If Boris Wants a Stadium at Park Royal here is How he Can Secure it Despite Cargiant

If you have been following this Saga.

The Opportunity Area Planning Framework published today contains a classic planners wolly wording that doesn’t bite.

potential for large-scale catalyst uses such as a new educational facility, football stadium, sports complex, health, arts, leisure or cultural centre

Imaging fighting a CPO inquiry on that wording?

I’m a real wonk on this issue as it is a common one.

Heres the planning law issues

1.  Private Football Club Survival is a private interest not a public interest – planning is about public interest.

Witness Dulwich Hamlet football club inquiry (which I fought and won on behlaf of locl residents) where the inspector agreed with this point and that football is all about the risk of success and failure and failure.

2. Hence the Concept of the ‘Community Stadium’ 

Drempt up by Prescott at the Falmer Stadium Brighton to overcome AONB issues, whilst private interests were not material he considered the stadium as a ‘community stadium’ because it offered sporting opportunities and facilities open to the wider community as a bonus.  The term is now used universally to get around this legal  point.  Witness community stadium proposals (often misconceived) in York, Cambridge etc, et, ad nausium.

3.  You can specify any grade of Community Stadium you like providing it meets a planning purpose.

So you can specify a premier league quality, national stadium quality, league 1 Rugby ground (as in High Wycombe Community Stadium for Wasps), Division 1 Cricket Ground, etc. etc.

4.  You cant Specify the Club in Policy

A private interest.  Which always stuffs QPR as Chelsea has bigger pockets.  So what QPR can buy Stamford Bridge.

With this in mind I dont need  to specify how the policy should be worded, you can work it out for yourself.

If Deptford can rebrand itself as New Bermondsey, (as pontless in the glamour stakes as Welling rebranding itself New Erith) then Old Oak can rebrand itself as New Chelsea.

 

 

Is there Anyone that Believes this Generation Rent Denying Election Poster

Daily Mail Home ownership slips to lowest level recorded in 25 years as England moves closer to becoming a nation of renters

As this government has achieved the lowest housebuilding levels since the 1920s Not Building a Britain would be an accurate byline

Admittedly there has been a very small increase in housing affordability of mortgage holders because of the historically low interest rates, but these are likely to go up this year.  The statistics on % of income on mortgages by Nationwide and so on are misleading as with historically low housebuilding buying a home is now the preserve of the rich not the hard working class.  As the data on renters indicates home ownership is getting more and more out of reach.  What matters is the ability to save for a down payment (after rental payments) AND mortage affordability – I dont think this has been calculated as a metric.

 

No Cameron Did Not Say he Will Protect the Green Belt

Despite Telegraph headlines he went out of his way to circumnavigate saying ‘I will protect the Green Belt’.

“When it comes to our Green Belt, I have been clear.

Clear is a upamism for evasive on planning policy – Bennett Hypocracy.

“The line remains scored in the sand – that land is precious. I am a country man. I love our countryside.

A line in the sand that can be crossed.  Loving teh countryside does not mean protecting it.

“For years Labour’s failed regional strategies cast a shadow over our fields and forests threatening to carve them up and cover them in ugliness.

As if the NPPF hasnt failed and cast villages with ugliness.

“We’ve taken a totally different approach and protecting the Green Belt is paramount.

Green Belt policy in the NPPF is unchanged as ministers have said on many occasions.

“Our priority is building on brownfield – and we’ve made it easier to do so.

“The aim is that by 2020, 90 per cent of suitable brownfield sites will have planning permission for housing.

The London housing zones LDO proposal, the pilot for the scheme, has already been given up by the Mayor of London as impractical. It will make no difference.

“Building more homes and protecting our countryside can go hand in hand in fact development on the green belt is at its lowest rate since modern records began 25 years ago.

Because housebuilding is at its lowest rate since the 1920s, and 40% below 2007 levels.

“And for me it comes down to this. I want my children – and their children – to be able to play on a day out in the North Downs near London.

Over half of which is outside the Green Belt and protected as AONB anyway.  Its not under threat, a bait and switch.

“I want them to be able to walk, as they can now, from Liverpool to Leeds through green belt protected land.

You could still do that and build over 90% of England and do this – how is this relevant?

“I want to know that in the green belt that exists around our cities, nearly one-fifth of England’s ancient woodland stands tall and proud, as it has done for centuries.

So?  4/5ths is outside the Green Belt and weakly protected.

“Put simply: the Green Belt is protected with us. And it is not just green belt that concerns people but green fields. I agree.”

