Green spots to be reclassified as industrial zones

CHENNAI: In a move that will bring down the city's green cover to a mere 3%, the Chennai Metropolitan Development Authority (CMDA) has decided to reclassify several green zones as industrial zones in the suburbs. Noombal village in Ambattur and several areas in Thiruverkadu that are under threat from rampant real estate development are being reclassified. The concept of protected green belts with construction and development norms was introduced to maintain the greenery and reduce pollution.

A senior CMDA official said they have decided to reclassify Noombal village, near Poonamallee bypass road, from green to industrial category. "Noombal and several green zones in Tirverkadu have lost their green cover. Major developmental and construction work has taken place in these areas. The government as well as private parties have been responsible for the spate of development activities. Noombal was not included in the list of green zones in the CMDA master plan released in 2008," he said.

As per CMDA records, the area has already been turned an industrial or commercial area. "Of course, reclassification will make the area free from regulations," said a CMDA official. "But development has been taking place in all these green zones since the late 1990s," he said. The process of reclassification will require several rounds of consultation with people and experts. The decision is likely to receive objections from environmental groups. Reclassification will make the area free of regulations. Green zones, mostly agricultural lands, are major sources of ground water and balance ambient temperature levels in the summer.

M G Devasahayam, a member with the CMDA monitoring committee, said CMDA has made a disastrous decision. "This is another example of introducing a system to help the real estate mafia. The plan will make Chennai unlivable as temperatures will rise and groundwater will deplete if the remaining green cover is destroyed," he said. "Inviting industries into an already over-crowded region will only make things worse," said a consultant with the state government.

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Comprehensive infra plan needed in Chennai suburbs

Chennai

The suburbs will have to wait a while before they catch up with the city when it comes to having reasonably priced civic amenities, say urban planners.

”Now, residential projects are coming up in the Outer Ring Road project areas,” says K P Subramanian, former professor at Anna University’s urban engineering department. Projects have been announced before the land acquisition was complete, he adds. “Most of these areas, including Oragadam and Sriperumbudur, don’t have water supply, sewerage system or health and recreation facilities. Here, housing projects come before development of social infrastructure as all you need is a road connection to your plot for permission to build mini-townships,” says M G Devasahayam, a trustee of SUSTAIN, an NGO in urban development.

The problem is compounded by the fact that development control rules meant for the city are being applied in suburbs. According to a CMDA official, a highrise is allowed if the approach road is of a certain width, the logic being that wider roads in the city will have stormwater drains, underground sewerage and electricity lines.

Planning permissions inside the Chennai Metropolitan Area (CMA) are based on whether the builder gets ‘No Objection’ certificates from Metrowater, electricity boards, traffic and fire services. However, a promoter building a 27-storeyed complex beyond Uthandi, outside CMA limits, will approach the directorate of town and country planning and local authorities who don’t thoroughly scrutinise the applications, says the official.

According to former CMDA chief planner Anantharanjan Das, it will take time before the law and market catch up with the fast-paced development in and around Chennai. “In the 1930s and 40s, the electric railway line was the only way to reach places like Tambaram. Sensing the development potential, people moved to suburbs along the railway line and areas like Nanganallur were carved out,” says Das. In the early days, the suburbs didn’t have tarred roads or amenities. The next wave of migration was to ECR that primarily attracted people with enough means to own cars to ferry them back to the city from their farm houses.

The development of the IT Corridor again saw middle class families moving to the suburbs. “The accumulated development of last 30 years happened in the space of 10 years,” says Das, who along with his team prepared an infrastructure plan for the IT Corridor up to Siruseri in 2000. Now, projects are going beyond Melmaruvathur along NH45, Maraimalai Nagar and Chengalpet in Kancheepuram. It is a market economy where developers can’t be held responsible for providing social infrastructure. “The market will catch up with the pace. Koot Road that connects southern suburb Madipakkam with Medavakkam resembles a mini-T Nagar with its shops. The situation will improve the government acts,” he says. It is also up to the government, which collects `100 per sqft as infrastructure charge from builders, to prepare a development plan and implement it, he says.

Source: The Times of India, Chennai

Building regularization in Chennai hits a roadblock

Chennai

Putting several thousands of building violators in further trouble, the Madras high court-appointed monitoring committee of the Chennai Metropolitan Development Authority (CMDA) on 16th November sought more clarity and judicial sanction from the state government before regularizing buildings that came up before July 1, 2007.

The decision comes in the wake of a new set of guidelines announced by the government early this month, under Section 113-C of the Tamil Nadu Town and Country Planning Act, 1971, exempting unauthorized buildings from regulations. The authorities are yet to figure out how many buildings would, as applications continue to pour in for regularization. “It could run into several thousands,” a CMDA official said.

