TDR, Paid FSI, Real Estate & City!

“If you understood the plan of your government, which means it is a policy or if you don't it means it is politics.”… Rashid Jorvee.

Rashid Jorvee is a blogger & obviously very much from our country India as whom else can write about our govt’s policies in so crisp words! His above words are probably the best criticism (sorry but that’s what my take is) about the way our govt works & no, I am not against or for any govt (read political party) & fortunately we have not yet reached to situation in which our neighboring countries are, when it comes to freedom of blogging; that’s why Rashid can write such words for govt & I can use them in admiration! No wonder I recalled Rashid’s words about policies when I read recent headlines about our Maharashtra State for making it at 13^th number (read rank) on “Ease of Doing Business” front, amongst all the States in the country. Surely this is something not of pride for the State, which holds financial capitol of the country i.e. “Aamchi Mumbai’! At the same time there was one more news, about the infamous word of real estate TDR, the “Mai Baap Govt’ (read State govt) is thinking of deciding the buying or sailing rates of TDR. For those lucky souls who are unaware of TDR i.e. Transfer of Development Rights, is a notional figure indication the sq ft area given to the land lord against acquiring his land for reservation purpose. This is technical definition of TDR but in simple words when local body which in Pune’s case is PMC i.e. Pune Municipal Corporation makes development plan (DP) of the city, makes provision for various public utility purposes like garden, schools, roads, bus stations & many such. And obvious that if these lands are to be bought at market rate then there won’t be no money left with PMC for actually building all above mentioned public serving utilities & many such; so PMC gives TDR of such lands to the land owners whose lands comes under reservation in lieu of which he or she will hand over the land to PMC & sale this TDR in market ( read builders) & they can use this TDR (figure in sq ft area) on their other projects where lands is marked for residential purpose.  In a way the TDR is very noble & effective concept till very recent & got failed only because of the as usual confused policy making of govt causing impact on not just real estate but entire city’s development of infrastructure which is on dying verge is a fact! 

And that’s how TDR became key word for real estate of city as it’s directly related to the building potential of any land changing entire financials of the project. For years people (read all the segments related to TDR including PMC) made money on TDR trading rather terminologies like “TDR Lobby” came in existence to describe the personalities who holds major chunk of TDR or reservation lands. As usual like any commodity which generates money, attracts bad elements & TDR also wasn’t exception to this law. And in addition to the same the ever changing policies of the govt regarding utilization of this TDR along with the tedious procedures involved in generating TDR assured that the key to TDR remains in fewer hands! For years this was going smoothly until the entire real estate’s equations started changing as last three four years had not been good to real estate is naked truth. Here when I say "not good" for real estate means mostly for the builders or for those who looks at real estate just as milking cow! It’s been wonderful for the end users i.e. home buyers as prices are steady rather lowered in many cases & more options are available & the flat price war has reached to its peak just the way we experienced in mobile data plans! This is bound to reflect on prices of TDR which in a way is parasite entity while building. Many won’t like it but what is a parasite but an entity which survives on some other tree or body; just the same way TDR survives only on some other land with residential potential!

And then thanks to the ever changing polices of TDR utilization i.e. right from categorizing TDR to allowing its use on different plots to premiums for utilizing TDR, nothing   is simple! First when TDR concept started it has been categorized in three zones i.e. A, B & C, depending upon proximity to city center. Also there was categories in TDR is generated by slum development & all other types of TDR which gets generated by acquiring reservation lands, god know logic behind this again! And maximum for few years was 0.8 times of net plot area which got on 0.4 (don’t ask why) & again was raised to 0.6 time of net plot area. Here also 0.2 out of this was supposed to be of slum TDR & rest others. And in A zone, that’s central part of city, no TDR utilization was permissible, again a grave mistake! Though the TDR generated by A zone reservations was allowed in B or C zone. This concept was for decongestion of development from center of city which was washed away soon, as by present policy all along the so called Metro corridor which mostly is going through city center will be showered with nearly 4 FSI to support Metro commuting population i.e. users of Metro! Now, don’t ask where logic of decongestion of city is gone, as we don’t ask such questions to “Mai Baap” govt! Then by recent modifications for land acquisition in city areas compensation has been doubled for the lands getting acquired for reservations. Obviously TDR also got doubled as it’s in a way compensation for the land to the land lords this has doubled the generation of TDR. Concept was the landowner will get double compensation so they will willingly hand over the land. Again a failed logic (read policy) as this is ok if the compensation is in hard cash (read money form) but as govt doubled the TDR as compensation, the rates of TDR in open market came down with more supply than demand & at many places has gone even below ready reckoner values of the lands. So more & more people (read land lords) owning lands with reservation are asking compensation in form of currency of which PMC is short of! Then come the final blow i.e. “Paid FSI’, by virtue of which instead land lords getting money PMC itself started giving more FSI to the developers by making FSI available with payment in proportion to respective land rates. Now with paid FSI, Metro corridor FSI competing TDR as well double compensation applicable even when paid in cash, who will buy TDR!

