Sachin Agarwal, CMD – Maple Shelters
Like every other form of housing, affordable homes need space in order to be built. Even more importantly, affordable housing needs to be available in locations where it is needed the most. In most cases, we see affordable housing projects coming up only in distant suburbs. This is because of there is no land for development in the central areas of our cities, or the available land is priced too high for affordable housing to make sense.
In this scenario, redevelopment of old buildings and societies makes eminent sense. Unfortunately, redevelopment is mainly used by developers to turn huge profits, rather being used as a means to increase the supply of housing.
Redevelopment – Good, Bad Or Ugly?
Several factors influence change in the way products are conceived, produced and used. We see very rapid changes taking place in the fields of engineering, consumer electronics and software development, though fashion is also a noteworthy example. Real estate is no exception, which is why we have the concept of redevelopment.
There are two primary reasons why change is necessary in almost any product vertical:
- Things wear out: Every manufactured product has an inherent shelf-life built into it. Once its age exceeds this shelf-life, it becomes unusable – and often dangerous to use
- Technological Innovation: The world is constantly finding newer and better ways of doing things. Old concepts are abandoned and new ones, based on new findings and technologies, take their place. Just as we see hundreds of software packages across the world becoming obsolete and newer ones replacing them, technological advancements in the construction industry leave no space for older things in real estate.
Buildings and societies in India are constantly being redeveloped – both to mitigate the safety hazards of buildings that have reached or exceeded their ‘expiry dates’, and to make way for more modern buildings that use available space in a better way, have better electrical fittings and plumbing, are safer, offer newer features and are also friendlier to the environment.
While real estate developers, agencies and consumers are largely in favour of redevelopment, there are always elements that oppose it. In India, these include slumlords that benefit from things remaining the way they are, and building occupants paying negligible rents (locked in decades ago) who would lose this benefit if their building were redeveloped.
However, the consensus remains that redevelopment of old buildings is necessary and beneficial.
Benefits Of Redevelopment
Redevelopment of old buildings is not merely about technological advancements or better lifestyles – when buildings age, they become febrile and unsafe. The cement and reinforcing metal bars used in buildings are all subject to degradation over time, causing structures to become increasingly unstable. As disturbing news stories remind of with fair regularity, old buildings can and do collapse in India. Redeveloping buildings after they have stood for a certain span of time is not only an option – it is a life-saving necessity.
Redevelopment of old buildings is not only a means of giving structures a new lease of life, but also results in more homes becoming available in a location where supply is constricted by non-availability of developable plots. Moreover, the homes that result are larger, safer and more comfortable than those which were available in the building prior to redevelopment. Also, importantly, redevelopment of an old building actually utilizes fewer resources than developing a new building.
Buildings which have been redeveloped are safer than they were to begin with not only because of renewed structural soundness, but also because modern safety features can be introduced where they did not exist before. For instance, many old buildings in cities like Pune and Mumbai were constructed with now obsolete construction technologies – or by unscrupulous developers who cut costs at every corner. These flaws or shortcomings in a building can be rectified during the redevelopment process with the inclusion of CCTV cameras, fire alarms, access for fire-fighting vehicles within the project, and firefighting hoses on all floors.
From a real estate market perspective, redeveloping or re-engineering an old building significantly increases its value on the market. Unfortunately, this is often the only objective for Indian developers to undertake redevelopment projects in the first place.
Redevelopment must be done in the right way and for the right reasons. Developers undertaking such projects should do so not only to make a profit but also with the intention of deliver more housing. Only then does redevelopment fulfill its larger purpose.
Anywhere in the world we look today, redevelopment of buildings properties is making real estate more viable, enlarging and improving neighbourhoods and raising the quality and safety of lives. In a large country like India, where homes are a constant need and very little land options are left in the centres of cities where most people throng to find employment, redevelopment plays a very important role indeed.
We have seen some outstanding examples of developers taking up the redevelopment challenge for the right reasons. However, the concept must now spread onto a larger canvas and become a nation-wide mass movement, enabled by proactive incentives from the new government to ensure that this tool is used for the greater good of our cities, and not merely for value exploitation.