“Agencies like Chennai Corporation, CMDA, the directorate of town and country planning and municipalities have begun preparations to condone unauthorized buildings for a fee. Now, they will have to stop all those moves till the HC gives them sanction,” a CMDA official said.

CMDA monitoring committee member M G Devasahayam said the court had allowed regularization as a one-time affair. “After allowing buildings with violations that came up before 1999 as a one-time affair, it struck down attempts to regularize violations of buildings constructed before 2001 and 2002.” The fresh guidelines suggested covering buildings developed on or before July 1, 2007.

Source: The Times of India, Chennai

Utilisation of IT buildings for non-IT purposes in Chennai

Chennai

Chennai’s commercial property developers’ long pending request to permit IT buildings for non-IT sectors like finance, education, hospital, hospitality and retail may soon become a reality if the recommendations of the CMDA are accepted by the state government. However, it may come with a sting attached in that developers may have to pay premium FSI charges for the additional FSI availed for IT buildings. But a final decision is still awaited from the government.

According to officials, a proposal has been sent to the government taking into account the plight of commercial property developers due to current market scenario and the prolonged delay in leasing IT buildings. The proposal has been examined very seriously now and the government will take a final decision on the modalities in a month, say officials.

Earlier Credai Chennai had represented to the government that most of the buildings were promoted in the year 2006-07 even before the introduction of infrastructure and amenities charges. As they have already suffered additional levy which was not factored in while budgeting their projects, they felt that any further penalties/levies for conversion would only be counter-productive. This will only curtail developers from coming forward for conversion thus continuing the impasse in the city.

The CREDAI Chennai has also requested the state government to make it equitable to the developers/owners who have not availed the additional FSI, those developers/owners keen to convert the IT buildings for non-IT purposes, alternative uses may be considered given the financial impact such vacancy levels may create for both the developer as well as the exchequer. As the STPI scheme has been discontinued, fiscal sops available for IT/ITES companies could only be seen in SEZ premises thus discouraging corporates/MNCs to occupy standalone IT buildings in the coming years.

As most of the developers have taken loans from banks for the development of IT buildings, any delay in resolving the issue would only be at the cost of increased NPAs for the lending banks. If there is flexibility in leasing, then it would benefit all sections of the society including the state government by way taxes and levies, say developers.

A list of vacant buildings in the city has been forwarded to highlight the gravity of the situation and the cascading impact on the overall economy. Among the specific requests made by Credai Chennai include enhancing the area of utilisation for non-IT purposes from the existing 10% to 25% of built up area for any purpose unconditionally and permission to include sectors like banking, financial services, engineering services, hotels, hospitals, educational institutions, finishing schools and retail space.

The Maharashtra government has permitted IT buildings for non-IT purposes. In Hyderabad, limited option is available for IT buildings to let it for sectors like banking, retail and food court but here again it depends on the project size. These are treated as basic services while permitting 30 per cent of the building for non-IT purposes.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/utilisation-of-it-buildings-for-non-it-purposes-in-chennai/

CMDA recommends changes in parking in non-IT buildings

Chennai

Chennai residents are increasingly facing the problem of parking and even roads are not spared for use as parking slots in many areas. On a representation from the CREDAI to modify development regulations, the CMDA has recommended to the government for allowing car parking in the upper floors on non-IT buildings.

So far, parking in the upper floors above stilt floors was permitted in the case of IT buildings and hence the need to amend the development regulations. At the same time, the authorities prefer to prevent unauthorised conversion of parking space for other purposes either by way of collecting security deposit or any other means.

There are advantages while permitting parking space in the upper floors. The cost of construction may be reduced when compared to the construction of basement floors apart from limitations in digging. In some areas, the water table may be very high that will act as a barrier for construction of basement floors.

The CMDA’s monitoring committee of the regulatory authority while approving the suggestion felt that a charge shall be made by the developer/owner for the undivided share of the land/premises transferred by way of sale deed or lease deed executed.

The covered car parking may be allowed up to ground plus three floors above ground level in cases of residential and commercial developments and the same shall not be included in the computation of FSI and coverage. A parking security deposit at Rs 500 per sqm will be collected and refunded after three years of occupation of the building.

A certification for the designs to withstand the earthquakes, for the upper parking floors from the Class I structural engineer may also be insisted since Chennai happens to be in seismic zone III.

