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REDEVELOPMENT OF OLD BUILDINGS

Introduction:
Shelter is a basic human need, which has become a major challenge in a country, which is fast
urbanizing. Maharashtra is one of the most urbanized states in the country. Whereas nationally
27% of the population was in the urban areas, in Maharashtra, the figure was 42% (Census
2001). Housing in urban areas assumes much greater significance, as it relates not only to basic
shelter needs but also provides a facility to the citizens to access services and be part of the
development process. Housing implies not only construction of bricks and mortar; it includes the
supporting infrastructure, access to transport and employment opportunities.

Meaning:
Redevelopment refers to the process of reconstruction of the residential/commercial premises by
demolition of the existing structure and construction of a new structure. This is done by utilizing
the potential of the land by exploiting additional TDR, FSI as specified under the Development
Control Regulations of Municipal Corporation of Greater Mumbai (MCGM).Buildings or
structures that individuals and their family may live in that meet certain federal regulations.
Different housing situations vary for individuals and may depend on age, family, and geographic
location. For example, a recent university graduate in an urban environment in the US may live
in a rented apartment whereas a middle-aged entrepreneur may live in a house with or without a
mortgage.
Anything that covers, protects, or supports another thing. For example, the casing of a desktop
computer is its housing component and can be made of multiple materials to protect the internal
components.

Types of Redevelopment
Redevelopment of old dilapidated building
Redevelopment of Old Mhada Colony

Why Redevelopment is required


For Existing Owners
Though they are in dire need of extensive repairs, societies are starved of necessary funds
required to carry them out. On the one hand, they do not have the resources and expertise to
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handle the repairs on their own and on the other, the families of the members have expanded and
they need larger space to accommodate themselves.

Research Problem:
Mumbai suffers from an acute shortage of affordable housing. This is due to high rate of
population growth as well as migration from various other states of India. Mumbai, the
sprawling mega polis spread over 600 sq. km, has seen its population grow at a rate which is
twice that of Maharashtras. The problem of scarcity of housing needs to be solved before any
crisis occurs.
Redevelopment of old housing is considered as a preferable option by state and municipal
authorities. This research study is based on problem of housing scarcity and if the problem can
be solved through redevelopment of old housing in Mumbai or not.

Research Objective:
To study the issue of scarcity of housing in Mumbai.
To find if redevelopment will create availability of housing or not.

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Housing Shortage in Urban India Statistics :


The Census of India, 2001 estimates that 27.81 percent of total population lives in urban areas of
the country. A Technical Group was constituted by the Ministry of Housing & Urban Poverty
Alleviation in 2006 to assess the urban housing shortage. The Group estimated that at the end of
the 10th Five Year Plan (2007-08), the total housing shortage in the country was 24.71 million.

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Urban Population of India


The projected urban population in India as on 1st March, for the years 2010 to 2020 as per
Census of India, 2001 is indicated in the table below. Housing shortage city.
The Technical Group constituted by the Ministry in 2006 to assess the urban housing shortage
has estimated that the total housing requirement during the 11th Plan period (2007-2012) would
be 26.53 million dwelling units including the housing shortage of 24.71 million dwelling units at
the beginning of 11th Plan. No estimates as to housing requirements in the next ten years are
available with the Ministry.

The population Delhi, Mumbai, Kolkata and Chennai, together with slum population and
percentage of population living in slums, as estimated in the Slum Population India Series-I are
given in table below.
Jawaharlal Nehru National Urban Renewal Mission
The Central Government is supporting the construction of housing for poor sections of the
society living in urban slums. The Jawaharlal Nehru National Urban Renewal Mission
(JNNURM), launched by the Government in the year 2005 supports provision of housing and
basic services to urban poor in slums in 65 specified cities under the Sub Mission Basic Services
to the Urban Poor (BSUP) and in other cities and towns under the Integrated Housing and Slum
Development Programmed (IHSDP).
The schemes are demand driven and so far 15, 40,611 houses have been sanctioned and central
share of Rs. 20130.79 crores committed for the purpose. The Government has announced a new
scheme called Rajiv Awas Yojana (RAY) for providing support for making cities slum free to
States that are willing to provide property rights to slum dwellers.
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Mumbai must create 1.1 million low income houses over the next decade 0.8million to
rehabilate existing slum dwellers and 0.3million to house the population increase and migration
of low income segment.

