Introduction: Floor Space Index (FSI) plays a pivotal role in urban planning and real estate development. It determines the buildable potential of a plot of land and regulates the density of construction. Understanding FSI is crucial for developers, town planning authorities, and property buyers alike.
1. What is floor space index (“FSI”)?
FSI implies the buildable potential of a plot of land[1]. It refers to the maximum permissible floor area that a developer can develop/construct on a specific piece of land relative to its size. It is a crucial parameter used in urban planning and zoning regulations which helps to regulate urban development. The FSI allowed has to factor in maintaining a ratio between open space and built up space and the capacity of the civic infrastructure to ensure sustained and planned development.
In the case of Municipal Corporation of Greater Mumbai and Others v. Kohinoor CTNL Infrastructure Company Private Limited and Another[2], the Supreme Court of India held as follows.
“10. …The concept of Floor Space Index (FSI) implies the buildable potential of a plot of land. The FSI to be allowed must take into consideration the availability of civic infrastructure including open spaces, transport facilities, requirements for protection against fire, and water supply and sewerage as well as electricity. An increase in FSI is likely to result into an increase in the density of population. FSI has an important bearing on the quality of urban life. A relaxation of FSI norms or, as the case may be, an enhancement of FSI by urban planners cannot be removed from the issue of adequacy, or as the case may be, inadequacy of civic services.
11. The requirement of keeping open spaces at the ground level should be read in this context. The recreational area and greens in the multi-storeyed buildings have to be scrupulously safeguarded. The problem with the existing municipal and town planning statutes is that they factor only two out of the three compelling needs. The first need is that of increasing housing stock – which is undeniable. The second need is that of keeping recreational areas for residents. The third entirely different and equally, if not more compelling, is the need to assess the sustainable capacity of the city and to balance the development with this capacity. The principle of sustainable development which has been construed by this Court as an integral part of Article 21 of the Constitution deserves to be applied to town and urban planning throughout the country. This requires a thorough assessment of the environmentally sustainable capacity of every city/urban area. The preparation of master plan/own planning schemes has to be made keeping in view the issue of sustainable capacity of the particular city/urban area.”
2. How is FSI computed?
There are certain portions of the gross floor area of the building and gross area of the plot that are to be excluded from FSI computation. Thereafter, FSI is computed by dividing the net floor area of the building to the net area of the plot.
The Unified Development Control and Promotion Regulations for Maharashtra (“UDCPR-2020”) sets out in detail the manner of computation of FSI and which portions of the floor area of the building and plot are to be included/excluded from FSI computation.
3. Who determines the FSI of a plot of land?
The FSI is determined by the local town planning authority. It is determined keeping in mind the location of the land, use of the land and nature of development to be undertaken thereon.
4. What is basic FSI and premium FSI?
UDCPR-2020 defines basic FSI and premium FSI as follows.
“Basic FSI – means floor Space Index permissible without levy of premium or loading of TDR on any parcel of land as per the provisions of these regulations.”
“Premium FSI – means the FSI that may be available on payment of premium as may be prescribed under these regulations.”
These concepts become important because in certain developable zones, permissible basic FSI, additional FSI on payment of premium and permissible TDR (Transferable Development Rights) loading maybe permitted, increasing the buildable potential of the land.
5. As a homebuyer or property purchaser, why is it important to understand FSI?
Understanding FSI is important to ensure compliance with regulations and making an informed decision about the purchase of a property. FSI inter-alia affects the number of floors that can be constructed. If floors are constructed in excess of the permitted floors, such additional floors would be illegal and consequently, occupying such floors would also be illegal.
6. How is TDR linked to FSI?
TDR is defined in the Maharashtra Regional Town Planning Act, 1966 as follows.
“development right” means right to carry out development or to develop the land or building or both and shall include the transferable development right in the form of right to utilise the Floor Space Index of land utilisable either on the remainder of the land partially reserved for a public purpose or elsewhere, as the final Development Control Regulations in this behalf provide;
In the case of Janhit Manch Through its President Bhagvanji Raiyani and Another v. State of Maharashtra and Others[3], the Supreme Court of India held as follows.
“2. Mumbai is perceived to be a city that fulfils the dreams of many. The movement of population has thus been manifold, putting a strain on civil services and open area, including on playgrounds and streets. There has been vast encroachment on public lands by people who have migrated, or otherwise, and who could not find reasonable accommodation for their residence. There has been growth of slum areas, thereby blocking access to public land. The density of construction was therefore required to be upscaled to meet the pressing needs of the population. One methodology to address the issue, devised by the State, was that of awarding development rights, as defined in Section 2(9-A) of the Maharashtra Regional and Town Planning Act, 1966 (hereinafter referred to as “the said Act”), which provides as follows: …..
A transferable development right (hereinafter referred to as “TDR”) is therefore a voluntary, incentive-based programme allowing landowners to sell development rights from their land to a developer, or to other interested parties, who can then use these rights to increase the density of development at another designated location.
3. In order to understand this concept, we would like to further elucidate that the object is to give compensation in a different way, to private landowners who have transferred a portion of their land to the Government as and when the Government has required such private land to build or expand public utilities like grounds, gardens, bus stands, roads, etc. The alternate mode of compensation, instead of payment of money is TDR, which is nothing but a development potential, in terms of increased floor space index (hereinafter referred to as “FSI”) awarded in lieu of the area of land given, conferred in the form of a Development Rights Certificate (hereinafter referred to as “DRC”), by the Government. Such TDR or DRC is negotiable and can be transferred for consideration, leaving it open for the owner of the acquired land to either use the TDR for himself or to sell it in the open market.
4. The other concept which would have to be dealt with in the context of the present dispute is that of floor area ratio (hereinafter referred to as “FAR”), which is the ratio of a building’s total floor area (gross floor area) to the total area of the plot. The concept of FAR can be utilized in the zoning process, to limit urban density. It may be noted that often FAR and FSI are used as interchangeable terminologies and what is taken into account is the carrying capacity/infrastructure and amenities of an area, which would, in turn, have a direct impact on public health, safety and the right to life of the occupants of the area. Illustratively, if a plot of land measures 1000 sq. m and the permissible FSI is 1, then about 1000 sq. m is permissible to be built on that plot of land.
5. Now, turning to the problem referred to aforesaid, of the expanding slums, the Government of Maharashtra has launched a comprehensive slum rehabilitation scheme by introducing an innovative concept of using land as a resource and allowing FSI as incentive, in the form of tenements for sale in the open market, for cross-subsidisation of the slum rehabilitation tenements, which are to be provided free of cost to the slum-dwellers. …”
Conclusion: In the realm of real estate, Floor Space Index (FSI) serves as a crucial parameter governing urban development. Its computation, implications, and link to development rights like TDR influence the landscape of construction and property transactions. Whether you’re a developer, town planner, or property buyer, understanding FSI is indispensable for navigating the complexities of urban development and ensuring compliance with regulatory frameworks.
Notes
[1] Municipal Corporation of Greater Mumbai and Others v. Kohinoor CTNL Infrastructure Company Private Limited and Another (2014) 4 SCC 574
[2] Ibid
[3] (2019) 2 SCC 505
Author Bio
