Take Care of Your Luggage: Railways Will Not Pay for Your Negligence
Railways are the lifeline of our vast country. Apart from ever-increasing number of passengers, they provide livelihood for innumerable hawkers and vendors who cater to passengers’ needs. There are also thieves and crooks that enter the compartments unauthorised and make their living by cheating or robbing the passengers, taking advantage of their preoccupation or...
Premium Content
Monthly Digital Access

Subscribe

Already A Subscriber?
Login
Yearly Digital Access

Subscribe

Moneylife Magazine Subscriber or MAS member?
Login

Yearly Subscriber Login

Enter the mail id that you want to use & click on Go. We will send you a link to your email for verficiation
Self-Redevelopment - The Future of Mumbai Real Estate?
Redevelopment is a fact of life in any ageing, land-starved metropolitan city. In India, no city defines this dynamic quite as accurately as Mumbai.
 
The conventional norm of redevelopment in India involves appointing developers to redevelop old and dilapidated housing projects. However, several housing societies in Mumbai are now contemplating self-redevelopment instead. We can dispense with the usual metaphor 'not as easy as it sounds' - this does not sound easy by any definition, and it is not.
 
Broadly, some homeowner groups are now taking the route of appointing their own architects, contractors and project management consultants to execute the redevelopment of their projects. These can be single stand-alone buildings or housing societies of more than one building. For funding self-redevelopment, the owner collective will invariably opt for bank loans.
 
Benefits of Self-Redevelopment
 
For redevelopment by any means, homeowner groups are motivated by the prospect of larger, more secure homes with vastly improved facilities and amenities. The only reason why a developer would undertake redevelopment is obviously that he gets a massive stake in the whole undertaking.
 
In self-redevelopment, on the other hand, the housing society members themselves reap the full benefits of the unused potential of the property, without stake dilution. Because of the elimination of stake dilution, the homes they get via self-redevelopment are also invariably much bigger than what they could hope for if a builder does it.
 
Moreover, the homeowners have complete control over the quality of construction, the completion timeline, and enjoy more corpus funds because they retain the right to sell surplus homes generated in the redevelopment process. In fact, there is a lot of scope for such extra homes to be generated, thanks to Government intervention.
 
Understanding that Mumbai is in critical need of all and any kinds of redevelopment, the local authority, Maharashtra Housing and Area Development Authority (MHADA) also encourages this new trend by actively granting approvals to self-redevelopment projects within two months, as against the previous four to five months. It also hiked the floor space index (FSI) of such properties under the MHADA purview from 2.5 to 3 in 2017. 
 
Funding Self-Redevelopment
 
With MHADA and the Maharashtra government promoting this concept, various banks and financial institutions are seeing the viability of lending to societies targeting self-redevelopment. For instance, Mumbai Central District Co-operative Bank has provided loans to nearly 30 societies so far, while MHADA - appointed as the supervising authority - can give single-window approval for self-redevelopment. Other banks like Thane District Cooperative Bank and Pune District Cooperative Bank have also consented to offer loans for self-redevelopment. 
 
However, why go in for self-redevelopment when a developer with the right know-how and resources can get it done much faster and more efficiently? The key reason is simple - in the past, several housing societies in Mumbai entrusted the redevelopment of their projects to builders and were left in the lurch.
 
The Murky Past of Redevelopment
 
In many cases, they were cheated by builders in a variety of aspects. In others, the builder ran out of capital and left the whole undertaking in indefinite limbo. Meanwhile, the original owners incur huge rental expenses in alternate accommodations and are generally at the mercy of an outside party whose only objective is a massive profit margin. In the ongoing NBFC crisis and generalized funding crunch, this danger is currently exceptionally high.
 
Exceptions Always Exist
 
Nevertheless, the reason why homeowner bodies turned to developers in the first place is that there were many positive antecedents where everyone got what they had signed up for. If done at the right time and by the right builders, redevelopment can certainly be a win-win situation for all concerned.
 
