NASHIK: The local municipality has mandated developers to utilize premium floor space index (FSI) and transfer of development rights (TDR) in an equal 50:50 ratio for all construction projects under the 2020 Development Control and Promotion Regulations. This initiative aims to revitalize the declining demand for TDR while ensuring fair compensation for landowners. The directive was issued by municipal commissioner Manisha Khatri.
The move comes in response to a drop in TDR rates in recent years, leading to disappointment among landowners and hindering the acquisition of land designated for public amenities in the city’s development blueprint. Under the TDR system, landowners relinquish their land to the municipality in exchange for TDR as compensation. However, with developers increasingly favoring premium FSI over TDR, there has been a significant decline in TDR demand and its market value.
This trend has discouraged landowners, particularly farmers, from contributing land needed for civic projects in exchange for TDR, prompting them to prefer cash compensation instead.
Nashik’s basic permissible FSI stands at 1.10, but additional FSI can be obtained through premium FSI and TDR, contingent on road width and project category. Builders have largely transitioned to utilizing only premium FSI due to its predictable cost structure and availability, adversely impacting the TDR market and complicating land acquisition for over 400 pending reservations held by the Nashik Municipal Corporation (NMC).
Under the newly established guidelines, developers are required to allocate half of the additional FSI through premium FSI and the other half through TDR. According to NMC officials, this equal allocation is expected to significantly boost TDR demand, stabilize its rates, and incentivize landowners to surrender their land in exchange for TDR.
Nashik’s Development Plan, ratified in 2017, includes 540 reservations for public utilities like parks, playgrounds, hospitals, roads, and other infrastructure. Of these, 425 reservations remain unacquired, presenting a financial challenge.
In accordance with the 2013 land acquisition law, NMC is obligated to compensate landowners at double the market value, an expense projected to surpass Rs 5,000 crore, exceeding the financial capacity of the civic body.
By reinforcing TDR usage alongside premium FSI, NMC aims to alleviate its financial burden while ensuring the prompt execution of Development Plan-related projects. Officials believe the revised regulations foster a healthier and more equitable development ecosystem that benefits civic planning, landowners, and the real estate sector alike.
