The Hindu : Tamil Nadu / Chennai News : ‘Increasing FSI will not control property prices’

Online edition of India's National Newspaper
Thursday, Jul 26, 2007
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Tamil Nadu

Tamil Nadu - Chennai

‘Increasing FSI will not control property prices’

Staff Reporter

Chennai: Increasing the Floor Space Index (FSI) in Chennai will not control property prices, C.H. Gopinatha Rao, former national president, Institution of Valuers, said here on Wednesday.

Delivering the R. Thillainayagam endowment lecture at a meeting of the Institution of Highway Transport, he said that buildings should be constructed in proportion to the infrastructure development possible. Property developers might be ready to pay the impact fee for infrastructure improvement but the cost would only be passed on to the buyer, he said.

FSI is the ratio of the total built-up area to the plot area. Increase of the FSI would typically translate into more number of dwelling units on a plot. At present, the FSI for construction of most buildings is 1.5 in the city.

Exceptions are made in the case of IT buildings and in the case of multi-storied buildings.

During the interactive session after the lecture, a few engineers said that increasing the supply of houses by increasing FSI would mean a reduction in demand and costs. However, Mr. Rao termed the theory idealistic and said that private players would always look for profit.

“Controlling the density of buildings is controlling the density of population. As far as infrastructure is concerned, it is possible to provide drinking water and even strengthen the sewerage system but road space cannot be increased,” he said.

Licensing of real estate agents could control the escalating land prices, Mr. Rao suggested. These intermediaries make huge profits, sometimes as much as Rs. 1 crore per transaction. The agents should be registered with the government and file returns every quarter. A training programme in real estate and a licence renewal system should be mandatory. Karnataka had taken a progressive step in this regard, he said.

Mr. Rao also called for an effective public transport system with interconnected bus and rail services to pave the way for property development along the routes and to ease urban congestion.

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