Mumbai Builders to Mandatorily Use Dharavi TDR, Pushing Up Flat Prices
Real Estate

Mumbai Builders to Mandatorily Use Dharavi TDR, Pushing Up Flat Prices

Under a new mandate from the state urban development department, builders in Mumbai must now use Transferable Development Rights (TDR) generated from the Dharavi Redevelopment Project for 40% of their TDR requirements. This decision has sparked concerns among industry experts and opposition leaders.

The notification, issued on November 7, stipulates that the TDR quantum will be equivalent to the floor space index (FSI). The maximum price for TDR sales cannot exceed 90% of the land value of the receiving plot in the year of TDR loading.

Real estate experts have expressed apprehension about the potential impact of this policy on the affordability of housing in Mumbai. They point out that the Dharavi TDR, priced at 90% of the land cost, will be significantly more expensive than the average TDR, which currently ranges between 30% and 60% of the Ready Reckoner rate.

Sunit Gupta, a property valuation expert, warns that this policy could lead to a substantial rise in flat prices in Mumbai. He explains that if a plot in Malabar Hill costs Rs 1 lakh per square meter, the corresponding Dharavi TDR would be priced at Rs 90,000 per square meter, automatically driving up the price of flats.

Congress MLA from Dharavi, Varsha Gaikwad, has criticized the move, terming it "Modani TDR" and accusing the Eknath Shinde-led government of attempting to hand over control of Mumbai's real estate market to the Adani group. She alleges that mandating the use of Dharavi TDR for 40% of TDR requirements is a deliberate strategy to establish Adani's monopoly in the TDR market.

In contrast, Pankaj Kapoor, founder and managing director of Liases Foras, a real estate research agency, believes that the policy's impact on housing prices will be minimal. He argues that the post-RERA housing market is driven by demand and supply, and flat prices in Mumbai have already been kept in check due to the high inventory and new launches. He asserts that builders are now more financially disciplined and will avoid using TDR if it makes their projects financially unviable.

The notification also mandates that the quantum of total TDR generated from Dharavi and available for utilization must be displayed on the BMC and DRP websites with real-time updates for public information.

Under a new mandate from the state urban development department, builders in Mumbai must now use Transferable Development Rights (TDR) generated from the Dharavi Redevelopment Project for 40% of their TDR requirements. This decision has sparked concerns among industry experts and opposition leaders. The notification, issued on November 7, stipulates that the TDR quantum will be equivalent to the floor space index (FSI). The maximum price for TDR sales cannot exceed 90% of the land value of the receiving plot in the year of TDR loading. Real estate experts have expressed apprehension about the potential impact of this policy on the affordability of housing in Mumbai. They point out that the Dharavi TDR, priced at 90% of the land cost, will be significantly more expensive than the average TDR, which currently ranges between 30% and 60% of the Ready Reckoner rate. Sunit Gupta, a property valuation expert, warns that this policy could lead to a substantial rise in flat prices in Mumbai. He explains that if a plot in Malabar Hill costs Rs 1 lakh per square meter, the corresponding Dharavi TDR would be priced at Rs 90,000 per square meter, automatically driving up the price of flats. Congress MLA from Dharavi, Varsha Gaikwad, has criticized the move, terming it Modani TDR and accusing the Eknath Shinde-led government of attempting to hand over control of Mumbai's real estate market to the Adani group. She alleges that mandating the use of Dharavi TDR for 40% of TDR requirements is a deliberate strategy to establish Adani's monopoly in the TDR market. In contrast, Pankaj Kapoor, founder and managing director of Liases Foras, a real estate research agency, believes that the policy's impact on housing prices will be minimal. He argues that the post-RERA housing market is driven by demand and supply, and flat prices in Mumbai have already been kept in check due to the high inventory and new launches. He asserts that builders are now more financially disciplined and will avoid using TDR if it makes their projects financially unviable. The notification also mandates that the quantum of total TDR generated from Dharavi and available for utilization must be displayed on the BMC and DRP websites with real-time updates for public information.

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