Wednesday, 16 April 2014

How can FAR Spur the Development of Housing Units?

FAR must be known word to Home Buyers and Real Estate Investors. If you are unaware – let’s have some insight of this jargon and its impact on residential housing.

FAR implies floor area ratio describing how much area could be build up over the plot available. Let’s suppose if FAR is 2 that mean if a person owns a 100 sq. m.  plot, then the total built-up area, across all the permissible floors, can only be 200 sq. m. Now, if the FAR is increased, the total built-up area on the same plot will also increase proportionally; thus it will increase the total built-up area which would translate into more residential units (in the case of builders and developers) and more rooms or floors (in the case of individual owners) on the same plot. 

Increased FAR in Delhi will spur the development of more housing units and cater to the increasing demand of the people of the NCR within the capital itself. DDA is planning to increase the floor area ratio (FAR) for residential as well as commercial property in Delhi. At present, the FAR of residential property is only 2.

However, the revised FAR for Delhi is not yet finalized. Balvinder Kumar, vice-chairman of DDA, says: If the proposed increase in FAR is approved, it will lead to an increase in the number of new apartments and a drop in prices. This will also be the first step in having a taller skyline in Delhi, much like the top metro cities of the world. Other development authorities like Noida and Greater Noida authorities and GDA (Ghaziabad Development Authority) have increased the existing FAR (floor area ratio) up to 30%. Authorities like the Yamuna Industrial Development Authority (YEA) and Huda (Haryana Urban Development Authority) are likely to follow the policy in the near future.

With land going in short supply in major NCR cities like Delhi, Gurgaon, and Noida and the demand for housing rising by the day, the increase in FAR is a welcome step. The enhanced FAR will have multiple benefits for end users, prospective buyers, and developers. As builders and developers have extra cost burden due to land-acquisition issues and increased cost of construction material, this policy will benefit all the stakeholders in the housing sector, especially in Noida and Greater Noida West (Noida Extension) in the NCR.

During the review of Master Plan-2021, Delhi, DDA already enhanced the FAR by 50% for social infrastructure and commercial establishments like hospitals, community recreational clubs, higher educational institutes, service apartments, and hotels. Now, DDA is planning to enhance the FAR under redevelopment plan to allow more space for housing. The Noida and Greater Noida authorities recently raised the FAR from 2.75 to 3.50.This will yield more houses per unit floor area in the fast developing sectors of Noida, Greater Noida Expressway, and Greater Noida West.

Rama Raman, chairman and CEO of Greater Noida Industrial Development Authority (GNIDA),says: We decided to revise the FAR, as this will help developers build more housing units on the same plots. The revised FAR will be applicable to the entire Noida and Greater Noida area, excluding the Yamuna Zone, where the extra 25% FAR has not been implemented yet.

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