TDR made more attractive

TDR made more attractive
Now, Rights Are Tradable Across Zones In The City As Rules Are Relaxed
The Times of India

Bangalore: Mooted four years ago and approved 23 months back, the much talked-about Transferable Development Rights (TDR) scheme hasn’t had any takers. As a bait to attract customers, the state government has relaxed some rules which dwells on opening up of tradable rights from one zone to the other.
Simply put, the development rights certificate containing additional Floor Area Ratio (FAR) which is obtained after giving up property voluntarily for a public project can be traded anywhere in the city. Initially, it was restricted to the same zone where the property was situated.
For starters, the TDR scheme was approved in January 2005 by bringing amendments to the Karnataka Town and Country Planning Act which aimed at making land acquisition process simple.
Under this, if the owner gives up a portion of his property, instead of the compensation amount, he will get an additional floor area 1.5 times of the surrendered plot. Say for instance, a 30 ft by 40 ft plot — 1,200 sqft — of which 300 sqft has to be acquired. The owner gets 1.5 times of the surrendered plot as extra floor area — 300 X 1.5 which is 450 sqft. This additional floor area is his TDR granted to him in the form of Development Rights Certificate (DRC) which will be a legal document. He can use the additional floor area for expansion of his own building or sell it. The selling price of the TDR will be as per the market value of the property.
The FAR is the built-up area of the building divided by the plot area. Notified in the building regulations and fixed in tandem with the zone, plot dimension and road width the FAR varies from area to area. For example, if the FAR for 1,200 sqft of land in a particular zone is 1.5, the owner can construct upto 1,800 sqft (which is 1,200 multiplied by 1.5).
As per the new amendments to Section 14 B of the Karnataka Town and Country Planning Act, if development rights are traded within the same zone, then the receiving plot can get TDR upto a maximum of 0.6 times of the FAR of that plot. For instance: a 40 ft by 60 ft plot — 2,400 sqft, which has a FAR of 2 — the maximum built-up area can be 4,800 sqft. If the owner wants to buy TDR, then he can buy 0.6 times of his FAR, that is 0.6 X 2 is 1.2. Hence the maximum FAR he gets is: 1.2 added to existing FAR of 2 which is 3.2, and so he can build upto 7,680 sqft (3.2 multiplied by 2,400 sqft).
But if the development rights are traded to other zones, then the receiving plot will get 0.4 times of the existing FAR.
There’s a hitch, though: the government has not specified any quantum of TDR while inter-trading development rights between zones. Since the land value in A zone will be much higher than in B and C zones, the TDR seller would naturally want to sell the development rights to a property in A zone. This would result in congestion with the increasing FAR of the buildings. So a mechanism should have been worked out to make it more realistic for orderly development of all zones by giving proper conversion of TDR between the zones.