Drawbacks of old Buildings:


Lack of services such as security, cleaning, and to operate pumps.
Absence of common facilities like gymnasium and a society office.
Unavailability of proper playing area for children in the compound.

Perennial leakage in the structure and also in the overhead or ground floor water tanks.
Unavailability of elevators causing suffering to heart patients and the elderly.
Absence of a proper entrance lobby.
Room sizes being too small.
Interior planning of rooms being unsatisfactory.
Lack of attached toilets in bedrooms.
Plumbing/electrical lines lying open
Size of toilets being too small
Low resale value due to poor condition of the building

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For Builders/Developers
Builders/Developers opting for purchasing land and developing the same, incur huge stamp duty
cost on transfer of land. Instead redevelopment of old building reduces stamp duty to a
significant extent. For this they enter into development Agreement with Society. Entering into
such development agreement does not vest any title of the land in the favor of developer, but
merely authorizes the developer to develop the land.
The builder approaches the owner of the land and, instead of buying the land and paying a large
amount towards the purchase; he enters into an agreement with the owner for permission to
develop the land on the owners behalf. In other words, in a case of development, the builder
constructs the buildings at his cost, retains some flats for himself to be sold in the open market,
gives a few flats to the landowner and also pays him some monetary consideration. The
developer carries out this development work in the capacity of a constituted attorney of the
owner and not on his own behalf.
Later, these flats are sold by the developer in the open market and from such sale, he makes a
profit. The rate of stamp duty in respect of development agreement being much less than that
payable on outright purchase, theres a significant saving in stamp duty cost. Later, when the
building is actually conveyed to a co-operative society or a company, the landowner and builder
become party to the conveyance deed on which the stamp duty is payable and the same is also
registered.

Procedure for Redevelopment of an Immovable Property:

The consent of the society members must be obtained during society meetings. On or before the
execution of the agreement, the society should hand over to the developers, the copy of the
conveyance deed in respect of the societys property, along with certified copies of the property
register card, index II, latest electricity bill, water bill, municipal tax bill, N.A. tax bill in respect
of the societys property and also, the copy of the registration certificate of society under the
Maharashtra Cooperative Societies Act, 1960.
The list of members with their choice of new flats and parking, area entitlement among others as
agreed upon in the new building should be prepared. The terms about the provision of
temporary alternate accommodation to the members during the construction period should also
be made clear in the agreement.

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Challenges:
Inability to assemble all members of the society at a single point of time, as some of the
members may not be available. Some flats may be mortgaged to a bank or a financial institution
Some of the members may be interested in purchase of new flats at a discounted rate in the new
building.
The title may not be clear, i.e. conveyance deed of the land and structure is not executed in favor
of the society.
Anxiety in the minds of the members about possible delay in completion of the project after they
have vacated their old flats.
The old documents of the members may not be traceable
Lack of unity amongst the members
The tax issues regarding redevelopment are not clear to the society.
Very high prices are expected on sale of old flats in the case of certain members who are not
interested in staying in the new building.
Corpus amount takes a long time to be fixed by the society.
The decision as to which member will get what type of parking takes a very long time.

Government Role:
The redevelopment under DCR 33(7) and 33(9) will continue, it is proposed to introduce the
cluster or precinct development approach and to incentivize the same.

Cluster Approach:
The Cluster Redevelopment Approach has successfully transformed the cities of Hong Kong,
Singapore and Shanghai. It is proposed to adopt a similar approach for Urban Renewal in
Maharashtra State. For the redevelopment of old buildings, it is proposed to undertake cluster
development as strategy for expediting and to bring about planned development. In order to
promote cluster redevelopment, it is proposed to give higher FSI to large cluster redevelopment.
The main objectives of the cluster approach will be as follows: To transform the fractured development in to cohesive urban unit as laid down in
Development Plan.
To provide modern accommodation and social services which raise living standards and
reduce disparities amongst different sections of population.
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To provide an environment which permits the residents of such areas to live fuller and
richer lives free of physical and social stress that are generally associated with haphazard
urban development.
To facilitate development and proper maintenance of infrastructure facilities such as
sewerage / storm water drainage /DP Roads which cannot be developed because of the
present haphazard Development
To generate maximum number of surplus tenements for rehabilitation of the occupiers
who are on Master List of MHADA. The fact that MHADA will play the nodal role in
the cluster approach and shall be a signatory to all the agreements will provide greater
acceptability and credibility amongst the tenants and landlords.

