Benefits of redevelopment and why it is vital, towards meeting the housing demand of a city like Mumbai.
Redevelopment, which refers to the process of reconstruction of residential/ commercial premises, by demolishing an existing structure and constructing a new structure in its place, has emerged as a useful option for developers / tenants.
Redevelopment is done by utilising the F.S.I. potential of the land and by utilizing additional Transfer of Development Rights (T.D.R.), as specified under the Development Control Regulations of the Municipal Corporation of Greater Mumbai (MCGM).
For redevelopment, builder enters into development agreement with society or Landlords and entering into such development agreement does not vest any title of the land in the favour of developer, but merely authorizes the builder to develop the land.
The redevelopment of the old building is indeed a huge and arduous task but it is not at all complicated if the society members/tenants co-operate and follow the correct procedure.
Redevelopment is a continuous process of urban renewal. Cities like Mumbai have grown enormously and as a result, there is a dearth of land in the city.
The only other alternative, for accommodating the increasing demand for housing at all levels, is through vertical growth. However, this will require vastly improved transport facilities and civic infrastructure.
Redevelopment opens new avenues for development and also gives an opportunity to build apartments that cater to modern lifestyles and better standards of living.
The repair work only increases life of the building by 3 to 4 years but the problems can re-occur and members have to spend money again for repair works.
Societies, at times may not have the resources and expertise to handle the repairs on their own and the families of the members may have expanded, thereby requiring more space. In such circumstances, redevelopment gives a new building for which no major repairs required for longer period and propels the life of the building.
Redevelopment is recommended for building which older than 20-25 years.
Old buildings also have other drawbacks such as lack of security and maintenance services, absence of common facilities like gymnasium and society office, unavailability of proper open area for children in the compound, leakage problems, absence of elevators, poor interior planning of rooms and low resale value due to the poor condition of the buildings.
Builders/ developers, who opt to purchase land and develop the same, incur huge stamp duty cost, vis-vis transfer of the land. However, when it comes to redevelopment of old buildings, the stamp duty is reduced by a significant extent and this acts as a major benefit for developers.
Tenants too get several benefits like hassle-free execution, extra carpet area, corpus fund, upmarket amenities and hi-tech gadgets such as cctv's, intercom / video door phone systems, smoke detectors, fire fighting alarm systems, borewell with rain water harvesting system, high end elevators, society office if permissible, earthquake resistant and well planned apartments and alternate accommodation or rent compensation, for the period during which the building is under construction.
Most importantly, there is a substantial increase in the flat's value and low maintenance costs post redevelopment. If any of the family / members require additional area in the same redeveloped building, it can be achieved by purchasing it from the developer and hence would enable the family to live in together.
Redeveloped building can withstand with the new climatic and geographic conditions and is constructed with latest safety measures.
There is huge potential for redevelopment, in Mumbai, due to the constraints on land availability, coupled with the mismatch between demand and supply of housing stock. On the other hand, there are thousands of ageing buildings where it may not be viable to carry out structural repairs. The only solution is to pull them down and reconstruct them. The problem of dilapidated buildings in the city of Mumbai is becoming more acute, with each passing year. Consequently, for a majority of the cities in India, redevelopment of old buildings becomes crucial.
With the mid-income segment today becoming a huge purchasing market, developers are moving towards redeveloping older structures into modern luxurious buildings with facilities like sufficient parking, open areas. In the ultimate analysis, complete and timely delivery seems to be the most crucial factor, when it comes to redevelopment.