Industry sources say that this will go a long way in easing the vehicle parking congestion in residential complexes as well make way for the vehicular movement on roads in residential localities. The plan will have to be now approved by the government before amendment to DC rules.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/cmda-recommends-changes-in-parking-in-non-it-buildings

Resale guidance campaign draws good response

Chennai

Over 450 anxious buyers have thronged the HDFC’s resale guidance campaign held in the city during weekends to seek expert advice and guidance while investing in resale units. Among the criteria for selection of resale units, pricing was found to be the dominant factor. Then affordability came when they will have no other choice but to seek home loans.

The demand for resale units is not only confined to units located in city areas but also extended to suburbs and peripheral areas. However, the predominant demand is said to be for city units.

Homebuyers invariably had several queries to seek clarification ranging from the procedure for scrutiny of documents to identifying appropriate planning authority and ensuring that they get value for money while investing in resale units. HDFC’s initiative was more of a supportive exercise for resale unit buyers on various aspects from avoiding pitfalls to scrutinising basic documents prior to investment. A number of homebuyers have already submitted documents to seek home loans for resale units.

The overall response was quite encouraging as enquiries continued to pour in even after the show days, according to the company’s official sources. Lack of information on identification of appropriate authority to seek clarity on various issues governing investment in resale property are cited as major factors for the sluggish growth of the secondary market in the city, say industry experts.

From the stability point of view, verification on durability of the structure, electrical and plumbing works need to be checked with a professional, feels Oscar G. Concessao, a leading architect in the city. A thrust on maintenance services, no dues certificate from the association, demarcation of parking areas, etc are other areas that need scrutiny, he adds.

According to legal experts, even though there are no special safeguards required while investing in resale units, one vital factor that needs verification is the quality of construction. All other safeguards like validity of purchase from the previous owner/builder will have to be scrutinised even if the previous owner had bought it recently. “Any defective title vested with the previous owner or builder will continue to be passed on to the new buyer”, says S Vijayaraghavan, a senior corporate lawyer and a columnist. Change of ownership will not absolve the defect in the title as it is a very important factor especially while investing in resale units, he adds.

Yet another vital factor is that the buyers should ensure that any additional rights on sanctions by CMDA or other appropriate authority in the property is also passed on with a specific provision included in this regard. This assumes significance especially in view of the increased FSI eligibility announced by the planning authority in the city.

There are others who voice that apart from a technical evaluation, an approved valuer’s assistance should be sought to ascertain the intrinsic value of the resale property. This is because the tax authorities might contest the registered value should a need arises at a later date, feels R S Nambi, a consultant in the panel of World Bank and ADB.

In a gifted property, it might be for the family’s benefit in which case, the document scrutiny assumes significance. A minor’s property can be bought from the guardian but with the court order and the sale proceeds should to go the minor. It is advisable to obtain an undertaking from the guardian to the effect that the sale proceeds will go to the minor’s account, said Mr Nambi.

V Nagarajan, Property Consultant

Source: http://content.magicbricks.com/resale-guidance-campaign-draws-good-response

Building safety a concern for Chennai residents after earthquake

Chennai

The strong tremors in Chennai following the earthquake in Indonesia have once again raised fears over the safety of buildings in Chennai. Are we safe in our houses? This is the question on every Chennaiite’s mind after two temblors shook the city on Wednesday following a massive earthquake in Indonesia. Reports of some buildings in the city developing cracks due to the tremors have only added to the paranoia.

While most developers are divided over how many buildings in Chennai are actually equipped to withstand a quake, they do agree that stringent guidelines issued by the authorities has ensured that most structures constructed after 2002 are complaint and have built-in measures to withstand disasters.

R Kumar, Managing Director (MD), Navin Housing & Properties (P) Ltd, who was a former deputy planner of Chennai Metropolitan Development Authority (CMDA), says: “After Chennai metropolitan area, which was under Zone II as per the 1984 seismic zone mapping, was brought under Zone III (moderate) in the revised mapping in 2002, guidelines have become stringent as per the specifications of the National Building Code of India. It is important to ensure that the structure has incorporated the design elements that will enable it to withstand earthquakes,” he says.

“But rules are flouted with impunity by some. Following the massive earthquake in Bhuj, Gujarat, it was found that only buildings that flouted the rules had collapsed, while the stronger structures managed to withstand the quake. We have a lesson to learn from this: Buyers should not be lured by just cheaper homes. They should ensure that the developer complies with all the safety standards set by the authorities concerned,” he says.

“The government should encourage redevelopment as this will mean that old and unsafe buildings can be demolished to construct structures that follow the new code. But the Tamil Nadu Housing Board (TNHB) instead of making it a simple, transparent process is aggravating it by placing several roadblocks,” he says.

