Vertical Growth Proposed for Indian Cities to Combat High Realty Prices and Fund Infrastructure Development
The skyline of India's urban centers could be poised for a transformation as the government explores the possibility of allowing increased vertical development. This initiative aims to address escalating real estate costs and generate the necessary resources to enhance urban infrastructure to accommodate future growth.
Recommendations of the Planning Commission
A Planning Commission steering committee, in its draft report, has put forth the recommendation of granting additional Floor Space Index (FSI) as development rights. FSI represents the ratio of a building's total floor area to the size of the land it occupies. However, the committee emphasized that this additional FSI should not be provided without charge. The panel specified that fees for additional FSI and land-use conversions should be determined professionally and should be no less than half of the circle rate applicable to the specific area.
Rationale Behind the Proposal
The steering group on urbanization within the Planning Commission underscored that the revenue generated from granting additional FSI should be specifically allocated, or "ring-fenced," to finance infrastructure projects designed to support the higher FSI. An official from the urban development ministry commented, "If adopted, these measures could lead to a considerable rise in housing stock and contribute to more moderate property prices."
The report characterized the current density regulations in Indian cities as outdated, highlighting the fact that FSI levels in India are among the lowest globally. It argued that densification should be a core component of a balanced strategy aimed at expanding the effective supply of prime urban land, thereby enabling funding for enhancements to urban infrastructure.
Incentives for Densification Strategies
The committee proposed that the central government should institute incentives that encourage states and municipalities to embrace densification as a key element of future urban development plans. It acknowledged that many cities already impose various charges for additional FSI in some fashion. As examples, the committee noted that Hyderabad enforces a city-level impact fee specifically targeting tall buildings, while Ahmedabad has implemented a system of selling a limited amount of extra FSI.
Further Recommendations for Affordable Housing
The committee further advocated for coupling increased FSI allowance with provisions such as land plot amalgamation to enhance housing affordability. It recommended a transition from the prevalent practice of uniform FSI citywide to a more nuanced, granular FSI approach, supporting a diverse mix of land uses. As an official of the ministry explained, "Densification coupled with mixed land use as a planning strategy must be pursued by the authorities to meet future urbanization needs."