TDR, Real Estate, Government & the City!

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“Action is the proof of understanding.” … Tamsen Webster

Tamsen Webster has spent the last twenty years helping experts drive action from their ideas. Part message strategist, part storyteller, part English-to-English translator, her work focuses on how to find and build the stories partners, investors, clients, and customers will tell themselves-and others! Wow, no wonder, with that kind of profile she can pin down the concept of development or say growth in just six words, that simple!  Unfortunately, when it comes to policies & that too, related with the real estate then we (read as Mai Bapp govt) forget the word or say terminology, “simplicity” because everyday something new challenge (read as hurdle) real estate has to face on policy front which directly affects the growth or development! Latest salvo rather salvos fired by govt is TDR policy & then there is our evergreen RERA which keeping all due respect with its intentions makes me wonder whether it’s to make life of people related with real estate easy or more miserable! I know, speaking anything against RERA (that too by a builder) is an offense which many will say should meet by death penalty (thankfully there isn’t such provision) yet it’s not what I am saying or what any law says but it’s the facts of the industry that governs the markets or say life!

Ok, coming to the first aspect around which entire real estate economics moves & that’s been a pivotal point for last few decades & obviously govt is going to mess up with its fullest & no wonder now it has come up with a circular (policy) by which any TDR can be used anywhere. It means TDR of city area can be used in merged villages of the city i.e., new city limit. First & foremost I have never understood this joke of old city & new city thing which we (read as PMC & PCMC) are playing for long, means from the year when first batch of villages were merged in PMC (PMC is aamche Pune) limits which is in year 1999. Since then, villages around PMC limits have been merged, demerged & remerged in PMC, which means making them part of PMC. This journey of villages in to PMC is more interesting than Marriage, Divorce & Remarriage of Ben Affleck & JLO i.e. Jennifer Lopez or Richard Burton & Liz Taylor (these are Hollywood couples & those who don't get connected with this analogy, they can ignore it)! Because, first some villages are declared to be part of Pune city by one govt (read as in ruling) & then another govt removed some villages from those merged villages & later again the new govt added removed as well few more villages in to PMC limits, the game is still on as recently I read in the newspapers that two of the merged villages are opting to move out of PMC because of lack of infrastructure even after becoming part of PMC! Lol, with this even the Kothrud & Sadashiv Peths’ also can opt for getting out of PMC as infrastructure is becoming a part of concern even for the core city but that’s another aspect of sharing!

As of now let’s focus on TDR, which is like “Sim, Sim” word for the real estate in the city! I won’t waste much words in explaining TDR as by now even a small school going kid knows it yet TDR is notional index which relates FSI or say allowable buildable area which you can add on any land & which you get in lieu of reservation land you surrender to the local body i.e., PMC/PCMC. I wish this has been that simple but unfortunately for various reasons (most of them are wrong reasons only) the day TDR term came into existence like a cursed character in Marvel movies, it was & is, always has been in news for the chaos it has created. And nothing wrong with the concept of TDR as that is proven way to get reservation lands for the civic bodies in cheapest & fastest possible option, wrong is the way policies made by the govt (read as all the system) regarding consumption of this TDR!

When started, the TDR was supposed to be created & consumed in the respective zones which were A, B & C zones depending upon location of your land under reservation & the land on which it is to be consumed. That itself was a mistake as in A zone which was the central part of the city, TDR was available but no land to develop. So later it’s been allowed to be used in any zone of any zone’s TDR but related to ready reckoner value of land under reservation vs land where this TDR is to be used or say loaded, (one more chaos policy). Then in addition to the mess, the govt created one more type of TDR naming it as Slum TDR, meaning TDR generated by developing slums in the city. Obliviously now it’s like two siblings to look after in one family, so again more chaos to give justice to both the TDRs’ that first slum TDR will be used & then regular TDR can be uses, it’s like applying reservation policy in the use of TDR (again sorry, just showing analogy, I neither support nor oppose reservation policy)! Result was, the TDR policy which created more confusion & unrest in the real estate fraternity as well the landlords, because even in the home, when you try to make both the siblings happy, at a time then usually you end up making them unhappy along with yourself, same thing happened with slum TDR & normal TDR!

