‘Given today’s market conditions, it is highly unlikely that any builder will opt for it’
The city’s builders have dubbed the draft rules for premium floor area ratio (FAR) recently notified by the Urban Development Department as ‘unviable’.
The UDD draft rules prescribe premium FAR charges at “50% of the guidance value of the additional (notional) sital area and building area to be constructed using premium FAR” with guidance value of the developed site as the base value.
Premium FAR, the maximum limit of which is not specified in the draft rules, will apply in “impact zones of transport infrastructure projects and any other public infrastructure projects within the local planning areas and in other areas of the approved master plans”.
FAR is the ratio of the built -up area of the building to the area of the land parcel on which it is built. The Draft Revised Master Plan – 2031 had provided FAR in the range of 1.75 to 3.25 in the city.
However, the draft was scrapped among other reasons to accommodate Transit Oriented Development (TOD) policy put out by Bangalore Metro Rail Corporation, which provides for dense, mixed land use development along transit corridors – along Namma Metro, Sub-urban rail lines and bus hubs.
The TOD policy prescribed premium FAR up to 5, along the transit corridors and the new draft of the RMP is expected to allow this. This is expected to have a huge impact on zoning regulations in the city.
The fee prescribed for the premium FAR has received a tepid response from the industry. Suresh Hari, Chairman, Confederation of Real Estate Developers’ Associations of India (CREDAI) – Bengaluru, said the prescribed premium FAR charges made it an unviable proposition for the industry.
“The government should not look at this as a money-making exercise, which is what it seems. At 50% of guidance value, given today’s market conditions, it is highly unlikely that any builder will opt for it. Additional development will only lead to more revenue to the government in other forms including property tax and development charges, not just premium FAR charges,” he argued.
CREDAI-Bengaluru has also taken objection to guidance value being the sole criteria for the premium FAR charges. “Guidance value has never been reduced and in many places do not reflect the changing market realities. A fair market price should be the basis,” Mr. Suresh Hari said, adding that CREDAI will submit its objections to the draft rules.
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