Developers speak Affordable will then become manageable

Developers in Delhi and NCR are quite ready to provide affordable housing to the aam janta – but on certain conditions. They demand that the government relax FSI and density norms to make homes more affordable. Once the density norms are relaxed they will be able to build more units in a specified area, and thus bring down costs, they say .

“For developers, an area is defined, population in an area is fixed, built-up area is also fixed. There isn’t much left after this and if we divide the area of a project keeping in mind the FSI and density norms then the average area of an apartment comes out to be about 1600-2000 sq ft. The minimum cost of a house then comes out to be Rs 25 lakh-Rs 30 lakh. With pressure on developers to build affordable houses, they have reduced the size of apartments. To maintain the average density of population in an area the developers are coming up with mix and match projects, where affordable small houses are mixed with bigger houses. If density norms are relaxed then obviously the developers will be able to come up with more affordable houses,” says Rajeev Rai, Vice President (Corporate) Assotech Limited.

“We will request the government to relax the density norms, so that all the private developers are able to provide affordable housing units,” says Amit Raj Jain, Vice President (Marketing) BPTP Limited. “The immediate need is to have more people in limit ed land and simultaneously bring down the prices. This can happen only when we will have relaxed FSI and density norms,” says Sunil Jindal, MD, SVP Group.

Normally FAR (Floor Area Ratio) has been in the range of 1.50 to 2.00, but is now being increased to 2.75 in most of the urban centers. Lower FAR implies higher horizontal growth, which is quite expensive in terms of fuel consumption and high urban infrastructure costs. Going vertical with high FAR would reduce per capita cost on development of infrastructure. CBDs of major Asian cities have FARs ranging from 5.00 to 15.00.

On the other hand, the dwelling unit density norm has been in the range of 100 to 250 persons per hectare, which should at least be 500 persons per hectare for any urban area. “Lower DU density implies construction of large-sized apartments with high cost of acquisition. Higher density will support the cause of affordable housing with reduced size of dwelling units (1 unit = 5 persons),” says Rai.

There are developers who feel that planners are apprehensive of increasing the density because they have to provide better infrastructure for the increased population in an area. “The Government should start working on improving the infrastructure in the new areas such as Sonepat, new Gurgaon, Ghaziabad etc. and then increase the density. It needs immediate course of action,” says Abdul Barim, Senior VP (marketing and sales), Uppal Group. He, however, feels this is not the only solution. “The Government should also increase the cap of low home loan interest rates to cover loans of up to Rs 30 lakh, and also should encourage people who are interested in a second home loan,” he adds.

Navin Raheja, MD, Raheja Developers Pvt. Ltd., feels that the price of an apartment is decided by four factors: Cost of land, cost of construction, profit margin and cost of money. “If we want to decrease the price of apartment we have to look at these factors. As cost of land cannot be reduced, the only solution left is to increase the FAR and relax density norms,” he says.

“I have been suggesting to the governments of states where I have my projects and also to the Urban Development Ministry about the need to relax the density norm. If FSI and density norms are relaxed then we might achieve reduction in prices of up to 20 per cent. Planners are apprehensive but even then people are living in slums with minimal infrastructure. So by relaxing the density norms the government will help the developers come up with more affordable houses in that space. If today we have 50 houses per acre, the need is to have 200 houses per ¦ acre,” he adds. source. HT- 17-01-2009