And if all this was not enough the govt introduced paid FSI along with TOD (whatever it meant) or say additional FSI for Metro corridor; this was like adopting one more (rather two) child when you already have twins in the home. And needless to say, to accommodate these two new kids (read as make them too happy) the govt made more policies which only added to chaos in real estate as well TDR consumption. As seeing the growth in real estate govt wanted to have more of this cake for itself (what else) & to generate revenue came up as paid FSI in the city (PMC/ PCMC) while this policy was not applicable for PMRDA (one more joke) & to promote Metro there has been additional FSI for the land coming around Metro track (I have lost counting joke number). This was a direct threat to the rates of TDR & Slum TDR as after all TDR is nothing but a bitcoin of real estate & outcome was a downfall in the rates of normal TDR. So, the govt again came-up with one more policy for TDR consumption setting up guidelines for use of TDR, TOD as well Paid FSI in the vein of trying to make all three kids happy while TOD kid is still in dilemma as it’s like an orphan & even today nobody is sure about what should be policy about use of TOD! At the same time govt now issued an order allowing the use of TDR in old city limits on the lands in the new city (merged villages, remember?) so that there will be takers for the TDR but again related it to ready reckoner rates. It’s like you can fly on the surface of the moon with your body weight where gravity is seven time lesser than that on the earth (sorry tried a different analogy), what it means is 100 sft of TDR from old city, say Deccan will be some 1000 sft if you use it in Fursungi or Kirkitwadi! Again, here govt has forgotten the fifth child i.e., reservation land’s TDR in the merged villages, where you will use it, in Rajasthan or Bihar, is the question I would like to put forward here! And on top of it there are parallel jokes like in PCMC there is no slum TDR available or in making so how you are going to use that portion; nobody has any answers for all these questions because to get a right answer first the question has to be right!

Now, one will ask what all this has to do with real estate & rate of the homes, right? Well, the answer is TDR aspect is like land cost itself for the developer because if the landlords know what’s potential of his land (that they know perfectly now a days) but at what rate you have to buy this TDR & what will be the consumption number, if the developer doesn’t know this then how he will buy the land in the first place? And if the developer is a fool (most of them are) to play blind & buy the land then what will be the future of such a project where you don’t know the cost of the raw material of the product itself, is the govt interested in answering this question?

Actually, the solution is very simple, why you bound TDR with so many policies, just open it & & let it be free, all you do is frame the rules related to height as well margins & let anybody use any amount or type of TDR & charge it on the % basis of the figure of the TDR consumed just the way GST is, and use the funds generated out of this TDR GST for whatever purpose the govt wants to use, but govt doesn’t wants simpler solutions is the main problem! This is the crux of the entire TDR aspect of real estate at present. On top of all this, one aspect about which everyone is silent (conveniently) & that is, what are we going to do with so much TDR & buildings, what about infrastructure to accommodate this much construction (read as homes) as well environment conservation around us?

It’s like everybody wants benefits of the TDR just the way with the seniors in the family which wants all of their siblings must get good marks in the exam, has to be well behaved, should be best in sports as well peruse extracurricular activities in the school but no member of the family is ready to spend their time for helping the kids to achieve this, same is the story with of the govt & TDR & we expect ease of doing business in the real estate along with affordable homes for all; amen!

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Sanjay Deshpande 

Sanjeevani Dev.

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

 

https://www.youtube.com/watch?v=g4xX7eopH5o&t=5s

 

Please do visit my blog links below to read about real estate & home buying! 

https://visonoflife.blogspot.com/2021/09/choosing-right-home.html

http://jivnachadrushtikon.blogspot.com/2021/09/blog-post_21.html

Creating Togetherness; team Sanjeevani Way (Click link below) 

https://www.flickr.com/photos/65629150@N06/albums/72157627904681345

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