There are indubitable benefits to engaging the right builder for redevelopment. Society members get new flats at almost zero extra cost plus additional benefits, while for the builders it is a cost-effective way to:
 
  • Build residential or commercial structures by utilizing the unused potential of the property including FSI, the Transferable Development Rights with gradual capital investment
  • The opportunity to establish a brand footprint in central micro markets where land prices are exceptionally high, or where no new land is available at all.
 
However, the power that a developer wields over a redevelopment project is considerable, and such power can be - and has been - grossly misused in the past.
 
A Highly Complex Undertaking
 
Despite the many benefits of self-redevelopment, it goes without saying that it presents a huge challenge to people who have no expertise in any area of development. From applying for funds to finding the right contractors, and from monitoring the entire process to the fair division of the resulting properties, self-redevelopment is a huge uphill task - especially for people who lack the core expertise and have other jobs and businesses to maintain.
 
There are also other potential complications on the route to self-redevelopment. As on date, there is no policy governing self-redevelopment projects; it remains the initiative of the respective society. Seeing its potential and probable benefits, the State Government is now mulling the creation of a state policy on self-redevelopment. However, no clear and actionable policy decision has emerged from this as yet.
 
Inherent Limitations
 
Currently, the trends witnessed so far indicate that most societies coming forward for self-redevelopment are smaller, with less than 50 units each. This is largely because it is easier to get full consent from all stakeholders if the number of stakeholders is relatively small. As the numbers of stakeholders go up, so does the number of potential change-averse dissidents who want things to remain the way they are.
 
Unfortunately, banks offering loans for self-redevelopment make it mandatory to get 100% written consent from all involved stakeholders for the project to commence.
 
Guidelines for Societies Considering Self-Redevelopment
 
Depending on the right government policies and sufficient success antecedents, the trend of self-redevelopment can become a bigger market force and involve bigger housing projects in the future. Success antecedents are very important, so it is imperative that societies do their due diligence before appointing the necessary entities for the redevelopment of their projects.
 
As already stated, getting consensus for every detail from all members of the society is very important, and the likelihood decreases as the size of the project increases. Success on this front depends on excellent communication between all society members and should, if possible, involve a steady stream of professionally crafted communications as well as expert in-person presentations to outline all the benefits.
 
It is a far stretch indeed to expect a barrage of exhortations on a WhatsApp group to convince everyone involved. The best platform is a series of focused society meetings wherein all critical points can be explained in detail, and all doubts put to rest.
 
A sufficient number of stakeholders must be proactively be involved in several activities until the completion of the project. From getting the requisite approvals from concerned authorities to getting all paperwork done to getting no-objection certificates, society members have to do it themselves.
 
In other words, successful self-redevelopment calls for an exceptionally high level of co-operation and dedication among all stakeholders.
 
(Anuj Puri is Chairman of ANAROCK Property Consultants)
 
Like this story? Get our top stories by email.

User

COMMENTS

Meenal Mamdani

3 months ago

The last sentence of this excellent article says in a nutshell why this very worthwhile route is not taken by the many tenants of old buildings.

Lack of trust is the greatest problem affecting Indian society at present. Everyone assumes that you are up to no good unless otherwise proven.

I used to think that this lack of trust was the result of the extremely slow judicial resolution of complaints. But perhaps it has become a habit now with the assumption that any one who takes a lead in organizing tenants must have some ulterior motive.

The Murky Underbelly of B-Schools
My relatives and friends have often taunted me by saying that I have a skewed and negative opinion about business schools. I have also been exhorted to adopt a more positive approach while sharing my experiences with the community at large.
 
My counter to them is that there is only one truth and that is what I have always tried to portray. Today the quality of business education has become so egregious that one has to experience it to feel it. The picture looks rosy from outside but what transpires within the confines of the business school remains camouflaged from the external world. The work environment is such that even the most passionate teacher is bound to get disillusioned at some point in time.
 
Notwithstanding what I have said above, this brief article is a funny (or rather sardonic) take on what actually happens in B-school classrooms. Let me hasten to add that what I have written is based on the experiences of students who had pursued MBA a while ago. So it was a moment of epiphany for me when I understood the ground reality from their perspective.
 
