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Some Basics DEVELOPMENT CONTROL RULES (DCR): Development Control Rules are designed to ensure proper and efficient development of a city. FUNGIBLE FSI: The word ‘fungible’ suggests something that is freely exchangeable or replaceable, in whole or in part, for another of like nature or kind. According to the new DCR amendments, balconies, flower beds, terraces, voids and niches would be counted in the Floor Space Index (FSI). So, to compensate for the free of FSI areas, Fungible FSI to the tune of 35 per cent for residential development and 20 per cent for industrial and commercial developments has been allowed with premium. Fungible FSI would be available at 60 per cent premium for residential and 80 per cent for industrial and 100 per cent for commercial at Ready Reckoner Rates. CESSED BUILDING: A building that pays cess --a tax commonly referred to as the "repair fund"- is termed as a cessed building. Such buildings are typically old constructions. NON-CESSED BUILDING: Any building which does not pay cess is a non-cessed building, and whatever provisions are applicable to a cessed building, the same is not extended to a non-cessed one. ISLAND CITY: South Mumbai lies at the southern corner of the city. Although the Constituency of South Mumbai extends from Mumbai Central to Colaba, most city residents use the term to refer to the stretch extending from Colaba to Mahim,hence including localities such as Lower Parel, Worli, and Prabhadevi. This delimitation is also known as Mumbai City or ‘Island City’. The Development Control Regulations (DCR) for Greater Mumbai, 1991, apply as a regulatory compulsion on building activities and development work in areas under the jurisdiction of Municipal Corporation of Greater Bombay. The Regulation came into force on March 25, 1991 which replaced the DC Rules for Greater Bombay framed under Maharashtra Regional and Town Planning Act, 1966.The regulations states (in simple terms) that every person who wishes to carry out development or re-development of a building or alter any building or part of a building is to give a notice to the Commissioner, along with plans and statements. Construction is to be carried out in conformity to the regulations.Under the DCR, the Metropolitan Commissioner has been the final authority for interpretation of
its provisions and his decision would be final. The Metropolitan Commissioner could use his discretion to condone provisions of these Regulations except the provisions related to FSI.In January 2012, the Government of Maharashtra announced further amendments to the Development Control Rules (DCR) for Mumbai with the primary motive of bringing in transparency and reducing arbitrary and discretionary decision-making. The new rules would mean pricing based on maximum available FSI, eliminating the ambiguity that was largely prevalent earlier with respect to disproportionate saleable area. What changes have been made?Under the new DCR, areas for balcony, flower-beds, terraces, voids, niches would be counted in the FSI. These were not earlier considered in FSI calculations.To compensate for this loss in FSI, the government has allowed compensatory fungible FSI of up to 35% for residential developments and 20% for industrial and commercial developments. This can be used for bigger habitat area or flowerbeds, voids etc.Fungible FSI will be available at 60%, 80% and 100% of the ready reckoner rates for residential, industrial and commercial developments respectively.Under the new norms developers will have an option of 25% more parking over the DCR limit without premium and without being counted in FSI, which would bring some much needed relief to developers and end-users alike.These rules would bring in transparency and curb corruption as they limit discretionary powers of authorities and provide a level playing field for all developers. Brihanmumbai Municipal Corporation (BMC) expects to earn upto Rs.1,000 crores a year, which would be used in infrastructure developments in Mumbai. Will this bring down costs for home buyers?Theoretically, the following results should be achieved as a result of these changes:With the new rules, Mumbai will witness increase in net FSI at 1.79 in the island city and 2.7 in the suburbs, which should ideally bring down costs. The earlier practices where market prices reflected disproportionate saleable area had resulted in an increase in cost.The given FSI cap would bring cost rationalisation as developers would need to invest in quality design, maximising revenue by offering maximum value to end-users. However, in reality since no additional concessions are being given to commercial developments, the premium for additional FSI would increase developer costs and reduce profit margins by upto 10-30%, if the incremental costs are not passed on to the buyers. The government has also issued a directive for 20% of apartments in all big projects to be distributed at construction cost to economically weaker sections.In the immediate term developers may not resort to a price increase but be happy to cut down on the margins, as if they increase prices this would further aggravate the situation of already stagnated sales given interest rates are at peak levels. Do the new rules apply to all buildings?The new DCR rules do not apply to cessed, non-cessed old buildings, Mhada layouts, chawls and slums undergoing redevelopment. This would mean waiver of premium for buildings meant for rehabilitation. The compensatory floor space index (FSI) for the saleable component of these structures will, however, be governed by the new rules.
