Maha govt cluster redevelopment policy: Boon for realtors?

The Maharashtra government has finally put an end to the confusion over cluster redevelopment projects. The state's cabinet has cleared the cluster redevelopment policy, and opened up over 1,000 land parcels in South Mumbai for re-development, reports Manasvi Ghelani.

Call it a gambit ahead of the state elections -- but Maharashtra chief minister Prithviraj Chavan has given real estate developers in Mumbai some reason to cheer for.

His cabinet has passed new rules, which now allow developers to pursue the redevelopment of any dilapidated building, cessed buildings, or, for that matter, any state or MHADA-owned buildings that have been standing for more than 40 years.

But it's not just the 1,000-1,500 land parcels this policy unlocks that has developers cheering. The state has kept the floor space index unchanged at 4 -- meaning developers have a lot more land to cash in on.

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Says Rohit Poddar, managing director, Poddar Developers, "You can argue that it wasn't viable economically in the previous FSI. And that it's more economically viable [now] so you see more project initiatives being taken up."

In a bid to boost re-development, the policy has also reduced the level of consent required from flat owners in a building to 70 percent, from the earlier 100 percent.

But developers say that the rule mandating an 18-metre wide road access area in redeveloped projects could be a bit of a problem.

"As far as the 18-metre accessibility area is concerned, that would certainly be a challenge in my opinion. And I'm not sure how this is going to be addressed from a practical perspective," Poddar says.

The rule mandating a minimum re-developement area of 1 acre, or 4,000 square metres, however, has not ruffled feathers. People who own property in plots up for re-development have not been left in the lurch either.

The policy says that developers will have to rehabilitate them with flats that these tenants will own outright. These should have a carpet area not less than 27.88 square metres.

And if the project exceeds 10 hectares, a tenant's new flat should be an additional 30 percent in carpet area.

All said and done, the developers won't have an easy time. The policy says that no clusters shall be identified for redevelopment without an impact assessment study covering the load on infrastructure and necessary amenities.

Also, the bombay high court is yet to decide on identification criteria.

Says Ajay Nair, chief project officer, Omkar Realtors, "I believe the High Court ruling will come up on October 6. Once that order clears this cluster redevelopment, each individual cluster that approaches for redevelopment opportunity will actually submit an impact assessment study, which will be reviewed by the BMC. And upon that clearance, and the recommendations added by these people, we would then see the schemes being fruitfully progressed upon."

Experts say the real benefits of this policy will be visible only six months down the line, and while the positives may come in the form of an uptick in demand and lower prices for customers, the quantum is still up in the air.