taller towers. This may be good news for companies including Oberoi Realty, Sunteck Realty, Peninsula Land and Godrej Properties, according to Edelweiss Financial Services.
The plan for the world’s second-most densely populated megacity after Dhaka is part of Prime Minister Narendra Modi’s “Housing for All” program, which seeks to build 20 million homes across India by 2022 to help eliminate urban slums and squalour. In theory, the move should increase the supply of apartments, cut property prices and help India’s financial capital emulate wealthy peers including New York and Shanghai.
“This is the only way to solve the perennial housing shortage in this city, where most are living in pigeonhole- size apartments,” said Vyomesh Shah, managing director of Hubtown, a Mumbaibased developer.
The Municipal Corporation of Greater Mumbai has proposed to increase the Floor Space Index, or FSI, to range between two and eight, compared with an earlier cap of 1.33. The FSI determines the maximum floor area allowed in a building relative to the land on which it is erected.
When the index was first introduced in Mumbai in 1964, it was set at 4.5, meaning a building on a one acre ( 0.4 hectare) plot of land, a little smaller than a football field, living space totaling 196,000 square feet could be built.
Policy makers lowered that number in 1991 to to 1.33 times, a move contrary to what most cities with limited land have tended to do — raise the permitted FSI to accommodate growth, as in Manhattan, Singapore, Hong Kong and some Chinese cities.
The proposed change will allow for variable building heights depending on location, consumption logistics.
Historically, FSI has been used as a tool to limit congestion in Mumbai, said Aashiesh Agarwaal, an analyst at Edelweiss Securities. Under
patterns
and the new plan, it is designed primarily to be a tool to manage physical development by laying out uniform rules, where locations with good public transport connectivity will get a higher FSI, he said.
“They seek to address key lacunae impacting Mumbai’s real estate sector,” Agarwaal said. “They are a step in the right direction and positive for developers with strong governance, brand and execution capabilities.”
The 13-member S& P BSE India Realty Index has risen 17 per cent this year compared with the benchmark S& P BSE Sensex index’s seven per cent gain. Oberoi Reality Ltd., the country’s second-largest developer by value, has climbed 17 per cent this year while Godrej Properties has added 16 per cent.
Not all are optimistic about the proposals. Allowing taller towers on smaller land parcels may lead to a break down of the already creaky infrastructure in the island city, said Gulam Zia, Mumbai-based executive director at Knight Frank LLP said in a telephone interview.
“The city has grown haphazardly like wild grass and now if you let it expand vertically without putting necessary infrastructure in place, it won’t serve anybody,” he said.
The Mumbai metropolitan region needs US$ 60 billion ( RM216 billion) of investment in public transportation over the next 20 years and the current plan falls short of needs, according to estimates by McKinsey & Co. In a 2010 study, the consultant said India must spend US$ 2.2 trillion by 2030 on urban transportation, housing and office space to boost infrastructure ranked below that of Guatemala and Namibia by the World Economic Forum.
More than a decade after then prime minister Manmohan Singh vowed to make Mumbai another Shanghai, the improvements in the city haven’t been significant.
Half of Mumbai’s residents live in slums — more than the population of Switzerland. The city’s clusters of ramshackle huts made from scrap materials line narrow garbage- strewn alleyways, usually lack proper sanitation facilities and water supply, and residents often use pilfered electricity from tapping into power cables. —WPBloomberg’
This is the only way to solve the perennial housing shortage in this city, where most are living in pigeonhole-size apartments.
Vyomesh Shah, managing director of Hubtown, a Mumbai-based developer