JOINT VENTURE FOR REDEVELOPMENT PROJECTS:


Till date, the Repairs & Reconstruction Board of MHADA has been able to undertake
redevelopment of old and dilapidated buildings under DCR 33(9) Few Other old and dilapidated
buildings have been reconstructed through private developers under DCR 33(7). In order to
accelerate the redevelopment of old and dilapidated buildings, it is proposed to encourage
redevelopment projects through joint ventures in which MHADA along with the tenants,
landlords and private developers, if necessary, will come together for undertaking redevelopment
of Cluster. Detailed guidelines for this scheme shall be issued by the Urban Development
Department separately.

ADOPTION OF EARLIER REPORTS:


The problem of Urban Renewal and of old and dilapidated buildings and the need to bring
together tenants and landlords is a concern not only for Mumbai and its suburban areas but, also
for other cities of Maharashtra State. This problem has been studied in detail and
recommendations of Sukhthankar Committee and Afzul purkar Committee have been accepted
by
Government. It is now proposed to extend the applicability of these two reports to all Municipal
Areas of Maharashtra. The concerned Municipal Corporation or Council will adopt and
Implement the principles enunciated in these reports with suitable local modifications. This will
be monitored by the Urban Development Department.

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Old Building Redevelopment Rules & Redevelopment Regulations:


Stages of Redevelopment:

1. Offer letter to the society


2. Terms and conditions with the society
3. Agreement with the society
4. Sanction from MCGM in favor of the society
5. Loading of TDR in the societys name
6. Obtaining the IOD
7. Shifting of the members
8. Demolition of the building
9. Obtaining the CC
10. Construction of the new building
11. Obtaining the OC
12. Shifting the old members
Offer letter to the society: The Housing Society is required to advertise in 2 leading newspapers
inviting the sealed tenders from the Developers and a Redevelopment Committee is formed to
shortlist at least 3 Developers on merits and the comparative data is placed before the SPGM for
final selection. The selected Developer is informed accordingly and his terms are invited in
writing as an Offer letter to the society

Terms and conditions with the society: The first step towards the re-development is agreeing on
the basic terms and conditions between the members and the Developer. The broad terms and
conditions will include extra area, corpus money, shifting charges, alternate accommodation,
time of re-development, amenities in the new building, etc.
Finalizing the plans with members: After due consultation with all the members, the plan will be
made to suit the requirements of the existing members and will be approved by them before
applying for sanction from MCGM
Agreement with the society: The execution of the development agreement will be done once the
above two points have been cleared by both the parties and after the draft copy of the agreement
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have been approved by the solicitors of both the parties. It is possible to appoint a common
solicitor so as to reduce the time in execution of the document
Sanction from MCGM in favor of the society: After the execution of the development
agreement, plans are put up for sanction from MCGM with regards to the entire layout as well as
the concession plans in favor of TWO FSI (i.e. plot area + TDR purchased from open market).
This step makes the society feel safe and confident towards the Develop
Loading of TDR in favor of the society: On receipt of the plans from MCGM approving the
loading of TDR, the Developer will purchase the TDR from the open market in the name of the
society and get the same deducted and loaded from MCGM. This step is taken with the intention
of making the society feel secure about the entire development process
Obtaining the IOD: After the TDR is loaded, the IOD is obtained from the MCGM, the
Developer then starts fulfilling all the conditions as mentioned in the IOD before obtaining the
Commence Certificate
Shifting of the members: The members will feel lot more confident after the IOD is been
obtained from the MCGM towards the entire development of TWO FSI. The members will now
shift into their alternate accommodation as a pre-requisite before demolition of the building
which is a must before obtaining the CC from MCGM
Demolition of the building: Once the members have shifted into their alternate accommodation,
the demolition of the building will take place either all the wings simultaneously or phase wise
depending upon the scheme of re-development. Usually about three months are given to the
members from the date of execution of the development agreement before asking them to shift to
the alternate accommodation
Obtaining the CC: The IOD approval and demolition of the building will be followed by the
issue of the CC (plinth level) by the MCGM which shall enable the Developer to start the
construction work and after the plinth lines are verified by the MCGM officers, the further CC is
granted for the complete building