The same language always used by Cameron, remember ‘NHS is safe with us’ a form of wording designed to conceal cuts, reorganisation and in the event failed policy (in that case an A&E crisis wholly unnecessary).

He doesnt say I will protect the Green Belt in the future.  he always uses present tense to allow him wriggle room to do the opposite after an election. His pledges are as consistent as his capitalization of Green Belt. NOte he says nothing about protection of the ordinary countryside, that is where teh palnning section ends.  Typical Cameron, empathy without action.

In the event the conservative housing manifesto it only says local people will protect the Green Belt, getting Central Government off the hook on the Green Belt.  For the first time ever a major national party will enter a general election without a clear commitment or policy as to what it will do as a national policy regarding the Green Belt.

You may argue that Green Belt policy has become a sacred cow, but you neither slaughter or protect a sacred cow by being wolly and evasive.

RSA – WIDER COMMUNITY WILL PAY THE PRICE FOR DISCOUNT STARTER HOMES

Jonathan Schifferes here

The way that property developers will achieve the saving, and pass it on to buyers, is through an exemption from legal requirements to contribute money to the physical infrastructure, amenities and facilities in the place they are built. When we start talking about Section 106 agreements and the Community Infrastructure Levy most people glaze over. But please pay attention: before the crash developers were contributing £5bn per year to build affordable housing, roads, schools and libraries, and fund apprenticeships, bus services and other key facilities.

The law is set up to ensure that new developments don’t dump new problems, like overcrowded roads and schools, on inadequately prepared neighbourhoods. As we argued in a paper last year, planning is a ‘doorstep issue’ that links to a whole range of important public concerns. The implication of the Starter Home scheme is either that everyone else pays for this infrastructure, or that it doesn’t get built at all. And it is this problem that often leads local people, who understand the big picture, to object to specific planning applications: “we need more housing but our streets and public services can’t cope”. (The government has yet another scheme premised on this problem: a New Homes Bonus is paid to local authorities based on the number of homes built).

We label people as NIMBYs, but people often have other rational reasons to oppose new housing. More than two-thirds of adults in the UK are investors in homes as assets that appreciate greatly in conditions where demand is growing faster than supply. This represents a strong disincentive for these individuals to support additional housebuildingin their local market.

France Builds Lots of Houses – But Poorly Matches Local Supply and Demand

City Metric  A lesson in why not to set national targets withouit input on local needs.

The continuous need for more housing is one of the few things most French politicians seem to be able to agree on. Both the Socialist Party and the centre right UMP argue that France needs to build at least 500,000 new homes every year.

That quota is never quite reached, but the idea still remains universally popular. After all, France is one of the EU countries that has traditionally built the most houses. In 2013, it built 5 per 1,000 people, compared to only 2.3 on this side of the Channel. This has been driven by a series of financial incentives – mostly centred around tax breaks – created both by the government of President Hollande, and by the Sarkozy administration which preceded it.

But this commitment to housebuilding has created a whole new problem. By encouraging the housing sector to build across the entire country, the government is creating vast numbers of empty cities.

Last week, an investigation carried out by Le Monde revealed that 7.8 per cent of all homes are currently empty, up from 6.3 per cent ten years ago. The problem is especially pronounced in 42 towns of over 8,500 dwellings, of which at least 12 per cent are unoccupied.

The most extreme example is Vichy, in the centre of France, where 22 per cent of homes – 4,700 of them – are currently empty. The town has become an affordable housing dream, as any request for council housing is filled in within two weeks, Le Monde notes, with claimants being offered “newly renovated flats on the lakefront”.

Nonetheless, the town’s officials complain that they are being forced to build even more social housing this year – homes they absolutely do not need. Under current rules, French towns are required to have at least 20 cent social homes. Vichy only has 15 per cent.

Despite this building spree, housing in France has become increasingly unaffordable over the past 15 years, as house prices have doubled, and rents have increased by more than half. Over the same period of time, wages have gone up by just 30 per cent.

French housing is now some of the most expensive in Europe, just behind the UK. In 2015, a 70m2 flat would cost you around 7.9 times the average wage. In the UK, it’s 8.5.

The problem is especially obvious in Mulhouse, a middle-sized town by the German and Swiss borders. The 37-storey high “Tour de l’Europe”, built in the 1970s, and one of Eastern France’s most famous buildings, stands worryingly empty. About a quarter of the tower – around 50 flats – is now unoccupied. The emptiness has been blamed on rent and utilities prices, which are deemed to high for many to afford.

