Transfer of development rights way out of city's space crunch, says ex-BMC chief Subodh Kumar

The new policy for cluster development announced by the Maharashtra government at the recently-concluded Nagpur session of the legislature will succeed only if the transfer of development right (TDR) policy is modified to take into account the relative value of the land (ready reckoner rate) in the year of utilization at the point of origin and place of utilization of TDR and the use of TDR is permitted in the island city of Mumbai as suggested by former Mumbai municipal commissioner Subodh Kumar.

He had sent a detailed  and well-thought out 19-page note to the urban development ministry of the state government over a year ago in which he had given a credible justification for the use of TDR in the island city. TDR is generated, for example, when land reserved for public use like playground, etc is acquired by the Brihanmumbai Municipal Corporation (BMC). Instead of paying cash compensation to the land owner, the BMC issues a TDR certificate which mentions the zonal floor space index (FSI) potential of the land acquired. This certificate, which is transferable, can be sold in the open market by the land owner. The only condition is that the TDR should be utilised to the north of the property against which it was issued. The TDR concept was applicable only to the suburbs of Mumbai. Even TDR generated in the city could be used only in the suburbs.

However, there was a major flaw in this policy. Since Bandra, Khar etc are regarded as to the north of Trombay, TDR generated very cheap in the latter area could be used in high-end suburbs like Bandra. Over the past few years, thousands of square metres of TDR generated in downmarket areas like Trombay have been used in posh localities in the western suburbs. This has resulted in heavy construction activity in the western suburbs bringing in its trail a series of problems like traffic congestion.

With a view to rectifying this imbalance, chief minister Prithviraj Chavan has decided to reform theTDR policy to rationalise the use of land.  In this context, Kumar’s note, which has recommended the use of TDR in the island city,  is being actively considered by the government, Chavan said.

Kumar has noted that in the past 20 years, only 360 hectares  of land reserved for civic amenities like playgrounds etc has been acquired by the BMC. Due to the ban on the use of TDR in the island city, only a measly seven per cent of the development plan (DP) of 1967 was implemented.

To change this frustrating scenario, Kumar has called for changes not only in the decade-old  TDR policy, but also  in the development control (DC) rules. This move will help to create a large number of housing units which will have a sobering effect on the already over-heated real estate market.

Kumar said the revised TDR policy would help transform Mumbai into an international financial centre. “Besides, the quality of life in Mumbai city will also improve. People will be able to live at prime locations close to their work. They do not need to commute far way from suburban districts,” Kumar has observed.

Kumar observed that the ban on the use of TDR in the island city was imposed because of the fear that excessive use of TDR in the island city would result in high density of population and place excessive load on the  existing civic infrastructure.

Kumar said, “No one hands over the reserved plot to BMC in lieu of TDR except in case of a few low value locations.  It is because the TDR can be used only in the suburbs in the north of generation point and not in the island city.  Even in suburbs, TDR gets used in high-value corridors only as the market value is same, whether TDR is generated at low or high-value locations. Generation of TDR is in low-value locations and its consumption is in high-value locations in north of the point of generation. Correspondingly TDR is utilized in the highest possible value locations and not in low-value locations.

“No one hands over reserved plots to be BMC in lieu of TDR in high-value locations in the suburbs or in the Island city. As a result, citizens are deprived of civic amenities due to lack of availability of reserved plots,” Kumar pointed out adding that the present TDR policy has created imbalanced development in the suburbs.

Kumar has suggested that after incorporating place value for TDR, the government should give 1.3 times the plot potential as TDR for reserved plots so as to make attractive/viable to hand over reserved plots to the BMC voluntarily. Once the TDR policy is revised, the large quantum of reserved prime plots will be unlocked in the city. These plots can be used for various civic amenities such as gardens and play grounds. People will be able to get higher value for their plots against the sale of TDR since the compensation will be based on the actual market value.

“As a result of it, the DP will get implemented speedily without any financial cost to the BMC. The acquisition will happen smoothly,” stated Kumar in his letter .

He further said that in case of large-sized reserved plot –  2000 sqmtrs and above –  50 per cent area of the plot should be handed over to the BMC by the owners/developer of the plot free of cost.

“And, on 50% the owner should be allowed to develop it. He should be permitted to utilise the full potential of the plot. On the BMC-acquired plot, the owner can get TDR. If the size of the plot is less than 2000 sqm, then 60% plot can be retained by the owner and 40% should be hand over to BMC at free of cost,” he said.

He said, “In highly improved infrastructure areas like the ones serviced by metro rail and mono rail, the government has decided to allow the use of higher FSI. Similarly additional FSI may be permitted against the use of TDR in the island city. It could be 50% way of TDR and 50% by charging premium. That revenue generated by way TDR can be used to fund the infrastructure projects in the city,” said Kumar.

He has also suggested amendment of DC rules to bring uniformity in the use of FSI. He pointed out anomalies saying, there is no cap on the use of FSI under DC rule 33 (7) cessed buildings’ redevelopment schemes where the FSI could go up to 4 and in some cases, it has gone up to even 11 also.

“The illogical use of FSI has created the haphazard development in Mumbai city,” he said. For non-cessed building development, the FSI is restricted up to 1.33 only there is no such restriction for cessed buildings. So, there is no proper virtual space utilisation. Besides, under DC rule  33 (9) which deals with cluster development, the developer can avail of an  FSI of only 4. 

“Actually, the 33(9) cluster development should be more attractive in comparison with the 33(7) cessed building redevelopment. We should amend the rules to make cluster project viable and attractive,” Kumar has observed.

(This is first in a two-part series)