How the property development schemes will become self-financing
20,000 dwelling units of 250 sq ft built up areas with enhanced Floor Space Index (FSI) is to be reconstructed every year according to a recent housing development plan. The number of dwelling units to be re-constructed per year should be more than double the present number of old tenements per building. All ground floor tenements must be for shops and the first floor for offices and the remaining for residential purpose.
Such an arrangement is likely to create built up spaces for all categories of people. However, these will be costly Ground floor plus 3 stories (G + 3) or Ground floor plus 4 storey (G + 4) structures. Fifty percent of these dwelling units are to be sold at market rates while the rest of the 50 percent area is to be cross-subsidized up to 75 percent for the old tenements.
Thus the sale proceeds will amount to higher revenues through he sale of the 10,000 dwelling units of 250 sq ft of built up area, even though the actual selling price may be Rs.15 lakh per unit, which is likely to be heavily cross-subsidized up to more than 75 percent. For old tenements, the remaining cost may be charged at Rs.1000 per sq ft. For slum dwellers, the built up spaces will be made available Rs.25,000 per unit in the urban fringes and this also will be arranged a long term loan at low rate of interest.
For developing Properties Kerala government has been experimenting with a host of development schemes, even though many of them met with a premature demise due to a lack of vision on the part of the officials that drew up such schemes. But the interesting aspect is that the Kerala State Housing Board and other agencies have now learned a better lesson and that too the hard way. Being professional is the only way out to stay afloat in the hot highly competitive real estate market.