Freedom is a luxury and it means different things to different set of people. The stakeholders within the built environment of the Indian real estate too have their own set of definition when it comes to what defines their freedom. While for a home buyer, freedom is to have a rent-free house of one’s own at an affordable price, for the developers the quest has been freedom from multiple bottlenecks – single window clearance, industry status, easy funding and, most importantly, FSI free developments. Track2Realty investigates whether ‘Freedom From FSI’ would be boon or bane.
The balance between what is an equitable freedom for both the developers as well as the home buyers rests at just one point – freedom from FSI. What it means is that while the builders can make the maximum use of land parcels available without constraints of FSI limits, for the home buyers it amounts to cheaper housing in and around the city centers.
For a layman, FSI stands for Floor Space Index which is also referred to as FAR that is Floor Area Ratio. FSI is the permissible development norm by different government agencies and the local municipalities and it is calculated as per the total floor area of every floor as well as the total area of the plot of land. It can then be calculated by the total floor area of all floors of the building and/or plot area.
In India every city has its own FSI norms ranging from 1.5 to 3.75, with Hyderabad being the only city in the country with unlimited FSI. Urban planners hence point out how there are immense pressure on the civic infrastructure, with congestion, concrete jungles and no proper drainage systems in the old South Indian city.
The question is whether the freedom from FSI would actually revolutionize the housing market and create surplus housing? Opinion differs across the globe and there is a raging debate whether or not the urban housing should be concentrated in and around the CBDs with liberal FSI norms and put pressure on the infrastructure. Or else, the policies should be aimed at sprawling horizontal growth of the city that would cost more resources to develop the beyond city limits.
In India, experts differ on the Hyderabad model of freedom from FSI since India’s urban housing has anyways been prone to creating a concrete urban jungle. Moreover, experts even point out that despite being a FSI free city, Hyderabad property prices have grown faster than Bengaluru or Chennai; thus demolishing the argument that freedom from FSI would lead to supply of more affordable housing in the urban pockets of the country. The demand for housing in Hyderabad has also been tilted towards the IT corridor of Gachibowli area.
There are many questions that the urban planners in the country need to delve deeper to find an answer:
Q. Is freedom from FSI a good or bad idea for real estate developments?
Q. Has there been any learning from an FSI free city like Hyderabad?
Q. What is the ideal FSI & density norm for city development?
Stakeholders differ
Ashish Narain Agarwal, Founder & CEO, Property Pistol, doesn’t seem to agree when he asserts that freedom from Floor Space Index (FSI) may not augur well for the Indian real estate. FSI is a key component of the real estate sector as it determines a fixed number of houses built in a planned manner to manage costs, the plot’s capacity to hold the property, etc. Not implementing FSI to a property may hamper the fabric of the city in the long run.
“An already space-starved Mumbai city will face issues like the burden of basic infrastructure, lack of green and open spaces. A lack of FSI may result in unplanned, haywire urban planning and construction that can hamper the safety of the project, increase variable costs and may create infrastructure challenges for a city. FSI is a very pertinent factor in the real estate sector to help in the creation of a well-planned, developed city. Hyderabad implemented a free FSI to encourage the growth of the real estate sector in the city, however it is important to focus on the challenges this can bring to the city,” says Agarwal.
Aditya Kushwaha, CEO and Director Axis Ecorp, on the other hand, believes that the concept of freedom from FSI is a good idea, but policymakers need to ensure a stronger regulation and a well-defined timeline that projects need to follow. It has been observed that some projects are deliberately delayed expecting a new FSI opportunity from the government. The regulations need to be transparent, and we must move towards freedom from FSI.
“At the same time, the Town & Planning Department of each city where FSI opportunity is being given needs to play a proactive role in deciding the parameters which result in timely delivery of projects and avoiding undue pressure on civic infrastructure. The Master Plan for the city drives the FSI & density norms for city development. Factors like land availability and proposed targets are considered to plan for the civic infrastructure required along with FSI regulations. No standard one-size-fits-all FSI & density norm can be applied to various cities and areas,” says Kushwaha.
Any ideal benchmark
The ideal FSI cannot be determined because it differs from region to region. An ideal FSI should be decided by keeping in mind the composed growth, sufficient infrastructure facilities, open spaces, and green covers. Density norms cover several aspects like economic, social, physical, environmental, and built structures among others in town planning of a particular region.
Hyderabad’s commercial development, including IT Parks, data centres and commercial spaces, was built with a high FSI ratio. As a result, the increased locations that were created resulted in a massive inflow of people occupying these spaces. It ended up putting increased pressure on the existing civil infrastructure of the city like roads, sewerage and electricity. The key learning from the development of Hyderabad has been that the government needs to ensure that civic infrastructure is prepared to handle the increased traffic with freedom from FSI.
The property prices and demand & supply of housing in any given city is not dependent on the supply, or affordable supply, alone. Rather, it has a critical linkage with the economic activity in the given city and the job market. It is hence argued that freedom from FSI would lead to more chaos and haphazard growth of the urban centers of India than creating affordable housing for the masses.
Ravi Sinha
#RaviTrack2Media
Track2Realty is an independent media group managed by a consortium of journalists. Starting as the first e-newspaper in the Indian real estate sector in 2011, the group has today evolved as a think-tank on the sector with specialized research reports and rating & ranking. We are editorially independent and free from commercial bias and/or influenced by investors or shareholders. Our editorial team has no clash of interest in practicing high quality journalism that is free, frank & fearless.
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