The tremors have left Sarita Ravindran, a software engineer, extremely worried. She bought a house in the city in 2000 and is unsure if it meets all the safety requirements and is worried about the safety of her family as she is not sure that her home can withstand such disasters. “At least for some time in the future we will be worrying about the safety of our home. I hope the developer has followed the norms while constructing this apartment complex. But how do we find out,” she asks. Most people don’t seem to think twice about the quality of construction when they buy a house. Many of them just look for the cheapest option.

Ramesh Ramachandran, who works in the hospitality industry, says, “I never really bothered to find out what materials are being used in the construction of our house or if they meet the required standards. The tremors have opened my eyes. I am now asking my friends to be extra careful. We are spending our hard earned money to buy house and we should not compromise on quality to save a few thousand rupees.”

M Shivashanmugham, Senior Planner, CMDA, agrees. “It is the responsibility of the buyer to get a certified copy of the design of the structure from the developer,” he says. They should also do a background check on the reputation of the developer and the engineer overseeing the project. “Though the CMDA gives approvals for projects, monitoring the design and execution to ensure that all standards are met, is a difficult task and not within CMDA’s purview. If people come to the CMDA with complaints, they will be examined to find a solution,” he says. But this still leaves the questions over safety unanswered. A study commissioned by the department of information technology, government of Tamil Nadu, Anna University’s Centre for Disaster Mitigation and Management has been screening all buildings that are above three floors in the city for the past two years. The centre’s findings are yet to come, says Shivashanmugham. “There is only so much that CMDA can do. A huge part of the responsibility lies with the developer and to some extent the buyer,” Shivashanmugham says.

According to Suresh Jain, managing director, Vijay Shanthi Builders, low-rise structures are mostly vulnerable. “In India, we always wait for a disaster to happen before the authorities wake up. Several compromises happen in terms of the quality of steel, cement and other materials. It is imperative to generate awareness among buyers. After all, a house is a lifetime investment. They have to keep a constant check on the developers who are constructing their home,” he says. It is not enough to ensure to ensure that your buildings meet all the standards. If the neighbouring building is weak, it could result in a cascading effect destroying other buildings in the vicinity,” he says.

“The government should take stock of the buildings that are over 30 years old and get them redesigned to suit modern requirements. In this way we can prevent disasters. Redevelopment is a slow and painful process especially for old and TNHB flats. Since there are multiple owners, getting approvals from each one of them is extremely difficult. The only solution is for the authorities and buyers to be alert to ensure that all quality standards are met,” he adds.

According to experts, several buildings in the city do not have the wherewithal to deal with disasters because they were constructed way before Chennai was placed in CRZ III. The authorities need to study these buildings and retrofit them to suit the current requirements. “It is time to wake up. Even countries like Japan which has used technology to mitigate the effects of an earthquake is still not completely equipped to deal with such disasters, what chance a country like India stands,” they ask.

The tremors and the resultant panic may die down in a few days, but safety concerns will continue to haunt most people.

Sangeetha Nambiar, Times Property, Times of India (Chennai)

CMDA plan to digitize Chennai land records on the backburner

Chennai

A project to digitize all land records and documents in Chennai has been pushed to the backburner. It was proposed in 2007 and a Madras high court appointed monitoring committee sent a reminder in November 2011 but the Chennai Metropolitan Development Authority (CMDA) is yet to move on it.

The project, based on studies of similar models in foreign countries, was mainly aimed at making land-use systems and policies more transparent and efficient, ensuring that there would be no loopholes. The HC panel asked the CMDA to digitise all documents to ensure easy access to the public.

A highly-placed CMDA official admitted that no move was taken in this regard. “It was mainly to avoid delays in carrying out punitive measures against illegal structures. All documents, including those relating to land sites, dimensions and surrounding areas in detail, were to be in electronic form,” he said.

CMDA sources said a study would be undertaken on the quantity of documents and the quality of decades-old records. “Technical help from an external agency is a must as it will be a massive project involving lakhs of pages,” said the official. He added that a group of officials was purposefully delaying the project due to political pressure.

In 2001, Andhra Pradesh took up a digitization project and completed the pilot programme, digitizing records based on cadastral surveys, employing modern instruments and techniques. In October last, the Centre asked states to initiate digitization of land records. The National Council of Land Reforms suggested computerization of records, setting a two year time framefor a survey.

Source: The Times of India, Chennai

CMDA plan to digitize Chennai land records on the backburner

Chennai

A project to digitize all land records and documents in Chennai has been pushed to the backburner. It was proposed in 2007 and a Madras high court appointed monitoring committee sent a reminder in November 2011 but the Chennai Metropolitan Development Authority (CMDA) is yet to move on it.