ABHISHECK LODHA, MD, Lodha GroupThe recent modification DCR is a welcome step taken by the Chief Minister and the Municipal Commissioner to bring much needed transparency to the approval process in Mumbai. It signifies a city which is willing to move ahead and make tough decisions and if this mindset is carried forward to other important areas, especially infrastructure, it will lead to a quick revitalization of our city. It will generate significant additional revenue for the government which can be utilized towards execution of infrastructural works in a well-planned manner. It will also benefit developers by creating a level playing field, reducing uncertainty and quickening the approval process. It is an important and positive start to making Mumbai a liveable city and we hope to see some quick action in other areas too to ensure that Mumbai can start moving ahead on the long-path to becoming a world-class place to live. VIKAS OBEROI, Chairman and Managing Director, Oberoi RealtyDCR is important as it allows the city to grow in a planned manner addressing the needs of people. Any industry is a level playing field and DCR will make it consistent. It will help the industry go stronger in the long run. As there will be a plan for the city according to the needs, the infrastructure will be created properly with good roads and garden improving the quality of life. The present government is making a good effort and it is commendable of the commissioner for amendments in DCR, which will set the pace and end up increasing housing stock in the planned manner. MOFATRAJ MUNOT Chairman, Kalpataru GroupThe modifications in the DCR will give a level playing field for all the developers and most of all will benefit the customers extremely. DHARMESH JAIN, CMD, Nirmal LifestyleDCR is a welcome move. The infrastructure will be upgraded, which will benefit the overall development of the city. There will be clarity and uniformity in lots of issues. The approval processes that take a lot of time should be looked into DCR. The DCR will benefit the real estate market as a whole. MOHAMMED LOKHANDWALA, MD, Lokhandwala InfrastructureUnder the existing DCR, the passage, lifts and staircases are charged with premium paid, which was given free of FSI within the power of Municipal Commissioner. Similarly, there are many other areas to be to be increased as it was given instead of fungible FSI. It is not going to benefit the builder fraternity as it has to pay premium as per ready reckoner and it will be additional cost and burden which ultimately transfers to the buyers of residential and commercial premises. As the cost of land in Mumbai City is very high and while buying any land the builder at the cost of construction/ builder are buying the land considering the free FSI can be availed and they will get more saleable/ usable area so that they were ready to buy land even at the highest price. The new DCR should not be applicable for the existing/ on-going projects as it will destroy the basic concept of the scheme and its commercial feasibility.
SUBODH KUMAR Municipal CommissionerBuilding permission rules in Mumbai gave huge discretionary powers to authorities, which were misused. The amended DCR will put an end to this. From now on, all developers will receive equal treatment. It will not only eliminate corruption, but will speed up building approval procedures. Land prices will also come down. Land deals are already being negotiated at lesser prices now. The benefit will ultimately reflect in lower real estate prices in the future.
Some Basics DEVELOPMENT CONTROL RULES (DCR): Development Control Rules are designed to ensure proper and efficient development of a city. FUNGIBLE FSI: The word ‘fungible’ suggests something that is freely exchangeable or replaceable, in whole or in part, for another of like nature or kind. According to the new DCR amendments, balconies, flower beds, terraces, voids and niches would be counted in the Floor Space Index (FSI). So, to compensate for the free of FSI areas, Fungible FSI to the tune of 35 per cent for residential development and 20 per cent for industrial and commercial developments has been allowed with premium. Fungible FSI would be available at 60 per cent premium for residential and 80 per cent for industrial and 100 per cent for commercial at Ready Reckoner Rates. CESSED BUILDING: A building that pays cess --a tax commonly referred to as the "repair fund"- is termed as a cessed building. Such buildings are typically old constructions. NON-CESSED BUILDING: Any building which does not pay cess is a non-cessed building, and whatever provisions are applicable to a cessed building, the same is not extended to a non-cessed one. ISLAND CITY: South Mumbai lies at the southern corner of the city. Although the Constituency of South Mumbai extends from Mumbai Central to Colaba, most city residents use the term to refer to the stretch extending from Colaba to Mahim,hence including localities such as Lower Parel, Worli, and Prabhadevi. This delimitation is also known as Mumbai City or ‘Island City’. The Development Control Regulations (DCR) for Greater Mumbai, 1991, apply as a regulatory compulsion on building activities and development work in areas under the jurisdiction of Municipal Corporation of Greater Bombay. The Regulation came into force on March 25, 1991 which replaced the DC Rules for Greater Bombay framed under Maharashtra Regional and Town Planning Act, 1966.The regulations states (in simple terms) that every person who wishes to carry out development or re-development of a building or alter any building or part of a building is to give a notice to the
