A study of Ghodbunder residential property boom

By the hillside, Ghodbunder road was once a forest land. A few years ago, the view was breathtaking as the rainwater stream passes through the hills, charming many nature lovers. A closer view of the hill, less traffic movement, and tranquility drew many residents to Ghodbunder road area.

From a farmland to a residential area, over the years, the locality has bloomed into a beautiful colony with tastefully built houses, residential towers, swanky malls and multiplexes, air conditioned schools and colleges and, of course, ample stretches of greenery.

Except a row of buildings that line the 80-ft. road, most lanes in the colony have a sloping terrain.

12 years back the cost of a 500 sq ft residential flat was just Rs.5 lakh here. Today, the price of a one BHK is above Rs.45 lakh.

“We never thought that the land value would shoot up so much over the years. The place gained popularity when former municipal commissioner T Chandrashekhar developed the infrastructure along the road. He was instrumental in getting the layout approved. A few years ago; the view was breathtaking as the rainwater stream passes through the hills, charming many nature lovers.

“It was like a dream come true for us to stay close to nature and enjoy the scenic beauty of hills along with the watercourse. However, due to the land reclamation by the builders, the stream has eventually disappeared,” says Rajaram Patil, who has been residing in Brahmand colony for the last 16 years.

The TMC is taking care of the colony’s maintenance and people have no complaints as far as water supply and streetlights are concerned. “For a person like me, the locality is most preferred as I don’t have to commute much to procure any kind of stuff outside. But for those who have to move around frequently, the scenario is different, as they have to navigate through the steep lanes says G. Padma, one of the residents.

Ghodbunder road residential area which now falls in Thane municipal limits is attracting hordes of people from in and around Mumbai since decades due to its calm and serene locales. People love to buy residential spaces here as the locality is self-contained and lacks nothing.

Faced with depleting revenues due to the economic slowdown and rising inflation, industrial units around Mumbai, Thane, Pimpri Chinchwad are diversifying into the real estate business to develop additional sources of income.

Many companies are converting their land holdings from industrial to residential purposes. For example, so far the Pimpri Chinchwad Municipal Corporation has converted 5.32 lakh square metres of land from industrial to residential use and residential buildings have been constructed on these sites.

A few decades ago, when industrial development was being promoted in Thane and Navi Mumbai, the government had acquired land from local farmers and handed it over to the industries. With changing economic conditions, many industries shifted their production units out of Thane, Mulund, Bhandup, leaving many plots vacant. Taking advantage of the real estate boom, many industrialists have started converting their plots from industrial to residential. So far 30 companies have applied for the conversion.

Sandeep Belsare, secretary of the Pimpri Chinchwad Small Industries Association, said that although all necessary facilities are available in the city for industries, production costs have remained high compared to other places. Hence, all big manufacturers have shifted their bases elsewhere in the State or outside the State.

On account of the shifting of the big companies, small industries are not getting enough work, which is hurting their revenues. Moreover, rising real estate prices present a lucrative option for companies to change the purpose of their vacant plots from industrial to residential. Most industrial units are moving their facilities away from residential areas due to stringent safety norms and space constraints in such areas, said Anant Sardeshmukh, Director General, Mahratta Chamber of Commerce Industries and Agriculture (MCCIA).

Expect residential properties in Mumbai-Thane to come within your reach soon! The Maharashtra Housing and Area Development Authority (MHADA) has chalked out a comprehensive joint venture plan with private land owners as well as real estate developers in Mumbai and the rest of Maharashtra to make more land available for construction of affordable homes for people.

With a view to bring residential property prices down, MHADA has announced the scheme of joint venture with private property developers. The move is expected to create an affordable housing stock in Mumbai and Thane urban conglomerate where the residential property rates have touched sky-high.

As a special concession to the house building authority, the Maharashtra government has announced that the MHADA will get 2.5Floor Space Index (FSI). As per the technical definition, the ‘affordable houses’ are those having an area admeasuring 27.88sq.mtr carpet area for Economically Weaker Section (EWS), upto 45sq.mtr carpet area for Lower Income Group(LIG) and upto 80 sq.mtr carpet area for Middle Income Group(MIG).

Joint Venture Scheme:

Based on the above Developmental Control Rule (DCR), MHADA’s scheme of joint venture with private participation is expected to yield desired results. If land owners or developers who have a minimum of 2000 sq.mtr. plot area and who agree to  transfer their land in the name of the MHADA, the housing body will get higher FSI in respect of schemes in Mumbai, Thane, Kalyan-Dombivali, Bhivandi-Nijampur, Pune, Solapur, Kholhapur, Nashik, Malegaon, Dhule, Jalgaon, Ahmadnagar, Aurangabad, Nanded and Nagpur Municipal jurisdiction. The move is clearly intended to create affordable housing stock in these metro cities of Maharashtra.

As per the formulation of this scheme, a fifty-fifty formula will be worked out between MHADA & developer to avail the 2.5FSI of the additional FSI over the existing zonal FSI.

Accordingly, the developer will hand over this FSI to MHADA in a built up form for which the latter will pay cost of construction to developer based on District Schedule of Rate (DSR) towards construction cost or the developer will have the option to carve out the proportional land of MHADA share to enable the government housing agency to ensure implementation of this scheme. In return, the developer will be eligible to use balance additional 50% FSI for his scheme. Thus, total FSI to developer would include zonal FSI plus50% additional FSI.

Soon MHADA will sign a memorandum of understanding with the private property owners in Mumbai and Thane for such joint development, said sources adding that this measure will free up a lot of space for development of real estate in Mumbai’s eastern as well as western suburbs.