The project, based on studies of similar models in foreign countries, was mainly aimed at making land-use systems and policies more transparent and efficient, ensuring that there would be no loopholes. The HC panel asked the CMDA to digitise all documents to ensure easy access to the public.

A highly-placed CMDA official admitted that no move was taken in this regard. “It was mainly to avoid delays in carrying out punitive measures against illegal structures. All documents, including those relating to land sites, dimensions and surrounding areas in detail, were to be in electronic form,” he said.

CMDA sources said a study would be undertaken on the quantity of documents and the quality of decades-old records. “Technical help from an external agency is a must as it will be a massive project involving lakhs of pages,” said the official. He added that a group of officials was purposefully delaying the project due to political pressure.

In 2001, Andhra Pradesh took up a digitization project and completed the pilot programme, digitizing records based on cadastral surveys, employing modern instruments and techniques. In October last, the Centre asked states to initiate digitization of land records. The National Council of Land Reforms suggested computerization of records, setting a two year time framefor a survey.

Source: The Times of India, Chennai

Growth prescription for Chennai real estate

R Kumar, Managing Director, Navin Builders, and former deputy planner of Chennai Metropolitan Development Authority (CMDA) speaks to Times Property on the need for a comprehensive plan if Chennai wants to be counted as a global city

What are the problems that prevent Chennai from becoming a city on par with global standards?

Chennai is grappling with three major problems, the most important being violation of building rules. Most buildings do not have parking facilities, or basic fire safety standards. There is major exploitation of land and FSI violations. All this results in a burden on the public and society at large. Second is traffic mismanagement. The traffic police is not only expected to regulate traffic they are also forced to plan traffic management which they are not equipped to handle. Traffic management is a specialised subject that needs to handled by professionals. But the authorities are yet to realise this.

The CMDA as a department has failed in fulfilling its objectives. Instead of focusing on planning they are obsessed with approving layouts and violations are not checked. The big violators are let off easily while marginal developers are made to suffer.

As a former member of the CMDA, what is your growth prescription for Chennai?

The outskirts of the city are developing fast. The focus now needs to be on better planning for these areas. The authorities need to have a plan in place, have better roads, provide good infrastructure facilities and crack down on violations and encroachments. The developers who follow the rules can be given some benefits. A system can be introduced where instead of paying tax; the builder has to give up a certain part of the built-up space to the government.

Where does Chennai’s real estate market stand? Is there growth, or is it stagnant?

Chennai’s growth story has been amazing. Except for the lull in 2007-08, the market has been steady and growing mainly due to the sensibilities of the local developers, location driven attitude and focus on end users. But for the government, the real estate sector is a golden goose and the focus is mainly on revenue generation. In fact, the registration department is mainly responsible for the inflationary trends witnessed by the sector.

Navin Builders has constructed projects in all segments – villas, luxury apartments and affordable homes. Which sector has witnessed the highest demand in recent years?

All the sectors have witnessed growth due to the huge demand. Two and three bedroom apartments, high-end villas and affordable housing sector too. But the affordable housing sector needs some reforms. Once they are in place more developers will venture into this market.

What are your upcoming projects in the city?

Navin Palmfronds, a villa project at Karapakkam opposite OMR, Srishti, a middle segment residential complex in Madipakkam, Springfield in Madavakkam, high-end homes in T Nagar, another project near the Adyar river in Madampakkam, projects in West Mambalam and Kodambakkam, a mini township in Thiruneermalai and a multi-storey residential project in Medavakkam are some of our new projects. We also plan to announce the launch of Eden Park in Virugambakkam along Porur-Kundrathur road during the CREDAI fair.

Sangeetha Nambiar , Times Property, Chennai

CMDA reforms development control norms

Chennai

Taking a move towards e-governance and reforming the approval process of the site, Chennai Metropolitan Development Authority (CMDA) has decided to segregate the approval process for site and building. With this, approval for site for a specific development may be examined and approved initially. The individual may apply for planning permission for building construction which will be dealt with, separately.

Presently, planning permission applications for proposed constructions are examined and permission is issued approving both the site and the construction for specific purposes proposed in the plan. The CMDA has reviewed the procedure in consultation with the stakeholders as part of improving the overall system.

In order to reduce the time taken for processing and save the man-hours, it has been decided through a government order no. 4/2012 dated February 4, that the existing practice of giving approval for site and construction may be separated. Hence, approval for site depending on purpose, use and type of development may be examined and approved initially. Subsequently the individual may apply for planning permission.

According to CMDA, site approval takes more time than planning permission which is invariably linked to scrutiny of factors like site inspection, need for link road, special sanction and public building. There are other issues too like deficiency in measurement of road width, OSR, demand for new roads, etc.

