CSMC to devise new strategy to boost TDR

Lokmat News Network

Chhatrapati Sambhajinagar:

In recent years, the demand for Transferable Development Rights (TDR) has significantly declined, leading to a drop in market value. To address this, the Chhatrapati Sambhajinagar Municipal Corporation (CSMC) has introduced a new strategy aimed at increasing the usage, and hence the value, of TDR.

The Municipal Corporation administrator G Sreekanth said,” All builders and general citizens undertaking construction on 30-meter-wide roads will now have to rely on TDR after utilising the standard 1.1 Floor Space Index (FSI). The option to use premium FSI will be largely discontinued.”

This policy change is expected to quadruple the demand for TDR in the market. Currently, TDR is priced at around 30 per cent of its original value, but this could rise to 60 pc in the near future, said Sreekanth.

Background and current situation

Over the past 15 years, the Municipal Corporation has issued a large volume of TDR based on the older development plan. Builders purchased these TDRs at high rates. In many cases, middlemen and agents profited more than the original landowners.

With the Unified Development Control and Promotion Regulations (UDCPR) implemented in 2020 by the state government, Chhatrapati Sambhajinagar was assigned a base FSI of 1.1. Builders seeking to construct taller buildings were allowed to pay a premium instead of using TDR, leading to reduced TDR demand and falling prices.

In response, the municipal commissioner made it mandatory last year for builders to use 40 pc TDR in their projects. This move helped keep the TDR market alive. Now, the administration is planning to make it 100 pc mandatory, and rule-making in that direction is underway.

Landowners will be compensated

The municipal administrator mentioned, “After 33 years, the city's new development plan has finally been approved and is now being implemented. Roads are being widened, starting with 60-meter roads, followed by 45-meter and 30-meter roads. Land acquisition will be required for this, and landowners must be compensated—either with cash, if the funds are available, or with TDR.” “Therefore, to make TDR compensation viable, its market value needs to rise. We are drafting a new policy to ensure TDR rates go up,” said Sreekanth, adding, “In the future, TDR rates will likely soar.”