Construction of the building: The building construction work will began in full earnest as per the
approved plans by the MCGM taking into consideration the various safety factors to be
considered during the construction work. The quality and the amenities will be provided as per
agreed terms and conditions
Obtaining the OC: The last step before the construction work is termed as complete is obtaining
the Occupation Certificate enabling the Developer to allot the occupation to the old as well as
the new member
Shifting the old members: On receipt of the Occupancy Certificate the Developer can lawfully
allow the possession of the flats to be taken over by their owners

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Duties & Functions of the Developer:


The Developer to demolish the building existing in the plot and construct new multi storied
buildings taking into account the earthquake resistant factors as directed by The Municipal
Corporation of Greater Mumbai. The new building should have stilt for car parking and should
consist of stories as per approved plans. The final plans are to be prepared after due consultation
with the managing committee and understanding their requirements.
The Developer shall be responsible to obtain all the necessary approvals from The Municipal
Corporation of Greater Mumbai and all other statutory and Government offices and departments
which will include:

1. Development Planning Remark or Town Planning Remark: MCGM (Dev. Dept.)


2. Survey of the entire plot with regards to the area and topography of the plot, existing plot
boundary and existing structures (Developers Architect)
3. Intimation of Disapproval (IOD): MCGM
4. Property Tax Assessment NOC: MCGM (Assessment Department)
5. Hydraulic Engineer No Objection Certificate: MCGM (Hydraulic Department)
6. Storm Water Drainage No Objection Certificate: MCGM
7. Sewerage No Objection Certificate: MCGM
8. Traffic Dept. Of Municipal Corporation of Greater Mumbai No Objection Certificate:
MCGM
9. Urban Land Ceiling NOC: Competent Authority in Collectors Office
10. Tree No Objection Certificate: MCGM (Tree Authority)
11. Non-Agricultural Permission: Collector's Office
12. Civil Aviation No Objection Certificate: Airport Authority of India
13. Pest Control No Objection Certificate: MCGM (PCO)
14. MTNL No Objection Certificate: MTNL
15. Chief Fire Officer's No Objection Certificate: Fire Department Office
16. Commencement Certificate: MCGM
17. Lift Inspection No Objection Certificate: Inspector of Lifts, PW
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18. Occupation Certificate (OC): MCGM


19. Water Connection Certificate under section 270A: MCGM
20. Drainage Completion Certificate: MCGM (Water Department)
21. Building Completion Certificate (BCC): MCGM
22. TDR Loading: MCGM
23. Building Demolition Work: Contractor appointed for demolition work
24. Soil Testing Report: The Concerned Laboratory
Please ensure to collect all the listed certificates from the Developer/Developer as the same must
be with the custody of the Housing Society once the redevelopment of the property is completed
and the occupancy certificate is issued by MCGM to rehouse the members.

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Findings
Most metropolitan cities around the world face scarcity of housing.
Population growth and Migration are two major cause of housing scarcity in Mumbai.
Slums & old housing in Mumbai cover large area of city which creates inefficient
utilization of land.
Redevelopment or Refabricating of old houses is considered as best solution to reduce
scarcity of housing.
China has similar economical and Demographical characteristics as India. China
implemented cluster development of urban areas and was successful to reduce scarcity of
housing.
If Mumbai is provided similar infrastructure development then housing scarcity can be
reduced.

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Conclusion

There are constraints on the availability of open land within the city limits coupled with fast
growing demand for houses and shortage of housing stock. On the other hand that there are
thousands of ageing buildings which are dilapidated and have reached a stage where it is not
possible to carry out structural repairs and rehabilitation as the same are not economically viable.
The redevelopment of old building has become a necessity since the problem of old and
dilapidated buildings in the city of Mumbai grows more acute with each passing year and with
each passing monsoon more and more building becomes dangerous and unfit for habitation.
Many of these buildings are so run down that they are unrepairable and the only solution is to
put them down totally and to reconstruct them.
Scheme which involves adequate and due compensation to the landlord and the tenants/members
and to the developer duly is an ideal Redevelopment scheme. This needs faster procedural
clearance from Government.

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