Transfer of development rights or TDR is a certificate provided by the Government when someone gives the rights to government for building new projects on their plot or land. Instead of giving cash the government issues a certificate which the individual can use to build a new property on another plot or they can even sell the TDR.
In Mumbai’s real estate sector, slum TDR is an important construction incentives offered to the developers who build home free of cost for slum dwellers under the slum rehabilitation scheme, Mumbai has seen huge decline in TDR over the past 20 years.
Every builder in Mumbai utilizes slum TDR to build over and above the permissible floor space index.
The data for this year shows only 71,472 sq. m. of slum TDR was generated from slum rehabilitation scheme, compared to over 2 lakh sq. m. in year 2015 and 97,155 sq. m. in 2017. The highest was 10 lakh sq. m. which was generated in 2004 when the slum redevelopment projects started.
The lowest TDR this year is recorded due to the stagnant property market in Mumbai and also due to the delay in new development control rules by the state government.
NBFCs have also stopped funding developers for the purchase of TDR.
“The overall economic scenario is bad, and it has affected the market. Projects are becoming improbable due to the cost of high taxes, premiums and upfront payments” said Nayan shah a Mumbai based builder. He also blamed delay in building approvals, environmental clearances and NOCs.
It’s clearly visible that many builders are facing liquidity crunch. Sales are few while there is a high inventory and not many are buying slum TDR.
Builders have reaped a bounty since the state introduced slum TDR back in 1997. They have gone on a construction spree with suburbs like Andheri & Borivali facing the burnt, over 8 crore sq. ft. of alum TDR has been used to build towers and redevelop housing societies over the 20 years in Mumbai.
More than half of this TDR has been used to construct huge buildings in Bandra-Andheri. The government recently allowed it to be used in the island city, raising concerns among many people that this could lead to further densification in congested areas.
However, housing experts have said that TDR only allowed builders to build luxury apartments on slum land under the grab of slum clearance.
