Indian Real Estate

Builders in the city are a worried lot these days. So much so that they have come together to float a forum and seek amendment to rules that they hold responsible for bringing construction activity to a grinding halt.

For almost six months not a new venture has been taken up and the builders cite certain provisions of GO Ms. 86 for this. With land prices going up and many ruling out individual houses, apartment flats were expected to sell like hot cakes. But the near shutdown of construction activity appears to have affected this too.

The Greater Hyderabad Builders Federation, an umbrella organisation of builders associations from different parts of the city and suburbs has approached Chief Minister Y.S.Rajasekhara Reddy and sought certain modifications to the said order. "Since the order issued in March first week, not a single application seeking building permission has been made with authorities concerned," says a representative of the federation.

`Floored'

Only projects that had pre-March permission are being completed and new ones were put on hold due to `impracticable' provisions related to mortgage, FSI in respect of buildings up to 15 metres height and occupancy certificates, they contend.

The argument put forth with regard to mortgage of a floor, whether the project is of three floors or 20 floored, was not feasible for those with fewer floors to build. "It might not matter for bigger apartments, but a developer with plans of say three or five floors is in trouble since even he has to mortgage one entire floor," says K. Venkatesh of Motinagar Builders Association.

The permitted FSI too is contested and described discriminatory in nature. "Projects on more than 1,500 sq.mts get a built-up area of about 45 sq.ft. per sq.yd., while those coming up on less than 1,500 sq.mts are allowed just 15 sq.ft., which is not justified. What can developers of small ventures build with such small built-up area?" argues Mr. Venkatesh.

FSI issues

Apprehensions are that if the permissible FSI is adhered to as per the new provisions, builders will hike the price and then pass the burden to the buyer. A builder does admit the possibility saying, "We cannot absorb the burden and it naturally has to go to the buyer. It could lead to 50 per cent to 100 per cent escalation in prices of apartment flats".

"We represented the matter to the Chief Minister and sought these minor modifications. We are expecting a positive response at the earliest," says Prabhakar Rao, Legal Advisor for the newly formed Federation.

It is not the builders alone who find themselves at crossroads due to new restrictions. Says a builder, "With the option of independent homes almost gone and apartment constructions at a standstill, it is the middle class aspiration to own a dwelling that takes a beating."

# posted by mashup @ 4:42 PM