Future of Redevelopment

Mr. Anand Gupta 
next President of BAI expressing his views on future of redevelopment.
Q. What according to you is the future of redevelopment ?
Ans. The future of redevelopment in Bombay city is very bright. We are aware that there are constraints on the availability of open land within the city limits coupled with fast growing demand for houses and shortage of housing stock. On the other hand that there are thousands of ageing buildings which are dilapidated and have reached a stage where it is not possible to carry out structural repairs and rehabilitation as the same are not economically viable. The redevelopment of old building has become a necessity since the problem of old and dilapidated buildings in the city of Mumbai grows more acute with each passing year and with each passing monsoon more and more building becomes dangerous and unfit for habitation. Many buildings collapse each year, killing or injuring people. Many of these buildings are so run down that they are unrepairable and the only solution is to put them down totally and to reconstruct them. Government has floated various schemes wherein they have allowed incentive FSI for carrying out redevelopment schemes. Prominent among them are redevelopment allowed under the DC Regulations of 33(6), (7), (9) & (10).
Q. What are the obstacles /hitches that you face from the government ?
Ans. The existing policies of government have failed to encourage redevelopment / reconstruction on the required large scale because of the high economic and social cost and low returns. The obstacles and expected support from the government are predominantly in the following areas:
Support from the government in terms of framing of proper laws for implementing redevelopment scheme effectively without falling prey to the non cooperative tenants/members of the society.
Incentive of FSI from the government shall be of the extent that the project becomes economically viable for the society/developer taking up such schemes.
Number of approvals are required from the government for one single scheme and it almost takes 1 ½ years for the redevelopment scheme to get cleared. There is a urgent need to fix up accountability on government side to clear the scheme in a time bound manner.
There is a lack of specific redevelopment policy for suburbs on the lines of DCR 33(7) inspite of the fact that most of the buildings constructed prior to 1960 are in dilapidated stage and in inhabitable conditions. Most of these buildings are not coming up for redevelopment due to lack of stringent laws for implementing such schemes and lack of sufficient incentives of FSI from the government to carry out such schemes.
All redevelopment scheme shall have time bound approval assurance from the government so that people who shift temporarily from their houses for facilitating reconstruction do not suffer later due to delayed approvals, adverse court orders, etc.
Right now there is double taxation, overlapping taxes, etc. creating lot of confusion and giving encouragement to the corruption in the system. All taxes such as sales tax, FBT, VAT, service tax, cess, etc. shall be brought under single umbrella as far as the developers are concerned. It will help them to reduce their cost and pass on the benefits to the customers.
Government shall decide for once and for all that for reconstructed building rateable value of the property and resultant leviable property tax shall be same as that for the old structure standing on the same plot. This will give impetus to the old members to go in for the redevelopment.
Q. What according to you is the ideal redevelopment scheme ?
Ans. According to me redevelopment scheme which involves adequate and due compensation to the landlord and the tenants/members and to the developer duly is an ideal scheme. It is found that scheme of 33(7) applicable in the city for ‘A’ Category Cess buildings are ideal one except that the year of the reconstruction of 1940 shall be now revised to 1960 in view of the passage of time after these D.C. Regulations came into being.
Q. What will your course of action once you have become the president of Builders Association of India ?
Ans. Presently I am the Chairman of BAI- Mumbai Centre. As a leader of 800 builders and contractors in the city where we are facing various problem as regards to the government policies, it will be my duty to get the correction in the policies from the competent authority in the best interest of redevelopment scheme.
It would be my endeavour to the actively agitate on behalf of BAI and to help bring about changes in government policy for the redevelopment scheme in the city of Mumbai, this being only alternative for the survival and revival of the city before it becomes totally dead. I shall strive hard to put up following suggestions to government and bring about changes required:
Necessary amendment in law to make redevelopment scheme compulsory once the society passes resolution with 51% majority.
To obtain assurance from the government under relevant laws that once the redevelopment scheme is initiated the building may be declared as “protected” under redevelopment scheme and shall not be adversely affected by any adverse court orders or amendment in law of the government when the members have already vacated their building after obtaining necessary permissions from the government.
Necessary amendment in D.C. regulations for extending the incentive in FSI for redevelopment to the suburbs on the line of City, DCR 33(7).
Necessary audited control checks such as ISO Certification to be made mandatory for the builders.

Posted on 19th April 2006