Real-estate experts say the state government's plan to have a uniform Transfer of Development Rights (TDR) policy for the whole of Maharashtra, including Mumbai, will destroy the property market of the metropolis.
Mumbai city should have a separate TDR policy, they say.
Senior state government officials have said that chief minister Devendra Fadnavis has already decided to go in for a uniform TDR policy.
What exactly is TDR?
Supposing you own some property in Borivli. If the government decides to declare it as reserved land (either to be used as a garden or as a heritage property), you will lose ownership of that land. In order to compensate you, the government will issue you a TDR certificate. This certificate gives you the right to sell an equal area of land you've lost. Meaning, when you sell this certificate to a builder, he will give you money for the land you've lost. But how does the builder benefit, right? The certificate will enable the builder to build additional floors in his project, equivalent to the area the certificate prescribes. At present, TDRs cannot be sold in South Mumbai.
How does uniform TDR affect Mumbai?
According to Pankaj Kapoor, managing director at realty firm Liases Foras, land value in Mumbai is very different from, say, Pune or Nashik. If the state goes for a uniform policy, a person having a TDR for 1 acre of land in Nashik will be able to sell it in Mumbai and realise a much higher price. This will hit the Mumbai real-estate market hard.
What's the way out?
Urban planner Pankaj Joshi says the state should have 'inducts', if it's adopting a uniform TDR policy. "Inducts will ensure that TDRs generated in low-value areas should be used only in same-value areas. If it's allowed to be used in high-value areas, then the value of that TDR should be reduced. If people generate TDRs in rural and low-value areas and use them in high-cost urban localities, it will create havoc," he says.
What's the colonial angle here?
Sunil Mantri, president of NAREDCO, the umbrella body of developers, said when the Mumbai municipal corporation was formed in 1888 by the British, it had a coastal area and multiple authorities. "Land crunch is a big issue because it is an island city. So, land value is higher than anything. Therefore, Britishers made a separate law for Mumbai."
What's the builders' body saying?
According to Mantri, besides the state government, the BMC has its own policies on land reservation and development. If the state adopts a uniform TDR policy, city development will be stuck and it will have a cascading effect on development and growth.
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