Full page cover jacket advertisements praising Prime Minister Modi, Housing Minister and Maharashtra Chief Minister for sanctioning of the Mumbai Development Control and Promotion Regulations (DCPR) 2034 by industry bodies like NAREDCO indicated a collective sigh of relief in the developer community
More than the provisions, it was the end of a long wait. The delay in implementation of regulations had slowed down many realty projects in the city. Developers complained there was lack of clarity in the absence of a proper transition policy.
Some of the key highlights of the DPCR 2034 include; opening up 3,700 hectares of land that was earlier designated as No Development Zone (NDZ) for residential real estate, linking of permissible Floor Space Index (FSI) to road width in order to check congestion in the city, Another significant ambiguity which has been done away with in DCPR 2034, is the definition of carpet area which has now been aligned to Maha RERA’s definition of carpet area. The DCPR also aims to create 8 million jobs by increasing the supply of office spaces.
The industry experts believe the provisions in the new DCPR 2034 will reduce the project cost with reduction in the premium FSI and fungible area premium.
“The government has reduced premium FSI and fungible area cost by 10% for residential development. While earlier land owner was supposed to pay 60% of the land ASR (annual schedule of rates) to government agencies, now they would need to pay 50% of the land ASR value. The revised decision of the government would bring down total project cost by at least 5% to 6%”, says Pankaj Kapoor, Managing Director, and Liases Foras.
According to international property consultants Knight Frank, the current version of the Development Plan 2034 is significantly different from the one that was passed in February 2018 by the Brihanmumbai Municipal Corporations (BMC).
“With the release of DCPR 2034, the last level of uncertainty has ended. The developer community can now progress with confidence. The policy provides clarity and focus for future development of Mumbai. The DCPR 2034 has provided a fillip to the commercial sector in Mumbai by way of incentivized FSI, however, the high cost of the FSI could be a challenge. On the residential front, measures such as opening up of land for promoting affordable housing and unification of carpet area definition will prove to be a boon for home-buyers’, says Shishir Baijal, Chairman & Managing Director, Knight Frank India.
“The previous situation, where more stringent provisions of the two DPs were to apply, meant new constructions had practically ground to a halt. With sanctioning of the new Development Plan, work at all the on-going projects will resume. The new development plan aims at multifaceted future development in tandem with the robust infrastructure network along the length and breadth of the city. The future development will provide impetus to the additional housing demand in the city encompassing the need of the all the housing segments across the board. It augurs well for home seekers as also for the industry”, says Niranjan Hiranandani –National President- Naredco and Co-Founder & MD- Hiranandani Group.
The new DCPR also offers several incentives for the landowners which according to the experts will pave way for the city’s development.
“Incentives granted to land owners will make them come forward to contribute their land for public purpose like new roads, reservations or road widening etc. The reduction in some of the premiums, will make commercial development more viable now, which in turn will increase employment in MMR. Thus, new DP paves way for Acche Din to Realty Sector & Mumbaikars”, says Vilas Nagalkar, Architect & member of Practising Engineers, Architects and Town Planners Associations (PEATA).