And then the most important issue regarding TDR was the way it’s supposed to be utilized, as long back in 80”s movies the villain used to tell his assistants, “ise liquid oxygen me daal do, liquid ise jine nahi dega aur oxygen ise marane nahi dega”!  The dialogue was so funny rather than a threat it became a joke but in case of TDR it’s true that you will get the satisfaction of having the TDR but the rules are set such that you won’t be able to use it! Right from height restriction to access road width to parking norms to plot size, so many complexities are there that I wonder in how many cases the TDR really can be used to fullest potential (if bought in first place) as in following all the rules the planning has become a chaos is a bitter truth. As have a look at the Prabhat Road type areas which were green some decades back & now it the zest of utilizing TDR potential ( land potential) every square inch space has been utilized leaving no space for trees or water seeping in ground. And then the planning authorities forgot that you can give TDR as much you want but the land (read space) available to consume this TDR is limited & unless we increase the land for consuming TDR all we will end up is creating concrete jungles, problems of which we are already facing. As this concrete jungle came with traffic jams, water clogging, temperature rise & what not but again who cares as we care for TDR more than anything else!

The main question is, with all this TDR, paid FSI, Metro FSI, has the city generated enough funds by which the civic infrastructure has been strengthened? Answer is, we are in much better shape than other cities but that doesn’t mean we are good! We are just lucky to survive as every day the city is buckling under the pressure of increasing population & new buildings which are a must to accumulate the population (and I am referring to legal buildings only) & the civic demands like water, transport, drainage, electricity & many such which comes along with the population! And we are short of funds, that too in huge quantity & more & more people are asking for money instead of TDR; so, clearly the TDR concept is failing & if we don’t do something radical in time (read positive) then very soon the Smart City will turn in to Sad City!

Need of the time is make a uniform policy about paid FSI or TDR & make it realistic instead playing with the words. First & most important create or generate  new lands to utilize this so called virtual development potential (read TDR or paid FSI) as here we waste decades just to merge few villages in PMC where as these new added areas are really the TDR consuming grounds having huge potential. The citizens need homes & at affordable price, which is only possible in villages (actually they are step suburbs like step sons in the family) adjoining to PMC limits. Make these villages part of PMC as fast you can & then allow maximum TDR to consume here at lesser premium. The problem with govt is it wants to have the cake & eat it too; means govt wants affordable homes along with money for infrastructure development but at the same time govt wants to earn money out of TDR by every possible way, defeating the very purpose of it! As it’s a vicious circle, govt don’t have money to buy reservation land so it gives TDR. But the very govt wants money out of consumption of this TDR making the utilization of TDR unviable for the developers so there are no takers for TDR resulting rates of TDR dropping low & so the land lords don’t want TDR but money for their land, which govt don’t have & in the ends city infrastructure remains weak making citizens to suffer! The main reason is the lands where TDR can be used are not salable lands as per the developers as these lands doesn’t have infrastructure like roads, water, public transport; so first let the govt (PMC) focus on curtailing the useless expenses like concerting existing roads in city center & use that money to build basic roads in step suburbs as then people will be ready to move in those locations, so will be the developers. 

Finally, high time for our “Mai Baap Govt” to understand one basic truth, you can sale dreams under the names like TDR or Paid FSI, but you can’t make people to live by just dreams! Dreams are converted in to reality only by realistic policies or else all what remains is politics (read politicians), which we are never short of!

Sanjay Deshpande 

Sanjeevani Dev.

Please view my sharing about real estate in Pune at U-Tube link below..

https://youtu.be/g3lx1Nq7pBs

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http://visonoflife.blogspot.in/2017/06/conveyance-unique-get-together.html

http://jivnachadrushtikon.blogspot.in/

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http://www.flickr.com/photos/65629150@N06/sets/72157627904681345/

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