Management institutes have no choice but to accept that students are their customers now and their wish has become a command for them. As I have mentioned in my articles before, teaching has become more stressful now in the era when students are digitally distracted at all points of time. The invasion of the smartphone has robbed students of their creativity as they have started relying on Google for the flimsiest of reasons. However, I wouldn’t blame only the students. Many professors too are guilty of using Google to copy/ cut and paste content in the power point presentation slides. Everyone wants to adopt a short cut. No one thinks of going through a Harvard Business Review paper and using the findings to explain a management concept. The common refrain is – “What will we get out of this?”
 
Unfortunately, there are teachers who circumvent the rules and regulations so that students give them a higher rating and they can continue enjoying what they have been doing. This tribe is only increasing day by day. Let us take the case of Dr.
 
Nandan Dwivedi (not his real name), a doctorate from Mysore University. Dr.
Nandan has been in the teaching profession since 2001 and that makes him a veteran in academics. In local lingo, he can easily be labeled a “dukhi atma” (a sad soul) for he tries to observe the negative aspects in the academic environment more than the positive aspects.
 
Doing research is Dr. Nandan’s favorite pastime and he keeps regurgitating one meaningless research after another. Today there is a widespread notion that those who have acquired their Ph.D. degrees have pathetic teaching abilities. This is partially true as well. Research and teaching are not two sides of the same coin. Dr. Nandan would typically enter a marketing class and start talking nineteen to the dozen about new age marketing.
 
What is wrong with that? I know you are tempted to ask this question. But just imagine that if you are a student and if you only had to listen to a monologue for close to 150 minutes, how would you feel? I am sure students would search for a headache balm if they have to bear with such discourses day in and day out.
 
Dr. Nandan, who is working in a business school in Electronic City, is close to the director of the institution. So, he ends up using students as field workers to collect data. I did have an opportunity to search for some of his papers on Google Scholar and felt that reading his research papers would be a sure-fire cure for insomnia (I did promise you at the beginning that I intend to take a humorous take on B-schools). I apologise if I sound mean and let me add that I don’t have any personal scores to settle with anyone. My argument is – why can’t academic research papers be made more interesting in a way that students as well as industry benefits from them? Rather than writing 50 research papers of dubious worth, wouldn’t it be prudent to write 10 quality research papers? The moment you say “academic research” industry professionals run in the opposite direction. I wouldn’t blame them at all.
 
 Let me narrate the example of another faculty member who has been teaching subjects like statistics and operations research for the last 12 years. This lady teaches from the same old decrepit notebook that she used 12 years ago. She has not bothered to solve any new problems from any new textbooks. For every topic, she does one numerical problem on the board and the rest of the problems are given to students to solve in the classroom. This ensures that she doesn’t have to spend the entire duration of the class explaining to students. This lady also has an innovative method of teaching theoretical portions in the subject. She would simply open an e-book that was published in 2006 and read out the portions of the textbook. In the next 30 minutes, students would be asked to deliver power point presentations. Her agenda for the day is over. The sad part is that she doesn’t change the question papers as well for the internal exams.
 
In fact, the joke in academic circles is that the MBA classroom provides an excellent opportunity for teachers to laze around. Are you bored of teaching on a particular day? Just display a case study on the projector. Ask a student to read it out and then declare that students are going to have a case study test. Your class is done for the day. YouTube videos have become another source of entertainment in the classroom. Teachers explain a concept in the most laconic manner and then the rest of the class is taken over by videos followed by a group discussion! 
 
The less said about the evaluation/assessment in business schools the better. The truth is that most B-school professors seldom read the answer sheets or go through the assignments. I don’t blame them entirely though because some of them are paranoid about forgetting their English after reading what is written on the answer sheets. Now you know the secret – why business school teachers age and grey faster!
 
I had an opportunity to interact with Dr. Nandan in 2016 when I had been invited as a guest faculty by his institution. Dr. Nandan had unofficially appointed one of the younger faculty members as his Man Friday. Dr.
 
