Harsh Patodia, president,Credai-Bengal
KOLKATA: Prominent developers in Kolkata believe the state government's deep mistrust about the real estate sector has been assuaged by a realization that a section of the industry had evolved into corporate houses that shunned unscrupulous dealings that characterized the sector in the past.
"There are visible signs of change in the government's perception of the real estate sector. The most significant development was finance minister Amit Mitra announcing an urban policy that tries to boost the sector that is a force-multiplier and leads to large employment," said Harsh Patodia, president of the Bengal chapter of Confederation of Real Estate Developers' Association of India (Credai-Bengal), an umbrella organization of builders.
Patodia was referring to substantive changes in redevelopment rules for old and tenanted houses that Mitra proposed recently. These included sops by way of enhanced construction rights on such plots. Credai-Bengal members like vice-president Sushil Mohta and former president Pradeep Sureka are convinced that such a policy announcement would not have been possible had chief minister Mamata Banerjee continued to harbour the misgivings that she had about the sector when she came to power.
"The CM's attitude towards the sector has changed. That there were several developers in the business contingent to Singapore reflects her realization that Credai is a responsible organization. True, there have been occasions in the past when the industry was not organized and did not behave transparently or ethically. But tremendous changes have happened in the past decade. Even smaller developers who have not changed their ways thus far will be forced to mend their ways soon to survive," said Sureka.
Credai members term the change in attitude to the understanding that housing stock is important to keep pace with urbanization. "There is a realization that housing stock, particularly for the low and middle-income group, is a lot lower than demand. There is also an understanding that development of the sector can spread wealth," said Mohta.
He believes sections of Kolkata — particularly the older north — will change visibly in the next five years following the government initiative to redevelop old and tenanted properties. At present, much of north Kolkata wears a moribund look with ill-maintained, crumbling properties locked in inheritance or tenancy-related litigation.
Though small and medium builders aren't as enthused about the proposal until enabling changes are made in KMC's building rules, prominent builders feel the government's new-found zeal after the Singapore trip to transform Kolkata into a modern 21st Century city will see measures being taken to address such issues.
To take advantage of the government proposal to offer 100% increase in floor area ratio (FAR) in buildings that are over 50 years old and partly or fully occupied by tenants, the current norms on height and mandatory open space require revision.
"Kolkata needs redevelopment. The government proposals offer a window of opportunity for those who own tenanted properties. There will be amalgamation of plots to enable larger developments. In five years, I expect significant changes in how the city looks," Merlin director Sushil Mohta said on the sidelines of Home Front 2014, an exposition of new projects from the real estate sector.
Patodia felt the changes were much-needed to alter the perception about Kolkata and enthuse fresh live into the city. "Today perception is reality. The moment perception changes, so will other things," he said.
While redevelopments along the Metro corridor in north Kolkata will be more lucrative, houses in the interior streets can also hop on the bandwagon if KMC makes some of the laws more flexible. On concerns over the city losing its character as landmark buildings in localities are pulled down to create unimpressive high-rises, Mohta pointed out that the most significant buildings were already protected as they were on the KMC heritage list.
"For others that are architecturally significant, individuals or corporates should step forward to adopt and renovate them and bring them into reuse so that they add to the locality's vibrancy than just decay," he reasoned.
The most significant change is, however, expected on the township front. With Mitra stating that purchase of agricultural land will be allowed for township projects, developers expect a spurt in activity in the suburbs. "We have to look at the fine print when the notification happens but from what we have heard so far, the government will encourage townships. From Credai, we will look for simplification of sanctions so that multiple clearances required in municipal and panchayat areas are reduced," said Patodia.