The Abbe-Pierre Foundation, which campaigns against precarious housing and social exclusion, released some more worrying figures earlier this month. Its researchers found that 3.5m French people are currently in precarious housing, including 2.7m who it described as in an “especially difficult” situation. In the past year, what’s more, 1.8m people asked for affordable housing, but only 467,000 homes were allocated.

In other words, simply building more homes is an overly simplistic response to a complicated problem. For one thing, the state hasn’t been building in the right places. Because demand is unevenly spread, some towns are bursting at the seams, while others are struggling to fill their existing buildings.

Nor have state subsidies been targeting the right homes. Most French help-to-buy schemes are focused on newly built housing; but even without such schemes, it often remains cheaper to buy pre-existing dwellings.

If you’re struggling to get onto the French property ladder, an empty home in the wrong town, or a subsidy for one you can’t afford, won’t do that much to help you. It’s not enough to build more houses: you need to think about who you’re building those homes for.

What are the Options for Where the UK Parliament could Decant to?

Now this is near certain lets look at some options

1. Moves Debates to QE Conference Centre and Methodist Central Hall

The least disruptive.  The commons holds debates at QEC, the Lords at MCH, mps offices.   move to say the Home Office, the Home Office decants to Vauxhall Cross or Croydon.   The conference centre is now privatized so would require them making an offer they couldn’t refuse.

2.  Brum Central Library

If you are going to move to the second city the obvious solution.  A magnificent ziggurat, sadly described by the head of planning as a ‘concrete monstrosity’ fairly easily convertible, a very flexible space built to incredibly high standards.  Sadly demolition work began end of Jan buit I dont think they have got very far.  The prospect of parliament might be the one thing to stop Brums pig headedness and greed on the issue.

 3. Hull

Not a city short of derelict buildings and with real problems of lack of demand.  Would make a dramatic gesture. Sadly would take many years to build and convert a complex that mioght be in use for less than a decade and no clear afteruse.   If Parliament did move here you would bet we would see a Northern Powerhouse HS 3 approved in months as MPs struggled to get back to their constituencies.  Move the DCLG & DOT there instead.

 4.  London Road Fire HQ Manchester

About to be CPOd by Manchester after lying derelict for years

Problem again is the conversion time

More practical might be a temporary decanting of Manchester Council out of its Town hall.  It could hold its debates in many places.

5.  Ally Pally

Has a vacant Theater which could comfortably fit the HOC raked seating within it

6.  The Coronet Elephant and Castle

Originally a 3,100 seat theater and Cinema

7. Hyde Theatre Royal

Needs a new roof but its design would make a truly magnificent parliament.  If you wish to move to Greater Manchester why not

8,  Dudley Hippodrome

Another wildcard from the West Midlands this time.  Better than it being demolished for lack of a re-use.  Cpacity 1,750 seats originally

9.  Brighton Hippodrome

Cpacity 1,400, interior a bit garish and offputting for serious debate

10.  Harrogate International Conference Centre

Harrogate could become the new Bonn.  A very practical option as Harrogate’s hotel spaces is matched to its conference capacity.  A frugal Yorkshire turnkey solution so I think oddly enough the favorite. A Yorkshire parliament debating the Yorkshire pound.  We are never going to host the Eurvision song contest again so why not?

Perhaps we should have a Restoration style TV show to advise parliament with Public voting for their favorite. Will any bookmakers open a book on this?

 

Can we Predict When High Food Prices & Falling Real Wages Will Topple Putin?

A fascinating question.

This year Russians will be spending half of their incomes on food.

This is exceptionally high, only Kenya, Nigeria and Pakistan are comparible – with Nigeria and Pakistan looking equally vulnerable to the ‘new normal’ of low oil prices.

A collapsing currency, shrinking economy, and rampant inflation make a bitter combination for ordinary Russians. What makes it even more unpalatable is what’s happening at the grocery store, where meat, fruit, vegetables, and other staples are increasingly scarce and expensive. Russia’s economic woes are literally hitting its people in the stomach.

This is why Putin is so worried about a colour revolustion, a Moscow Spring.  Clearly the tactic of the west over Crimea and the Ukraine has been to topple Putin through a economic cold war using low oil prices and sanctions to cripple the regime.

Historically there have been clear links between high food prices and unrest.  This has been studied in some depth by complex systems theorists at the New England Complex Systems Institute (NECSI)

NECSI analysis reveals two main forces driving the global food price upward: ethanol conversion and speculation. This work has direct and immediate policy implications.

Since their research waspublished in 2013 a third reason has arisen, global oil price and asset deflation.  It has not yet been updated.