Nandan unabashedly fired orders to him in my presence and I was wondering how Dr. Nandan could achieve this feat. Then I could make out that Dr. Nandan was close to the director and this proximity had made a mockery of the institutional rules and regulations. 
 
I felt sorry for the younger teacher who had to serve tea to Dr. Nandan and buy birthday cakes for Dr. Nandan’s daughter (unfortunately this incident happened in my presence!). I could hear silent murmurs about how Dr.
 
Nandan was enjoying his stint in the institution by delegating all the work. He had become someone like a self-styled educational consultant. Consultants are those who have gained sufficient expertise in rendering dollops of advice.  Friends, I hope you will agree with me that rendering free advice is one of the easiest things to do in the world. Dr. Nandan is an expert in this – I could sense this in my subsequent interactions with him.
 
This is only a slice of what the students narrated to me. I can write reams and reams on students’ bizarre experiences. Teachers who make students read the newspaper in the classroom and waste time; teachers who announce that there would a panel discussion in the classroom on a topic (in every class - that is the catch here) similar to what Arnab Goswami does on national television. Announcing class tests all of a sudden to unsuspecting students just to escape teaching for a day is quite common in B-school classrooms. Some teachers discuss topics of general interest in the classroom with both the teacher and the student conveniently forgetting what the subject was.
 
While the entire world is talking about how business schools need to focus more on students’ learning and engagement, some of the business schools are still caught in a time warp. Discussing age-old case studies that bear little relevance to the contemporary business world and triggering a classroom debate only to bide the time are other examples of faculty members using every trick in the trade to hoodwink students. Gullible students also fall prey to the sweet-as-saccharine talk of some teachers without realizing the loss that it would entail.
 
It has become de rigueur for academic institutions to marginally spruce up their infrastructure when a statutory audit is around the corner. Otherwise, if the photographs of the washrooms of some leading B schools were flashed in the social media, no parent would dare to send their son or daughter there. Broken chairs and benches, air conditioners that do not work most of the time, the absence of clean, drinking water and canteens that are a haven for stray dogs and cats characterize the so-called business schools that jostle for space in a crowded ecosystem and aspire for getting “accreditations”. These statutory recognitions have become the biggest mockery in today’s world but more about it some other time.
Like this story? Get our top stories by email.

User

COMMENTS

Alok Alok

3 months ago

Hello Venkat. While you have raised some very valid points, they are valid only for C grade colleges. Students need not fall for the propaganda of such colleges. Who stops the students to write CAT and get a decent percentile. If you are not in the top 15-20 percentile in your batch of MBA aspirants, you can not blame the bad colleges which accept you.

I suggest you visit at least one good college.

Abhishek

3 months ago

Good article and it may be right for private Bschools sprung up in the bustling indian cities. But i must differ with your opinion that all Bschools are become lost cause. It is not. I am currently studying in the second year of one the IIM and i can clearly see the difference. I would certainly recommend IIMs to the perspective students.

P S SHANKAR

3 months ago

This article has sad but true facts. There are many MBA institutes that are a waste of time and money. Many parents and students lured by a false image of post graduate degree fall prey to these institutes.

REPLY

Ajay Mujumdar

In Reply to P S SHANKAR 3 months ago

Though what is written is true for most of the B- or C+ rated institutes. There are still quite a good number of A grade institutes where quality education is imparted and learning happens. Of course one can always find professors in every institute who have taken up the profession to pass their time peacefully without bothering about the students. It is responsibility of the management and the students both to ensure that such teachers are weeded out or at least not assigned to active teaching.

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

online financial advisory
Pathbreakers
Pathbreakers 1 & Pathbreakers 2 contain deep insights, unknown facts and captivating events in the life of 51 top achievers, in their own words.
online financia advisory
The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Online Magazine
Fiercely independent and pro-consumer information on personal finance
financial magazines online
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
financial magazines in india
MAS: Complete Online Financial Advisory
(Includes Moneylife Online Magazine)