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Tag Archives | TDR

Making housing viable in tier II cities

Tier II cities need to prepare for the impending housing needs to avoid repeating the failures of present megacities. 

In the recent announcement of the 20 cities chosen for the launch of the Smart Cities Mission, it was interesting to see tier II cities like Surat, Jabalpur and Bhubaneswar in the list. With the mega-cities being in midst of complex issues and planning failures, tier II cities are a ray of hope for a planned urban future. One of the primary requirements for any upcoming city is to provide shelter to its current citizens and prepare for the population that would migrate eventually.

Cities create platforms for a large number of people to live in close proximity. This increases the benefits offered by the interpersonal interactions and serendipitous meetings. The proximity and other benefits offered by the city increases the demand for housing within the city. This increase in demand raises real estate prices and makes living in a city expensive. The tier II cities like Jabalpur etc will face this rise in price if the supply in the market is unable to cover for the demand. To avoid this imbalance between demand and supply, it is vital that the planning authorities consider four major remedies: create and maintain land records, keep a high Floor Space Index (FSI), maintain easy and simple building code, and appropriately regulate Transferable Development Rights (TDR)s.

The first vital step to solve the housing problem is creating a set of land records. The identification of the land ownership within the regions will allow the municipal authorities to plan the development of the city better. It will also help guide the growth of real estate in the region. Basic step in this direction can be to ensure that all the land owned in the city is registered. The municipality should also use new technological tools such as Geographic Information System (GIS) to map the cities in a detailed manner.

The second fix is to increase the Floor Space Index (FSI). FSI is the built up ratio permissible on a piece of land. For instance, if the FSI is 4 and the plot of land is 10,000 sq.ft, the built up area would be 40,000 sq.ft. The FSI thereby decides the skyline of the city. A higher FSI artificially creates more living space in the city which helps balance the supply with the demand for housing.

The FSI limitation is set with respect to the burden that the infrastructural resources in the immediate neighbourhood can bear. Hence for the tier II cities, it is also important that resources like roads, sewage etc is planned in such a manner that it can bear the burden that comes along with high FSI. For instance, the greenfield development can be made keeping in mind the population that will be brought into the region due to higher FSI. For the already built up region, the resources can be expanded to accommodate for the growing needs. In return, the land owners can be provided with Transferable Development Rights (TDR)s if any property loss is incurred.

TDRs are the third piece in the solution. TDR refers to the amount of built up area that a land owner can use or transfer to any other agent for an agreed sum of money. TDRs can be used as an instrument to plan and modify the housing pattern in the cities. For instance, most of the cities have a restriction regarding the regions in which the TDRs can be issued. This is based on the same principle as the FSI, whereby, the restrictions on TDRs is based on the neighbouring resources. In a tier II city, the municipality can use the TDRs to further its plans.

An additional fix can be to create simple and easy building codes such that they are painless to understand and allow building development in the most efficient manner possible. The regional development authorities can set the codes such that they are comprehensive and rigorous enough to include the basic safety measures required. In addition to this the hassle of getting the permissions if reduced will also help increase compliance.

With the attention and resources that the tier II cities are receiving from the Smart Cities Mission, there can be no better time than now for the tier II cities to prepare for the inevitable growth.

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The sky is the limit

Our cities need skyscrapers to gain benefits from higher density, and to reduce the space crunch in the Central Business Districts. 

Besides making cities more affordable and architecturally interesting, tall buildings are greener than sprawl, and they foster social capital and creativity.”-Edward Glaeser

Central Business Districts (CBD) have always been heavily dense locations as I had mentioned in my previous article. This high density within CBDs helps the citizens reap the benefits of proximity between people and businesses. The proximity between work and residences, serendipitous meetings, and a wide range of options for work and leisure are just few of the reasons why cities attract so many people. However, the space crunch in the city forces people to live farther away from these hubs creating sprawls that extend to far ends.

Sprawls are not the opposite of urban density [1] as it does not reduce the accessibility to the public spaces. However it lacks the essential benefits of a city like easy networking, economies of scale created with business and customers being in close proximity etc. Sprawls also increase the economic cost as citizens have to spend most of their time travelling to the CBD. To add to it, large distances and inefficient public transport infrastructure increases the use of private vehicles that cause congestion and pollution.

