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Old Wine - 9th June, 2007. Times Property (Times of India)

Redevelopment of old buildings has its flip side and it is important to ensure that this is done in an organised and systematic way

AThe metropolitan city of Mumbai has gone through a huge real estate boom with an everincreasing demand for all sorts of properties. We are aware that there is a shortage of adequate supply and constraints on the availability of open land within the city's limits.


On the other hand, there are thousands of ageing buildings that are dilapidated and the problem grows more acute with each passing year. Though they are in dire need of extensive repairs, societies do not have the resources and necessary funds required to carry them out.


Keeping in mind the objective of redevelopment of existing colonies with new structures, the Government has floated various schemes for carrying out redevelopment schemes. In 1999 modifications were introduced to the Development Control Regulations, which allow redeveloped properties to rise above the 45-metre limit. This modification was needed as additional FSI, which was provided to builders as an incentive for redevelopment, could only be accommodated by going higher.


In case of redevelopment of old buildings, builders approach societies that either have some open plot of land or are willing to demolish the old structures to reconstruct new buildings. Where such a development is possible, builders normally agree to pay a premium to the society members for its permission to construct a building on the open plot of land or to construct a new, bigger building using the Transferable Development Right (TDR), Floor Space Index (FSI) after demolishing the existing structure, and by providing alternate residential flats to members till the new building is constructed.


The kinds of redevelopments that are happening are on private ownership co-operative societies, tenanted properties, MHADA built properties, Mill land etc. Residents of multiple buildings can also get together for redevelopment. With a much larger area available for redevelopment, it provides for better facilities including wider roads, gardens, playgrounds etc. This approach can clearly lead to an improvement in living conditions for residents of these old colonies, as well as a decent profit from sale of additional space.


On the flip side, with old buildings being demolished and towers constructed in their place, additional pressure is on the infrastructure. In
suburban locations from Bandra to Andheri, residents of old buildings are being paid off to move their homes hence creating room for more development through use of TDR. If you try to understand the depth of issues redevelopment brings about on infrastructure, it is enormous! Additional demand for power; almost double or more in each redevelopment project is inevitable - water, drainage and worst of all congestion and traffic issues.


One thing I fail to understand is change of user. A residential building is brought down to rubble to make place for a swanky shopping mall without paying heed to the effect it will have on traffic. Each new mall means more requirement for power, water, drainage and all that goes behind the scenes. In an existing mess that we have in our town planning, we are creating more bottlenecks that we will have to live with or overcome after having created them. And many are doing so even if they have to come back to crowded roads and water cuts two years down the line.


With opportunities to grab redevelopment projects the effect on the valuation of properties has gone haywire in the suburbs. What is worth Rs 8000 per sq.ft in case of a redevelopment situation sells at Rs 16,000 to 20,000. Of course, the price offered depends on the final type of use of property.


What we need is a very strict urban planning department that actually works for the city, follows discipline on zoning and disallows any muscle or money power to change what is good for the city and its people. If you look at any developed city it has always followed proper town planning in the process of growing with minimum burden on infrastructure.


See, for example, how Shanghai has maintained a perfect balance. I have had the pleasure of meeting the town planners during a conference organised by Urban Land Institute in Shanghai last month and they take into account the minutest detail. They have gone through a similar phase of bringing down old buildings and structures in the last ten years but in the most organised and systematic way possible to secure their future and be a global city.