To bring down the unaffordable real estate prices and accommodate the city’s population in the housing sector, the state government should allow a Floor Space Index of 9, Vimal Shah, president of Maharashtra Chamber of Housing Industry (MCHI) said at a panel discussion Saturday.
The discussion was on ‘Transformation of Mumbai’. Shah said public opinion about real estate prices being high despite there being a situation of over-supply is incorrect.
“There is no inventory pile-up. Even today, if you go ask a developer to give 100 ready flats, he will say it will take another 18-20 months to deliver them. There is no over-supply in the stock of ready-to-possess houses. Affordability will come into the system only when we allow supply to increase for which the FSI has to go up,” said Shah, also the managing director of Hubtown.
Over the past few months, real estate experts have maintained that the amount of unsold stock is more than 130 million sq feet. According to them, considering the current rate of absorption, it will take around 40 months to clear the inventory.
Shah said the MCHI had conducted an internal study to arrive at the FSI need of the city. “Out of Mumbai’s total area of 438 sq km, 238 sq km is covered by reservation for national parks, railway land, roads, grounds and so on. Another 100 sq km is already developed. So one does not expect all the buildings to be pulled down there. In the rest of the area to be developed, to support today’s population with a meagre 500-sq-feet flat for every family, you need an FSI of 9,” Shah said.
He added that the argument that a higher FSI will pressure the city’s infrastructure due to a higher density is flawed. “The entire population is anyway using the city’s infrastructure. It is just that due to lack of affordability, half of the population stays in slums. An increased FSI will allow them to be included in the formal housing sector,” Shah said.
U P S Madan, metropolitan commissioner at the Mumbai Metropolitan Region Development Authority (MMRDA), however, said the development authority had conducted a similar exercise a few years ago, considering the entire area of Mumbai, and had arrived at a different figure.
“The study had found that an FSI of 2.5 to 3 is sufficient to cater to housing needs. However, one needs to examine if it should be