Re-developers remove deal sweeteners from the re-devlopment deals after government revised jantri rates.
The redevelopment of old housing societies, has hit a roadblock, after the state government revised the jantri rates which are almost double now.
Many of the developers were offering bigger houses, along with the gift money, before the jantri rates revised. Now, they are revising the proposal as their input cost has increased significantly. Some of the developers are reducing the gift money and also may compromise on the size of new houses.
The primary factors, according to developers, are the increases in input costs for purchasing floor space index (FSI) and Transferable Development Rights (TDR) following the jantri amendment.
“We are doing redevelopment projects for Gujarat Housing Board (GHB) schemes,” said Ajay Shridhar of A Shridhar Group. While there are no modifications to the projects we started before the jantri modification, we may minimise certain benefits, such as a 50% drop in gift money.”
He went on to say, “The paid-up FSI and TDR cost has more than doubled due to revised jantri.” This has cut our profit by about 15%. Because the margins in redevelopment projects are so low, it will hurt both developers and flat owners.” However, there are also concerns that are inhibiting some developers from undertaking the rehabilitation of private societies, such as the approval of members, monetary rewards such as gift money and rentals to the owners until their properties are completed, to mention a few.
The Ahmedabad Apartment Owners Association (AAOA) has also written to the Gujarat government requesting that the stamp duty on refurbished homes be removed. “Many societies in Ahmedabad are facing cancellations, either by developers or by societies,” stated AAOA Chairman Mani Patel. If the Gujarat government eliminates the stamp duty on such societies, it will be a huge comfort for the two sides.”
The association additionally requests the state government to replicate the Maharashtra government’s rehabilitation approach in Gujarat. “We have already made multiple representations before the government about the redevelopment issues,” CREDAI Ahmedabad President Tejas Joshi stated. Stamp duty on rebuilt residences moving to the same owners must be removed.”
“Moreover, most societies undergoing redevelopment are in Residential-1 zones, where jantri rates are extremely high,” he noted. As a result, paid FSI should be cut to 20% rather than 30% from the previous rate of 40%. This will stimulate the redevelopment market while maintaining housing prices stable.”