Site approval

The site will be inspected for ascertaining road width, site boundary, site condition and need for link road. The second level inspection will be completed within 15 working days, according to the official communication. If the need arises, then the proposal will be placed before the committee to decide on the road width adequacy, permissibility of the proposed activity under ‘special sanction’ at the site etc.

The ownership and subdivision aspects will be examined and if the proposal is in conformity with the development rules (DR) demand for development charge for the land, regularisation charge and open space reservation charges will be raised. On receipt of requisite charges and taking over of land for road widening, link roads and OSR spaces etc. through prescribed gift deed, planning permission will be issued to the site for the specific purpose/type of development.

Building approval after site approval

After obtaining the site approval, a person can apply for planning permission for construction over the approved site. If the site was inspected within six months at the stage of site approval, then the site inspection will be dispensed with.

Latest ownership document and a copy of the patta with FMB sketch or PLR extract of the site and latest EC are required to be furnished by the applicant for scrutiny and for record in the connected file in which the planning permission for building construction is dealt with.

If the proposed construction is in conformity with the development regulation, all the applicable charges except those already collected at the stage of site approval will be collected and further processing will be done. In cases where the site approval did not involve regularisation of unauthorised subdivision and reservation and handing over of OSR space or collection of OSR charges in lieu, for larger development of special buildings, group developments, MSBs, the conformity of OSR rule provision will be examined as provided in the development rules.

A list of planning permissions accorded for building constructions will also be displayed in the CMDA’s website which will be updated on a weekly basis. At the same time if an applicant prefers to apply for both site approval and building approval together as is being done now, the option will continue to be available and the application shall contain all the details and plans required for both.

Source: http://content.magicbricks.com/cmda-reforms-development-control-norms

Additional FSI may be introduced near Chennai metro rail corridor

Chennai

As the metro rail chugs along a 45 km stretch across Chennai, it may open up a gold mine for the state government and provide the city a whole new look.

The government chanced upon the financial potential of the metro rail while examining a proposal from Chennai Metro Rail Limited (CMRL) to introduce additional floor space index (FSI is the ratio of land area to the built-up area) within 500 metres of the metro corridor.

The proposal, which came up for discussion at a CMRL committee meeting, headed by chief secretary Debendranath Sarangi on February 14, has been forwarded to the Chennai Metropolitan Development Authority for commissioning a detailed study. “We expect the report to be ready in three months,” said a senior official.

The potential for revenue generation through selling space is staggering. CMDA usually gives FSI of 2.5 for high-rise buildings in the city. If it is increased by 1.5 FSI along the metro corridor, the state can generate up to Rs 2.5 lakh crore in revenues through property tax (by adopting the yardstick of the prevailing premium FSI scheme). If FSI is increased by 2.5, the revenue will go up to Rs 4 lakh crore. Bangalore metro corridor is also working on a higher FSI model.

Potential Gold Mine

The govt may relax building restrictions, allowing for taller constructions within 500 m of the metro corridor The govt may generate at least 2.5 lakh crore if the plan, which has been proposed by Chennai Metro Rail Limited, is put into action.

Extra FSI will up land price

The proposal by CMRL is a transit-oriented development model, adopted in cities like New York, Singapore and Seoul. In the process, the city skyline will be dotted with skyscrapers and vertical villages.It aims to increase population density along the metro corridors and bring passengers within walking distance of stations.On the face of it, CMRL’s gain is optimal use of metro and faster returns on investment.

However, every piece of land along the metro corridor in Chennai will not qualify for such benefits because it will also have to comply with other development control rules of the CMDA.

Small plots will have to be pooled into large parcels to draw maximum potential.Even if 50% of landowners avail additional FSI over a period of time, the state will generate enough funds to write off its entire public debt of 1.18 lakh crore and take up many new infrastructure projects.

On the flip side, land prices will go up wherever additional FSI is available. “However, it won’t lead to increase in apartment prices,” noted P Suresh, a builder.

Many world cities have much higher FSI than Indian cities. New York has 15 FSI for the central business district (CBD), 10 FSI for the rest of the city and 0.5 FSI for suburbs. Singapore has 8 FSI in the CBD, 6 FSI for the rest of the city and 1.5 FSI for suburbs. Seoul has 10 FSI in the CBD, 8 FSI in the rest and 0.5 FSI in the suburbs.

The issue is not just about real estate growth and filling the government coffers.The city planners have to be cautious in comparing Chennai with other world cities, said another official.