One of the ways to reduce the sprawl can be by building skyscrapers in the city. In order to avoid horizontal growth over the land, a good option will be to grow vertically. With the advent of technologies like lifts, decrease in the price of steel, and architects like Daniel Burnham and John Root, cities started having taller buildings by the 19th century. These proto – skyscrapers set the trend for the coming century where the heights were explored with the advancement in the field of architecture.

In this race toward the sky, India was left behind due to its restrictive policies, specially the low Floor Space Index (FSI). FSI refers to the ratio between the number floors that can be built and the size of the land on which the buildings are made. The FSI in Mumbai is 1.33 as oppose to 15 in New York and 13 in Shanghai. Hence, where builders in New York can build 15 floors for 1 sq. km. of land, in Mumbai they can only build one floor with the same amount of land. The ways to measure FSI ranges amongst Indian metros as Delhi measures it in percentages, and Bangalore calculates based on the size of the plot and the road width. Irrespective of whichever method used, India cities are far from being able to expand vertically like other metros. Therefore, unable to move vertically, the builders in Indian cities are forced to expand horizontal leading to sprawls.

In order to cover for their policies restricting the right to build, various city authorities allowed builders to use Transferable Development Rights (TDRs). TDRs are transferable documents that allow builders to transfer the building rights not used by them to another property or sell to a willing buyer. In most of the cities, keeping in mind the infrastructural restraint, the TDRs are allowed to be used in specific regions. For instance in Mumbai, TDRs are allowed only in the north of the original building or in the outskirts of the city. It is because of the TDRs that Mumbai skyline is unequally distributed with a large patch of slums interrupted with tall buildings. Unlike Mumbai, the other Indian cities do not suffer from natural scarcity of land and have instead expanded horizontally in all directions. These expansions are concentric in nature so as to maintain equidistant from the centre to the ends. Even then the sprawls lead to longer travel time and increase the carbon footprint within the cities.

The biggest disadvantage of a low FSI is that it leads to high prices in the land near the CBD. The artifice scarcity of land created by restricting FSI increases the demand for the land near CBD more than the supply. Thereby, these regions become unaffordable and creates incentives for the citizens to crowd out. For instance, the restrictive FSI in Bangalore has led to the development of various business districts across the city. Owing to the crowded central regions, the businesses have moved to other places with higher human resource pools and lower land rates. For example the areas like Koramangala and HSR layout, once parts of the outskirts, have become the magnets for new business and migrants coming into the city.

That said, the argument supporting the low FSI has been that the city infrastructure will not be able to take the pressure of the large number of residents. This argument holds a strong ground in context to Indian cities which lack basic infrastructure like roads, transport etc. The way out, however, is not by restricting people from living closer to the CBD. Primarily because cities grow organically and restricting this growth only creates haphazard expansions in the form of informal housing and narrow streets. Therefore, any city administration should account for the population growth in the coming years and create policies that can help the cities to grow along with the rising population- like increasing the FSI.

India’s urban population is expected to reach 600 million by 2031 as per a UN backed report. With an increasing number of people shifting to the cities in pursuit of better opportunities, it is important to create provisions for affordable housing. It is the absence of such provisions that gives rise to slums and unhygienic living conditions which inevitably affects the general cleanliness and health of the city. By increasing FSI in Indian cities the policy makers will be able to reduce the demand and supply gap existent in the housing sector and thereby reduce the land prices. This will not only help increase the density within CBDs but also help provide affordable housing.

Its easy to see that the skyscrapers will allow cities to accommodate large number of people and explore the heights of the skyline. As Glaeser has mentioned in his book Triumph of the city, “In the most desirable cities, whether they are on Hudson river or the Indian Ocean, height os the best way to keep prices affordable and living standards high.”

Devika Kher is a policy analyst at Takshashila Institution. Her twitter handle is @DevikaKher.

[1]  Edward Glaeser, “Triumph of the city”, (Pan:Croydon) 2011

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