Hindustani78
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Updated: April 5, 2015 09:29 IST
Reservations in apartments: middle class will suffer most, say builders - The Hindu
Representatives of the Builders’ Association of India and CREDAI feel that the new law is impractical in its present form. File photo
The government’s new rule mandating reserving floor space in apartment complexs for Economically Weaker Section (EWS) families has drawn the ire of builders in the city, who fear it would burden the salaried middle class the most.
For they would have to bear the cost of cross-subsidy and pay more in a market where the unit cost per flat was already perceived to be high.
The new rule mandates that in any group housing project or apartments where the gross floor area is of and above 1,000 square metre, not less than 15 per cent of the gross floor area shall be earmarked for persons belonging to the EWS and Low Income Group and the reservation for both put together shall not be less than 15per cent of the gross floor area. However, all residential buildings with plot area below 1,000 square metre are exempted from such reservation of carpet area for EWS group.
Representatives of the Builders’ Association of India (BAI) and the Confederation of Real Estate Developers Association of India (CREDAI) told The Hindu that the new law was impractical in its present form.
Jagadish Babu, founder of Sankalp Group, chairman-elect of CREDAI, told The Hindu that land value in Mysuru was very high and the Floor Area Ratio (FAR) – the ratio of built area to the total land area – was low. As a result, the cost of projects in Mysuru was also high.
Cross-subsidation
“Units can be reserved only through cross-subsidisation and one class of end-users will have to be charged more. But the salaried class – who are increasingly turning to apartments due to steep increase in land cost – cannot bear the additional burden. So the solution is to amend the law and introduce reservation for large housing schemes, spread over say five acres or more, and also increase FAR,” said Mr. Babu.
Ravindra Bhat, State chairman of BAI, endorsed his views and said increase in FAR could help add more units to a project to help reduce the cost per unit. But with the high land value and low FAR in Mysuru, implementing the law will be difficult, said Mr. Bhat.
Though the law states that the reserved space would be exempted from the floor area calculates, which means the developer can add units proportionate to the reserved area, builders say this is insufficient to neutralise the cost of cross-subsidy.
The FAR in Mysuru compared to other tier 2 and 3 cities was low and hovered around 1.25 to 1.75 for regular buildings, while it varied from 1.5 to 2.25 for high-rise apartments.
There are also issues related to monthly maintenance fee, security fee and separate fee for common facilities like gym, club house, etc., which the law is silent on, said builders.
Reservations in apartments: middle class will suffer most, say builders - The Hindu
Representatives of the Builders’ Association of India and CREDAI feel that the new law is impractical in its present form. File photo
The government’s new rule mandating reserving floor space in apartment complexs for Economically Weaker Section (EWS) families has drawn the ire of builders in the city, who fear it would burden the salaried middle class the most.
For they would have to bear the cost of cross-subsidy and pay more in a market where the unit cost per flat was already perceived to be high.
The new rule mandates that in any group housing project or apartments where the gross floor area is of and above 1,000 square metre, not less than 15 per cent of the gross floor area shall be earmarked for persons belonging to the EWS and Low Income Group and the reservation for both put together shall not be less than 15per cent of the gross floor area. However, all residential buildings with plot area below 1,000 square metre are exempted from such reservation of carpet area for EWS group.
Representatives of the Builders’ Association of India (BAI) and the Confederation of Real Estate Developers Association of India (CREDAI) told The Hindu that the new law was impractical in its present form.
Jagadish Babu, founder of Sankalp Group, chairman-elect of CREDAI, told The Hindu that land value in Mysuru was very high and the Floor Area Ratio (FAR) – the ratio of built area to the total land area – was low. As a result, the cost of projects in Mysuru was also high.
Cross-subsidation
“Units can be reserved only through cross-subsidisation and one class of end-users will have to be charged more. But the salaried class – who are increasingly turning to apartments due to steep increase in land cost – cannot bear the additional burden. So the solution is to amend the law and introduce reservation for large housing schemes, spread over say five acres or more, and also increase FAR,” said Mr. Babu.
Ravindra Bhat, State chairman of BAI, endorsed his views and said increase in FAR could help add more units to a project to help reduce the cost per unit. But with the high land value and low FAR in Mysuru, implementing the law will be difficult, said Mr. Bhat.
Though the law states that the reserved space would be exempted from the floor area calculates, which means the developer can add units proportionate to the reserved area, builders say this is insufficient to neutralise the cost of cross-subsidy.
The FAR in Mysuru compared to other tier 2 and 3 cities was low and hovered around 1.25 to 1.75 for regular buildings, while it varied from 1.5 to 2.25 for high-rise apartments.
There are also issues related to monthly maintenance fee, security fee and separate fee for common facilities like gym, club house, etc., which the law is silent on, said builders.
And the irony is I don't even stay there!! Jeeez! 
........ and since they were used to living with limited water supply, they were jealous that now everybody was getting continuous water supply, so they used to lock up the water supply and impose an artificial water shortage in the apartment 