“Their infrastructure for utilities (like water supply and sewerage) is capable of catering to the needs of a high population density. Chennai’s infrastructure, on the other hand, is inadequate. CMDA, Chennai Corporation and other service agencies have to upgrade infrastructure like roads, water and power supply to meet the growing demands. The good news is that funds will not be a constraint if we sell virtual space,” said the official.

Being liberal on FSI alone will not facilitate infrastructural growth along transit corridors, said Suresh. “The CMDA has to shed its baggage and take a fresh look at its development control rules, without which more car parks and other support infrastructure cannot be created. The government can also look at preparing a detailed development plan for the entire metro corridor.”

Source: The Times of India, Chennai

CMDA initiates measures for prospective buyers

Chennai

The Chennai Metropolitan Development Authority (CMDA) has initiated several measures for investors in real estate in the city to update themselves on the land use pattern, approval status, etc. This is a virtual boost to buyers and investors in real estate who are otherwise taken for a ride by unscrupulous people in the industry.

A counselling centre provides a wide range of services free of cost to those looking for guidance with regard to land use, approval and acquisition status prior to investment. In fact with the e-governance initiative taking shape, one can obtain the status of land use through CMDA website today by providing location specific information sought for.

A long standing requirement of the real estate sector in Tamil Nadu is the need to speed up the planning approval process. Towards this objective, the CMDA is conducting a trial run of the automatic approval process mechanism that will scrutinise the application as and when it is submitted to the authority. Through this process, architects may submit it in a CD. The department is now conducting a trial run before ensuring that developers can safely submit it online.

The NSC software is expected to be ready shortly, according to senior official sources in CMDA. Once implemented there is no need for developers to swarm the authorities with voluminous documents to represent their cases. They can submit the application online and ascertain the status of their application also online. In fact the system is modified in such a way that they can see at what stage or with whom the application is lying i.e. assistant planner or senior planner or member secretary.

While delivering the inaugural address at the recently held 3-day Credai property show in Chennai Trade Centre, Phanindra Reddy, IAS, Secretary to the Government, Housing and Urban Development Department, has also assured the industry to look into the paramount need of speeding up the planning approval process.

The industry has also voiced concern that the 18% per cent growth rate recorded in real estate development in the state could have been 30% had there been a pragmatic approach on the government front in reforming the archaic rules that act as deterrents in the housing sector.

Source: http://content.magicbricks.com/cmda-initiates-measures-for-prospective-buyers

1BHKs become popular in Chennai

Chennai

With soaring property prices and high disposable incomes among young working professionals, one bedroom flats (1BHKs) are gradually becoming popular among end-users and investors alike.

Chennai, as any real estate expert will tell you, has always been an end-user-driven market. Which is precisely why 2BHKs (bedroom hall kitchen) and 3 BHKs continue to be popular here, thanks to the fact that Chennaiites have conventionally moved in with their families and preferred larger spaces.

However, parallel to the booming market for 2 and 3 BHKs, a small but steady market for 1 BHKs has evolved over the last few years. One of the reasons cited is the CMDA’s (Chennai Metropolitan Development Authority) mandate to reserve 10% of the space in larger projects for economically weaker sections (EWS). As Rajkumar Kamdar, Director, Prince Foundations, points out, “According to the provisions under CMDA’s Second Master Plan, projects spread across 2.5 acres or more must reserve 10% of their area for construction of 45 sq m units (or less) for EWS. Only one bedroom apartments can be constructed in that space. And since 2 BHKs and 3 BHKs are out of reach for the EWS (and the general public, at large), most of them feel that it makes economic sense to purchase a one bedroom apartment.”

But do these apartments necessarily cater to the EWS category? How many of them can really afford an apartment, no matter how small? Mehul Doshi, MD of Doshi Builders, believes that it depends on the location of the project. “One bedroom apartments in the heart of the city are definitely not affordable. But those in the suburbs and outskirts of the city are well within their reach,” he explains. Doshi clarifies that CMDA’s norm classifies these apartments based on size, not necessarily on income levels of buyers. So who are the buyers? Deepak Shah, Senior VP – Sales and Marketing, Prestige Estates Projects Ltd, says, “The buyer profile includes newly married couples, single working professionals from the IT sector, etc.”

These apartments also come to the rescue of bachelors (from the city and other places) who find it difficult to rent a place in the city. Suresh Jain, MD, Vijayshanthi Builders, says, “With the IT boom and the consequent influx of MNCs, owners/developers have been leasing out one bedroom apartments on OMR, GST, etc, to companies. Besides, a lot of young working professionals (from other cities) purchase one bedroom apartments in these areas and dispose of it once they leave the city.” Kamdar agrees that this is becoming a prominent trend. He says, “It serves as a small ticket investment for these working professionals. They pay EMIs instead of rentals, and since these apartments do not cost much, they do not feel financially burdened. They can either decide to keep the apartment and rent it out, when they leave, or sell it as per the market value.” Besides, with changing lifestyles and family structures, the single bedroom concept has found many takers from the younger generation.

