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FAR- A Major Concern for Real Estate India
Floor Area Ratio (FAR) has always been a matter of concern in the real estate sector, its one of the major determinant of a country’s development. But unfortunately FAR in India is low and is considered a hurdle to construction activities. While the real estate sector has been demanding an increase in FAR, the major point of worry is the fact that whether an increase makes sense without improving the overall infrastructure in the country.
FAR essentially means the limit that is imposed on the amount of construction in a certain plot of land or location. The parameters differ from state to state and are governed by the respective city development authorities.
According to Anuj Puri, chairman and country head, Jones Lang La Salle Meghraj (JLLM), “FAR restrictions are necessary in heritage zones featuring monuments, and wherever higher FAR would destroy the urban fabric of a particular area. “This has been the primary area of contention. Lower FAR implies higher horizontal growth, which is positive in terms of environmental sustainability but negative in terms of available supply.”
Bangalore-based real estate consultancy firm Asipac Projects chairman Amit Bagaria feels that horizontal development definitely has its disadvantages. “The world realised over 50 years ago that horizontal development is expensive. Horizontal development has its negatives — infrastructure is collapsing, fuel consumption too is growing leaps and bounds,” he asserts.
Most of the experts believe that several advantages can accrue to the sector if FAR is increased. But what about the infrastructural bottlenecks that act as a major hurdle? “Typically, doubling the FAR shall reduce the per capita cost on development infrastructure; however this is not a direct proportion relation. In India, our infrastructure is yet to cater to current requirement and hence doubling FAR instantly would put an additional strain on infrastructure,” says Sanjay Dutt, deputy managing director, India, Cushman & Wakefield.
It’s a Catch 22 situation. What is the solution out of this unending cycle? Experts suggest identifying select areas that have the capacity to accommodate a higher FAR. “There are a lot of areas where land is not being utilised and is lying vacant. These can be optimally utilised. Ideally, infrastructure should be allowed to develop first whereas developers feel that a zone or centers of excellence can be created within which, the FAR can be increased.
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