What has transfer of development right (TDR) prices got to do with the skyrocketing real estate rates? A lot. In the past six months, cost of TDR has jumped from Rs2,000 to Rs4,000 per sq ft.
Now, in a bid to bring down the prices of flats in the city, the Maharashtra Chamber of Housing Industry (MCHI) has written to chief minister Prithiviraj Chavan urging him to reduce the TDR prices and implement the additional 0.33 floor space index (FSI) scheme on a priority basis in the suburban district.
A group of few developers who holds the maximum TDR in the city is responsible for its rising prices. And they reap the benefit by taking advantage of building projects elsewhere with the TDR credits. Developers get these credits by not using up reserved land for construction projects.
“To break this cartel, the government should urgently implement the additional 0.33 FSI scheme. Once it is in effect, the TDR market will automatically crash. We are ready to pay premium to the state in lieu of the additional FSI. We cannot use the present TDR rate at certain places due to its high cost. If we do, then cost of flats will go up as will that of construction, labour and land. We need reforms in the real estate sector to bring down property prices and make it affordable for the common man,” said Sunil Mantri, president, MCHI.
Due to non implementation of the FSI scheme, the government and the civic body is losing Rs10 crore per day. “In fact, senior government counsel KK Snghavi suggested using of the scheme in the suburban district charging premium from developers. The government do not need to invite objections and suggestions to amend the Development Control Regulations,” said Mantri.
Senior civic officials said that the government should have control over the TDR prices. “The authority should purchase the TDR and sell it at an affordable rate so that no one is able to manipulate it. Such a step will help control the real estate prices. The government will also earn some revenue out of it,” he said.