CMDA pushes to reduce housing prices in Chennai

To make affordable housing a reality in Chennai and its outskirts, the Chennai Metropolitan Development Authority (CMDA) has come up with a unique plan calling all those holding land parcels as large as 50 acres and above for a joint development with hosts of benefits such as single window clearance, additional FSI in build-up area and infrastructure and other facilities around the vicinity.

All these years, private developers in Chennai have been showing least interest towards developing affordable houses as there were no attractive incentives available for them from government’s side. Generally, low-income housing projects are launched at far off places from central business district of a city due to low land cost. More so, these flats are normally built in a range of 400 to 500 sq ft and mostly belong to one BHK, So, builders in general don’t prefer LIG and MIG projects due to low profit margin. The CMDA’s move would encourage developers to venture into low cost housing projects along the periphery of Chennai.

According to informed sources in CMDA, under the scheme, those who have 50 acres and above can make a representation for a joint housing development. The CMDA will undertake the exercise of conceiving, site planning, infrastructure development etc. In short, the building authority will clear all necessary approvals in one shot for landowners, who can then convert the land into a marketable property without any hassle. One of the most important advantages is that if the landowners wish to develop the remaining area, they will get 50 per cent more Floor Space Index (FSI) in built-up area, which can be sold at the market price.

Another significant advantage is that the CMDA will absorb the expenses for approval fee and infrastructure by way of acquiring the required land portion equivalent to the guideline value of the land. The rest of the portion can be built and marketed by the landowners. So, the express approval process and support for project implementation are the great advantages for the developers/landowners.

The offer by CMDA did not restrict a single landowner having huge land parcel, but for an assorted people who individually owns small units. These people can jointly declare their land measuring 50 acre and above by for such development making a single entity among themselves as power of attorney.

The latest move by the CMDA has been widely welcomed by developers and realty experts in Chennai as it provides minimal procedures in approvals, transparency, confidence and above all involving authorities for land development. This will also increase the affordable housing stocks in Chennai and hence reduce the cost of housing across the board, feel Mahendran, Managing director of Sai Developers Private Limited.

According to an official with CREDAI-Chennai, the move would encourage landowners in suburban and peripheral areas to participate in the process of boosting affordable housing across the state.

A latest report by global real estate consultancy firm Cushman & Wakefield said that Chennai would be witnessing a demand-supply gap for affordable residential units over the next three years. The overall estimated supply would be around 1.59 lakh units while the demand has been pegged at 2.58 lakh units, showing a steep gap of 60 per cent.