Industrial plots in Mumbai Metropolitan Region opened for development

A year ahead of Assembly polls, the Maharashtra government opened up large tracts of industrial-use land in the Mumbai Metropolitan Region (MMR) for residential and commercial development. The move allows unused industrial plots in MMR to be used for building houses, malls and offices with approval of the civic commissioner and a payment of a premium — 20% of the ready reckoner rate of the plot — to the government.

The state’s urban development department (UDD) issued a final notification to its ‘Industrial to Residential’ policy for civic bodies of Thane, Kalyan-Dombivli, Mira-Bhayander, Ulhasnagar and Bhiwandi-Nizampur. These civic bodies share common development control rules (DCR) — norms for construction and urban planning in an area. A separate notification was issued for the Navi Mumbai civic body.

The notification said that out of the total Floor Space Index (FSI) utilised for the development, a minimum of 25% is to be reserved for commercial development. Floor Space Index (FSI) typically indicates how high a developer can build on a plot. It is the ratio of total built-up area to the size of the plot.

The notification, however, made it clear that in cases where the land had been originally acquired under the Land Acquisition Act, permission of the state government will be required.

The decision is being seen as a windfall for developers since it will open up several unused industrial plots across the seven cities for development, and also increase housing stock in MMR.

However, this may not translate into affordable homes for citizens. The notification states that “provision of inclusive housing shall not be applicable while allowing such conversion”. So while the state has made it mandatory that 20 per cent of the basic FSI utilised should be for building residential tenements with built-up area of 30 sq metres and 50 sq metres (322 sq feet to 538 sq feet), the developer can sell these in the open market. That effectively means developers can join small flats and sell them.

A senior UDD official admitted that while a condition has been put in to ensure smaller tenements, it may not lead to affordable homes.

Urban planning experts said the government’s premise for creating public housing itself was flawed. “There is a complete lack of transparency while formulating such policies. Does the government know how much of industrial land will be opened up for residential development through this move. Is the housing being planned in tandem with transportation systems?” said Pankaj Joshi, director, Urban Design and Research Institute (UDRI), adding that affordable homes can be built only by public agencies. “The state could have made it mandatory to reserve a portion of this development for low-cost homes. These houses could have been handed over to Mhada, which could have auctioned them,” said Joshi.

Builders, too, are sceptical about the move bringing them gains. “It is a welcome move, but I don’t see this necessarily as a windfall for developers. It will also not lead to price correction as developers will have to pay a premium for conversion and there will be other levies,” said Nayan Shah, president of CREDAI-MCHI, apex body of developers