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Important Things You Should Know About Slum Redevelopment Projects

Saturday, November 03, 2018

By Amit Ruparel, MD, Ruparel Realty

Mumbai has always been a space starved city. Being the commercial capital of India and with the rapid growth of industrialization, it is only witnessing more threat in terms of space. Also, another aspect of space crunch in the city is due to humungous number of slum dwellers. The problem has been greatly addressed and rectification initiation has been taken by the government to transform the horizontal slums to vertical development. Slum Redevelopment will not only release the land space but will also enable more construction and more accommodation which will only lead to better standard of living. By providing an innovative cross-subsidy to private developers, the administration has created a working model for Public-Private-Partnership in Slum Rehabilitation.

The Benefits of SRA Nodal Agency: With the introduction of nodal agency called the Slum Rehabilitation Authority (SRA), the formulation has proven to be a huge boon not only for the homeowners, but also for the builders and contractors. It has put in place a Slum Rehabilitation Programme that identifies existing slum localities in the city, facilitating their rehabilitation in line with the commandments. The programme allows real estate developers to rehabilitate the dwellers to nearby location. The properties developed under the SRA are mostly at the prime locations and enjoys various benefits such as connectivity, infrastructure. Additionally, the homeowners as well as the real estate developers also get the benefit of Transferable Development Rights (TDR).

The Advantage of Transferable Development Rights: The recent Development Plan 2034 has made it compulsory for real estate builders to use transferable development rights to buy at least 20 per cent of it from slum rehabilitation (SRA) projects. TDR has also been made a core component of floor space index (FSI), which has been raised up to 3 in south Mumbai and includes a substantial share (0.84) of TDR. Additionally, TDR in different locales has been pegged to Ready Reckoner rates.

Government’s Contribution Towards Slum Redevelopment: Maharashtra government has decided to increase the offered carpet area to 322 sqft from the earlier 269 sqft for slum redevelopment plan. 60 per cent of Mumbai’s population lives in slums and giving them additional space will encourage them to come forward to opt for the scheme. Most slum pockets in the city are located along the shoreline. This entire stretch will be redeveloped by builders as prime sea-facing property – it is a win-win situation for both the developer and slum dwellers as, as per rules, slums are redeveloped by builders under SRA guidelines and comprise a saleable portion, for fresh buyers, apart from homes meant for rehabilitating slum dwellers. Slum rehabilitation schemes such as DCR 33(10) & 33(5) are transforming the livelihood in all slum pockets and create more open spaces by freeing reserved areas on encroached land in Mumbai.  The government is also considering funding as much as 40% of the project cost for the project which will not have high profits attached. Terming it as ‘viability gap funding’ (VGF).

Ensuring Better Standard of Living: Besides giving rise to a number of low-income housing options, SRA also helps in the improvement of roads, drainage, and other civic amenities in the nearby areas. For the residents of the slums, on the other hand, the buildings become a permanent asset, along with the improvement in the hygiene levels and their quality of life. The Government also gets increased tax revenues, while the utilisation of vertical space creates a possibility for the excess open land being used for commercial development and infrastructural growth. Thus, the SRA model not only helps provide a holistic solution to the lack of residential space and infrastructure, it ultimately also benefits the society and economy by uplifting the backward sections of it and creating opportunities for a better life.

In Conclusion: According to the Slum Rehabilitation Authority (SRA), more than 62 lakh people — or one-half of the city’s population — resides in 12.5 lakh slum tenements, collectively spread over just 8 per cent of Mumbai’s geographical area. All Real Estate Industry needs right now is a systematic approach to coordinate between the government agencies, developers and the slum dwellers. The concept of ‘Slum Free State’ will not be just a dream in the future if we consider the challenges and the possibilities. Hence, the scope of SRA development especially in a city like Mumbai is bright.

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