As Deepak points out, “The emergence of nuclear families, growing trend of single men and women preferring to stay on their own, high income levels of buyers and the influx of people from other states who are keen on investing in apartments here, as opposed to paying rent, has led to an increase in demand for one BHKs.”

Whether as an investment or rental option, the saleability of one bedroom apartments cannot be overlooked. Take the Prestige Group, for instance. Their new project Bella Vista in Porur has 600 1 BHK apartments, each of which is about 600 sq ft in size. These apartments cost 25 lakhs onwards. Similarly, Osian Chlorophyll, by SPR &RG Constructions, in Porur has 232 single bedroom apartments (665 sq ft each) costing 29.9 lakhs onwards.

Prince Foundations’ Prince Village in Tondiarpet sold out its one bedroom apartments on the first day of its launch. Almost all projects have recorded good sales of one bedroom apartments. While exclusive projects for single bedroom flats may not be in the offing anytime soon in Chennai, developers are waking up to the potential of this segment. Mehul Doshi says, “We launched Doshi Etopia II on OMR a few months ago, and this project has 40 single bedroom apartments, most of which are sold. We’re planning to launch a project consisting of studio apartments and 1 BHKs in Perungudi very soon.”

Deepak Shah is of the opinion that the sector is set to grow further. He says, “As the city is on the fast track to growth and industrialisation, thanks to the booming IT, service and automobile sectors, demand for smaller houses, especially in the age group of 25 to 30, will grow.”

While many developers believe that single bedroom apartments are in vogue, thanks to CMDA’s mandate, some like Rajesh Babu, chief real estate consultant, RECS Group, are sceptical. He points out that single bedroom apartments were popular decades ago, when the apartment concept in the city came into existence. “With the introduction of G (ground floor) +3 or multistoried buildings, 2 and 3 bhk apartments grew in popularity. However, now, as per the second master plan, single bedroom flats have made a comeback of sorts but their proportions continue to be less and they cater to a small section of buyers. It will take ages for our city to even match the volumes that Mumbai, for instance, has recorded, in terms of single bedroom apartments that are popular there for a variety of reasons,” he explains.

Sandeep Pantvaidya, VP – Marketing, Sales and CRM, SPR & RG Constructions, also agrees that 2 and 3 BHKs continue to be the preferred choices. “While there is an opportunity to rent or sell single bedroom apartments as serviced apartments, it is still in its nascent stage. There isn’t much scope for further growth in this sector, otherwise.”

Opinions are divided on the growth prospects for single bedroom apartments in the city. While comparisons to the market in Mumbai may be unrealistic, at the moment, it is however, clear that the needs of a certain section of buyers are being addressed through single bedroom apartments. Where is it projected to go from here? Only time will tell.

Source: Times Property, Times of India, Chennai

Hike in land prices in Chennai

The prolific growth of Chennai in all three directions has impacted land price to a considerable extent. Lack of adequate housing development and high cost of housing are attributed to the steep hike in land prices. There is no scientific rationale to value the land price and on most occasions, it is the demand-supply mismatch that tilts the price.

According to industry sources, property developers are unable to get access to the land owners and will have to deal with the power of attorney holders. The due diligence exercise involving whether the power has been revoked or not is again a time consuming affair and unless the location justifies, developmental efforts were in vain.

Revenue records are still not updated, even though computerisation process started as early as in 1986 and unscientific land use has restricted urban development area. The process of verification even today involves travelling several miles which again is a time consuming process especially when the developer is entering the Chennai for maiden development. Recently some of the records have been shifted to Tiruvannamalai. The agony and the associated hardship for property developers need not be overstressed in such a scenario.

Yet another factor inhibiting housing development is the archaic rules and the inability of the related government departments to agree on vexatious issues. For instance when DTCP finds there is a proposed road admeasuring 60 ft, FSI at 2.5 is sanctioned whereas CMDA does not agree with the view unless there is a road already laid and the developer ultimately lands in reduced FSI. All the additional cost is ultimately passed on to the buyer. The industry sources have already voiced concerns that because of the delay in approval process alone, a consumer has to fork out Rs 233 per sqft as additional cost while buying an apartment in Chennai.

This is apart from the government levies which is considered 33% of the unit cost. However, the CMDA has recently introduced several measures to reduce the delay including green channel option.

Source: http://content.magicbricks.com/hike-in-land-prices-in-chennai