Mumbai's realty sector, which is slowly recovering from the financial slowdown, is set to receive a major boost.
At least 100 million sq ft of additional floor space, valued at Rs 1 lakh crore (Rs 1 trillion), will be available immediately for the redevelopment of 19,000 old and dilapidated buildings, slums, fishermen colonies and other structures situated in the Coastal Regulation Zone.
This will be possible following a proposed relaxation in norms by the ministry of environment and forests in the revised draft CRZ notification released on Monday.
The state government is expected to grant a floor space index of up to 4 for the proposed reconstruction from the current 1.25-2. Redevelopment has been stalled due to stringent CRZ norms.
A Mumbai-based realty expert, who requested anonymity, said, "On a modest valuation of Rs 10,000 a sq ft, the estimated project value comes to Rs 1 lakh crore.
"Subsequently, the real valuation will definitely be more than this."
Maharashtra minister of state for housing Sachin Ahir told Business Standard, "We welcome the central government's move.
"We are happy that the ministry of environment and forests has accepted our argument that a fixed set of CRZ norms should not be applied to Mumbai, especially in view of limitations on development in the island city." He felt the proposed redevelopment would also create more open spaces.
The revised draft notification has clarified that the environment ministry is providing CRZ areas of Greater Mumbai special regulation keeping in view environmental issues relating to the degradation of mangroves, pollution of creeks and coastal waters because of the discharge of untreated effluents and disposal of solid waste, and the need to provide decent housing to the poor.
Besides, to provide safe and decent dwellings those in slums, the state government may implement redevelopment schemes directly or through agencies like Maharashtra Housing and Area Development Authority, Shivshahi Punarvasan Prakalp Ltd and Mumbai Metropolitan Region Development Authority.
This is necessary as the slums in coastal areas are at risk in the event of cyclones, storm surges or tsunamis.
In the case of old and dilapidated buildings, the ministry says there is urgent need for their redevelopment as these structures are extremely vulnerable and disaster prone.
Such reconstruction projects would be taken up by involving the owners of these buildings and private developers -- in accordance with prevailing regulations -- directly, through joint ventures or other models.
Milind Deora, MP from south Mumbai said, "The redevelopment will provide decent homes to a large number of people living in old and dilapidated buildings, and also in slums."
However, the environment ministry makes it amply clear that necessary environmental safeguards, including re-plantation of mangroves, need to be in place while carrying out redevelopment or reconstruction.
Sunil Mantri, president of Maharashtra Chamber of Housing Industry, said, "CRZ norms have been a major hurdle in the redevelopment of slums, fishermen colonies and dilapidated buildings.
"Over 100 million sq ft of FSI in phases will be thrown open with the changes in CRZ norms. This will ultimately help make Mumbai a world-class city."
