Self Redevelopment of Housing Societies in Mumbai
Self redevelopment of housing societies is a option many societies are considering today.
What is Self Redevelopment?
Self redevelopment is redevelopment of a housing society by the members of the society instead of a builder (developer).
Why is it done?
If a builder does the redevelopment, then he or she will take most of the benefits for himself, leaving less for the members. A builder will divide the construction into two parts:
Self redevelopment ensures that the fruits of the redevelopment go to the members rather than the developer.
- sale apartments for sale to new buyers
- rehab apartments for the old society members
Self redevelopment ensures that the fruits of the redevelopment go to the members rather than the developer.
Advantages of Self Redevelopment
The advantages can by any, or a combination of the following:
- more space per flat for existing society members
- better views and apartment layouts for existing society members
- more monetary compensation for existing society members
Disadvantages of Self Redevelopment
As follows:
- the society has to take the responsibility for the entire process
- the society has to work with banks to finance the construction
- disagreements between members can derail the entire process
When should Redevelopment be done?
It makes practical and financial sense to undertake redevelopment mainly when there is a gap between the actual FSI consumed in a society and the allowable FSI under current regulations. For example, for many societies built in the 1980s (and earlier) were built with an FSI of 1 or 1.33. Under 2019 regulations, many of those are allowed an FSI of approximately 2.7 under the fungible FSI system. Therefore there is additional FSI available.
The additional FSI allows the person doing the redevelopment to both construct more area as well as sell apartments to new buyers, which will finance the costs of the construction. Hence existing members will get a brand new building with more space per flat at no extra cost. They may also receive payments depending on how the proposal is worked out.
The additional FSI allows the person doing the redevelopment to both construct more area as well as sell apartments to new buyers, which will finance the costs of the construction. Hence existing members will get a brand new building with more space per flat at no extra cost. They may also receive payments depending on how the proposal is worked out.
How is it done?
The broad steps in redevelopment are as follows:
1. The society appoints an agency to prepare a Project Feasibility Study
2. This is presented to members for their thoughts and reactions
3. After following due process, the society appoints an agency to manage the redevelopment project for them
4. The agency draws up designs and plans
5. The society works with banks to finance the project
6. The agency applies for permissions to redevelop
7. Society members move to rental apartments during the redevelopment process
8. Construction starts once permissions are in place
9. Once construction finishes, apartments are sold
10. That money is used to pay back the banks the loan amount
11. The extra money from sale can be distributed amongst the members
12. If required a corpus can be set up for future maintenance of the building
1. The society appoints an agency to prepare a Project Feasibility Study
2. This is presented to members for their thoughts and reactions
3. After following due process, the society appoints an agency to manage the redevelopment project for them
4. The agency draws up designs and plans
5. The society works with banks to finance the project
6. The agency applies for permissions to redevelop
7. Society members move to rental apartments during the redevelopment process
8. Construction starts once permissions are in place
9. Once construction finishes, apartments are sold
10. That money is used to pay back the banks the loan amount
11. The extra money from sale can be distributed amongst the members
12. If required a corpus can be set up for future maintenance of the building
What is Hybrid Redevelopment?
Hybrid redevelopment is an interesting concept in which the society does the redevelopment in partnership with the developer. It has the advantages of self redevelopment without some of the disadvantages. To find out more about this, speak with a principal architect at SDM Architects.
