Increase in FAR by DDA is boon for every one
Delhi Development Authority’s demand to increase the floor area ratio (FAR) in the national capital. This increase—from 150% to 200%—is for residential plots that are 750 sq. mt or more in size. For plots bigger than 1,000 sq. mt, the FAR has gone up to 200% from 120% and the ground coverage has been increased from 40% to 50%. These steps will result in higher saleable area, which may lead to increase in price of houses. The impact of this change will, however, be felt only in a few localities of Delhi that have plots in these sizes.
FAR is also known as floor space index and denotes how much area you can construct on a plot size (according to development plans and zoning laws of individual states). It is the ratio of total floor area in the building and the total plot area. The constructed area would include basic structure, walls, staircase or lobby space, among others. FAR is calculated using a formula: total covered area of all floors divided by the plot area. Say, the plot size is 1,000 sq. mt. and the permissible FAR, according to development plans, is 120%. This means the builder is allowed to construct a building of 1,200 sq. mt. on this plot. So, if the builder plans to construct a building of 2-3 storeys, total covered area of all the floors should not go beyond 1,200 sq. mt. In Delhi, with the new FAR rules, on a 1,000-sq. mt. plot, one can construct a building of 2,000 sq. mt. One must note that FAR rules will differ across places and plot sizes.
What is the impact? It will make apartments bigger, and with no change in density norms, ticket sizes could rise, said Anuj Puri, chairman and country head, JLL India. Impact of higher FAR in Delhi will primarily be seen in areas of South Delhi and parts of Central Delhi, as localities here—such as Jor Bagh, Chankayapuri, Greater Kailash-II, Anand Lok, Panchsheel Park, Vasant Vihar—have plot sizes bigger than 750 sq. mt.
“The decision to increase the ground coverage and FAR will have a relatively greater impact on prime residential neighbourhoods than on mid-market localities,” said Anshuman Magazine, chairman and managing director, CBRE South Asia.
As of now, the increase will result only in more space utilization, and houses may get bigger. Real help would come if the number of dwellings that can be built on the plot goes up as this would increase supply and may bring down prices. At present, the height restrictions on individual residential plots is 17.5 mt along with stilt parking provisions. If the average height of each floor is 3-4 mt, then a building can have only about four floors.
“If used judiciously, this provision, in conjunction with the increased FAR, can be utilized to increase the housing stock of residential plots,” said Puri. Only then will more houses be created and prices reduced, he added.
“Areas affected negatively by the recent hike in circle rates may actually see their land prices increase closer to the revised circle rates as buyers will be able to construct more efficiently,” said Shveta Jain, executive director-residential services-India, Cushman and Wakefield.
The impact on group housing will be different. Apartments built under group housing on plots of 750 sq. mt. and more can have more dwellings on the same size of plot.
“Group housing plots where ground coverage was previously 33.3%, will now be 50%. This will allow for bigger apartments to be built, though FAR here was already 200% under the master plan,” Puri said. Group housing in areas with no height restrictions could benefit more.
The move will also give a boost to what are called ‘builder floors’ and to collaboration between individual plot owners and builders. Increased FAR will result in more saleable area for builders, who often tie up with land owners, with the two sharing equity. Generally, in such agreements, the builder puts in the money for development while the land owner contributes land. Higher FAR means bigger construction size, and thus more attractive deals for land owners.