Unpacking the New Section 33(20)(B) Modification in DCPR 2034 for Greater Mumbai

The real estate landscape of Mumbai has always been dynamic, driven by the city’s rapid growth and ongoing infrastructural development. Among the most pressing challenges developers face is accommodating Project Affected Persons (PAPs) displaced by major projects.

In response, the Maharashtra government has today sanctioned a crucial modification to the Development Control and Promotion Regulations (DCPR) 2034—Section 33(20)(B). This change aims to streamline the development of Affordable Housing (AH) and Rehabilitation and Resettlement (R&R) tenements on private and non-government plots, providing developers with new incentives and opportunities. Here’s a deep dive into what this modification entails and how it impacts developers.

The Need for Section 33(20)(B)

With Mumbai undergoing massive infrastructure projects like metro lines, flyovers, and highway expansions, many residents in project-affected areas require relocation. However, PAPs often resist moving away from their original locations, disrupting resettlement efforts. Recognizing this issue, Section 33(20)(B) of the DCPR 2034 has been modified to incentivize developers to build PAP tenements on private or authority-owned plots, particularly within the same or adjoining wards. This ensures that displaced individuals can remain near their former homes while opening doors for developers to create profitable projects.

Key Highlights of the Modification

1. Increased FSI for Private Plots: One of the most significant aspects of this modification is the allowance for increased Floor Space Index (FSI) up to 4.0 on private or non-government plots for developing AH/R&R tenements. This offers a compelling financial incentive for developers to engage in such projects, as they can leverage the additional FSI to generate more saleable areas.

• In Island City: Developers can avail up to 3.0 FSI with a 63% saleable component and 37% PAP component.
• In Suburbs and Extended Suburbs: FSI can go up to 4.0 with a 50% saleable component and 50% PAP tenements.

2. Sale Component & Transfer of Development Rights (TDR): Developers can sell a portion of the FSI generated, making it a profitable endeavor. Additionally, TDR (Transfer of Development Rights) can be utilized in lieu of unconsumed sale FSI, allowing for flexibility in project management. Importantly, 20% of TDR will only be released after the entire AH/R&R tenement handover to the Municipal Corporation of Greater Mumbai (MCGM). This provision ensures that the focus remains on timely completion and handover of PAP housing before developers can fully capitalize on the saleable components.

3. Simplifying the Handover Process: A critical condition in this modification is that the PAP tenements must be handed over free of cost to MCGM, with the Occupation Certificate for sale portions only being issued post-handover. This ensures that the developer’s commercial interests are aligned with the timely delivery of affordable housing solutions.

4. Flexibility in Location & Plot Clubbing: Developers now have the flexibility to shift PAP tenements within a 5 km radius of the project site, either within the same or adjoining wards. This can be particularly useful for developers with multiple projects in adjacent areas. Additionally, plot clubbing is allowed, where multiple owners can combine plots and shift the sale and PAP components between them. This helps in optimizing land use and enhances the viability of large-scale projects.

5. No Premium for Fungible Areas: The modification specifies that no premium will be charged for fungible compensatory areas in PAP tenements. This is a notable financial relief for developers. However, premiums may apply to the developer’s share of saleable areas as required.

6. Relaxations for Developers: Several relaxations have been granted in the new modification:

• Parking requirements can be relaxed, based on Regulation 33(11).
• Infrastructure and open space requirements can be relaxed by up to 10%, facilitating more flexibility in project planning.

The Impact on Mumbai's Real Estate Sector

This modification represents a progressive step towards solving one of Mumbai’s critical urban challenges—rehousing PAPs without disrupting their socio-economic networks. For developers, it opens up new avenues to maximize their returns while contributing to the city’s infrastructural growth and societal needs.

The emphasis on affordable housing alongside revenue generation through saleable FSI allows developers to diversify their project portfolio. Moreover, the ability to shift PAP tenements within a reasonable radius offers flexibility, ensuring that even in densely developed areas, PAP housing can be accommodated without major disruptions.

For Mumbai, this regulatory shift could mean faster and more efficient development of infrastructure projects, as the reluctance of PAPs to relocate will be addressed with local housing solutions. At the same time, developers can better integrate AH/R&R components into their plans, without compromising on profitability.

The Road Ahead: What Developers Need to Know

As this modification comes into effect, it’s important for developers to align their future projects with these new guidelines. Some key takeaways for real estate developers include:

1. Maximizing FSI: By leveraging the increased FSI, developers can create a higher number of saleable units, enhancing profitability.
2. Timely Handover: Since a portion of TDR and sale rights depend on the timely handover of PAP tenements to MCGM, efficient project management will be critical.
3. Strategic Plot Clubbing: Developers with multiple projects in the same ward or within 5 km can benefit significantly by clubbing plots and optimizing the sale/PAP component distribution.
4. Compliance with MCGM: Strict adherence to handover requirements and timely certification from MCGM is essential for project approval and full utilization of FSI and TDR.

Take Away:

The Section 33(20)(B) modification is a win-win for both developers and the city. It balances commercial interests with the need for social housing and resettlement solutions, ensuring that Mumbai’s infrastructure projects progress smoothly. Developers willing to navigate the intricacies of this regulation will find ample opportunity to capitalize on the increased FSI and saleable areas while contributing to Mumbai’s urban regeneration.

As Mumbai moves towards becoming a global megacity, regulatory shifts like these are essential in driving equitable development and ensuring that the city’s growth benefits all its inhabitants. For developers, this is a call to action—to innovate, plan strategically, and contribute to the city’s future while maximizing returns on investment.