Commissioner, along with plans and statements. Construction is to be carried out in conformity to the regulations.Under the DCR, the Metropolitan Commissioner has been the final authority for interpretation of its provisions and his decision would be final. The Metropolitan Commissioner could use his discretion to condone provisions of these Regulations except the provisions related to FSI.In January 2012, the Government of Maharashtra announced further amendments to the Development Control Rules (DCR) for Mumbai with the primary motive of bringing in transparency and reducing arbitrary and discretionary decision-making. The new rules would mean pricing based on maximum available FSI, eliminating the ambiguity that was largely prevalent earlier with respect to disproportionate saleable area. What changes have been made?Under the new DCR, areas for balcony, flower-beds, terraces, voids, niches would be counted in the FSI. These were not earlier considered in FSI calculations.To compensate for this loss in FSI, the government has allowed compensatory fungible FSI of up to 35% for residential developments and 20% for industrial and commercial developments. This can be used for bigger habitat area or flowerbeds, voids etc.Fungible FSI will be available at 60%, 80% and 100% of the ready reckoner rates for residential, industrial and commercial developments respectively.Under the new norms developers will have an option of 25% more parking over the DCR limit without premium and without being counted in FSI, which would bring some much needed relief to developers and end-users alike.These rules would bring in transparency and curb corruption as they limit discretionary powers of authorities and provide a level playing field for all developers. Brihanmumbai Municipal Corporation (BMC) expects to earn upto Rs.1,000 crores a year, which would be used in infrastructure developments in Mumbai. Will this bring down costs for home buyers?Theoretically, the following results should be achieved as a result of these changes:With the new rules, Mumbai will witness increase in net FSI at 1.79 in the island city and 2.7 in the suburbs, which should ideally bring down costs. The earlier practices where market prices reflected disproportionate saleable area had resulted in an increase in cost.The given FSI cap would bring cost rationalisation as developers would need to invest in quality design, maximising revenue by offering maximum value to end-users. However, in reality since no additional concessions are being given to commercial developments, the premium for additional FSI would increase developer costs and reduce profit margins by upto 10-30%, if the incremental costs are not passed on to the buyers. The government has also issued a directive for 20% of apartments in all big projects to be distributed at construction cost to economically weaker sections.In the immediate term developers may not resort to a price increase but be happy to cut down on the margins, as if they increase prices this would further aggravate the situation of already stagnated sales given interest rates are at peak levels. Do the new rules apply to all buildings?The new DCR rules do not apply to cessed, non-cessed old buildings, Mhada layouts, chawls and
slums undergoing redevelopment. This would mean waiver of premium for buildings meant for rehabilitation. The compensatory floor space index (FSI) for the saleable component of these structures will, however, be governed by the new rules. ABHISHECK LODHA, MD, Lodha GroupThe recent modification DCR is a welcome step taken by the Chief Minister and the Municipal Commissioner to bring much needed transparency to the approval process in Mumbai. It signifies a city which is willing to move ahead and make tough decisions and if this mindset is carried forward to other important areas, especially infrastructure, it will lead to a quick revitalization of our city. It will generate significant additional revenue for the government which can be utilized towards execution of infrastructural works in a well-planned manner. It will also benefit developers by creating a level playing field, reducing uncertainty and quickening the approval process. It is an important and positive start to making Mumbai a liveable city and we hope to see some quick action in other areas too to ensure that Mumbai can start moving ahead on the long-path to becoming a world-class place to live. VIKAS OBEROI, Chairman and Managing Director, Oberoi RealtyDCR is important as it allows the city to grow in a planned manner addressing the needs of people. Any industry is a level playing field and DCR will make it consistent. It will help the industry go stronger in the long run. As there will be a plan for the city according to the needs, the infrastructure will be created properly with good roads and garden improving the quality of life. The present government is making a good effort and it is commendable of the commissioner for amendments in DCR, which will set the pace and end up increasing housing stock in the planned manner. MOFATRAJ MUNOT Chairman, Kalpataru GroupThe modifications in the DCR will give a level playing field for all the developers and most of all will benefit the customers extremely. DHARMESH JAIN, CMD, Nirmal LifestyleDCR is a welcome move. The infrastructure will be upgraded, which will benefit the overall development of the city. There will be clarity and uniformity in lots of issues. The approval processes that take a lot of time should be looked into DCR. The DCR will benefit the real estate market as a whole. MOHAMMED LOKHANDWALA, MD, Lokhandwala InfrastructureUnder the existing DCR, the passage, lifts and staircases are charged with premium paid, which was given free of FSI within the power of Municipal Commissioner. Similarly, there are many other areas to be to be increased as it was given instead of fungible FSI. It is not going to benefit the builder fraternity as it has to pay premium as per ready reckoner and it will be additional cost and burden which ultimately transfers to the buyers of residential and commercial premises. As the cost of land in Mumbai City is very high and while buying any land the builder at the cost of construction/ builder are buying the land considering the free FSI can be availed and they will get more saleable/ usable area so that they were ready to buy land even at the highest price. The new DCR should not be applicable for the existing/ on-going projects as it will destroy the basic
concept of the scheme and its commercial feasibility. SUBODH KUMAR Municipal CommissionerBuilding permission rules in Mumbai gave huge discretionary powers to authorities, which were misused. The amended DCR will put an end to this. From now on, all developers will receive equal treatment. It will not only eliminate corruption, but will speed up building approval procedures. Land prices will also come down. Land deals are already being negotiated at lesser prices now. The benefit will ultimately reflect in lower real estate prices in the future.
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