The move, according to medium and small developers, will solely benefit the top 25 firms and make freestanding single-building projects unprofitable.

According to developers, cluster redevelopment maximizes land utilization by evicting older, low-rise structures and replacing them with higher, more nimble constructions.
The reconstruction of aging structures in the city is anticipated to benefit from the Maharashtra government’s announcement on May 30 of a 50% premium waiver payable by real estate developers for its cluster development program in Mumbai for a duration of one year.

Even though developers have praised the move, several mid-, and small-sized developers have said that it will mainly benefit the top 25 largest developers in Mumbai who have the financial resources to invest in rehabilitation projects like cluster development.

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What does that mean, though, for a city like Mumbai, which is renowned for its upward migration?

The leading organization for developers in Mumbai, the Confederation of Real Estate Developers’ Associations of India (CREDAI)-Maharashtra Chamber of Housing Industry (MCHI), has the following to say about the announcement.

Open spaces and recreation areas:

Cluster redevelopment plans frequently ask for the building of parks, open spaces, and recreation areas. As a result, more green space is being developed in the city’s most crowded regions, giving locals more places to relax, exercise, and engage in social activities.

Effective land use:

Cluster redevelopment makes the best use of available space by erecting higher, more streamlined structures in place of older, low-rise ones. As a result, more houses can be built without taking up additional land or greenery. The stress on urban infrastructure is lessened as a result.

Structural stability and safety:

Residents of Mumbai who live in old structures run the risk of serious structural problems. Such structures are demolished as part of cluster redevelopment in order to make way for sturdy, earthquake-resistant buildings. The residents’ safety is ensured by the new buildings’ adherence to contemporary safety norms and laws.

Improved infrastructure includes broader roads, better drainage and water supply systems, better sewage facilities, and improved electrical networks. The improved infrastructure generally benefits the neighborhood as well as the rebuilt buildings.

The developers’ group applauds the action

“We support the government’s move to waive 50% of the premium for Mumbai cluster development. This significant choice has a huge potential to improve the standard of living for people who currently live in tenements. It prioritizes safety while also guaranteeing the availability of sufficient parking facilities, which is an important component of urban planning. Additionally, the act prohibits the establishment of freestanding structures without adequate infrastructure, according to Dominic Romell, President of CREDAI-MCHI.

Unfairness for independent projects?

The declaration of a premium waiver just for cluster construction, according to a Mumbai developer who wished to remain unnamed, is unfair to standalone development or redevelopment projects, they claim. He noted that the cluster development activity already has several waivers.

“In my opinion, the Mumbai real estate market already benefits from greater floor space index (FSI) and other relaxations due to cluster growth. This 50% premium waiver will now be an addition. As a result, the market will become more competitive and isolated single-building projects will become unprofitable. This declaration can not only change the tariffs but also current projects that are being approved, the speaker continued.