Motherboard summarises

Yaneer Bar-Yam, charted the rise in the FAO food price index—a measure the UN uses to map the cost of food over time—and found that whenever it rose above 210, riots broke out worldwide. It happened in 2008 after the economic collapse, and again in 2011, when a Tunisian street vendor who could no longer feed his family set himself on fire in protest.

Bar-Yam built a model with the data, which then predicted that something like the Arab Spring would ensue just weeks before it did. Four days before Mohammed Bouazizi’s self-immolation helped ignite the revolution that would spread across the region, NECSI submitted a government report that highlighted the risk that rising food prices posed to global stability. Now, the model has once again proven prescient—2013 saw the third-highest food prices on record, and that’s when the seeds for the conflicts across the world were sown.

“I have a long list of the countries that have had major social unrest in the past 18 months consistent with our projections,” Bar-Yam tells me. “The food prices are surely a major contributor—our analysis says that 210 on the FAO index is the boiling point and we have been hovering there for the past 18 months.”

Now of course social unrest has complex causes – think of Egypt for example with its meany years of complex simmering and finely balenced causes of instability, but what this works shows is that high food prices can constitute a tipping point.

“In some of the cases the link is more explicit, in others, given that we are at the boiling point, anything will trigger unrest. At the boiling point, the impact depends on local conditions,” Bar-Yam says. But a high price of food worldwide can effect countries that aren’t feeling the pinch as much. “In addition, there is a contagion effect: given widespread social unrest that is promoted by high food prices, examples from one country drive unrest in others.”

Historically the linkages between high food prices and revolutions is striking

Smithsonian Magasine

According to Sylvia Neely’s A Concise History of the French Revolution, the average 18th-century worker spent half his daily wage on bread. But when the grain crops failed two years in a row, in 1788 and 1789, the price of bread shot up to 88 percent of his wages. Many blamed the ruling class for the resulting famine and economic upheaval. On top of that, peasants resented the gabelle, a tax on salt that was particularly unfairly applied to the poor.

Obviously, the causes of the revolution were far more complicated than the price of bread or unfair taxes on salt (just as the American Revolution was about more than tea tariffs), but both contributed to the rising anger toward the monarchy.

Lester Brown President of the Earth Policy Institute

If I were to pick a single indicator—economic, political, social—that I think will tell us more than any other, it would be the price of grain,”

Slate

Two events have renewed interest among scholars in the relationship between food prices and political instability. The first was the 2007–08 food crisis, which triggered food riots in countries from Haiti to Bangladesh to Mozambique.

The second was the Arab Spring, the first signs of which were riots in response to high food prices in Algeria and Tunisia. The revolutions that swept the Middle East that year were, of course, primarily the result of a population frustrated by decades of dictatorship and corruption, but according to Hendrix, Egypt’s revolution, in particular, is impossible to fully understand without taking into account the role of food….

The Arab Spring may become the textbook example of the geopolitics of food prices—the food riots and subsequent revolutions transfixed the world. But shifts in food price may be responsible for an even more profound reordering of global power. Food may explain why everything changed during the 1980s.

After a price shock in the late 1970s, food prices underwent a slump during the early and mid-1980s. A confluence of factors included slowing economic growth; the spread of the “green revolution,” which improved the efficiency of agriculture in developing countries; and the falling price of oil.

This slump played a role in many of the larger geopolitical trends of the era, according to Argentinian economist Eugenio Diaz-Bonilla. The Soviet Union, which was a net exporter of commodities, was hit hard economically, and by the end of the decade was near collapse. Growth was sluggish throughout the decade in Latin America, where most economies are based on agriculture. Dictatorships were overthrown in Ecuador, Argentina, Brazil, Uruguay, and Chile. African countries entered a period of economic stagnation and civil strife that the continent only recently started to recover from. The emerging tigers of East Asia, meanwhile, such as China and South Korea, benefited from low prices on the food they import.

Sadly the FAO do not publish a country specific real food price index, an interesting task for any PHD student looking for a project. Russia is entering the zone of around 50% of disposable income where unrest becomes near certain, but is well below the range of 70-80% where hostirically revolution is near certain.

Wikipedia on the event leading up to the October Revolution of 1917

Food scarcity had become a considerable problem in Russia, but the cause of this did not lie in any failure of the harvests, which had not been significantly altered during war-time. The indirect reason was that the government, in order to finance the war, had been printing off millions of ruble notes, and by 1917 inflation had made prices increase up to four times what they had been in 1914. The peasantry were consequently faced with the higher cost of purchases, but made no corresponding gain in the sale of their own produce, since this was largely taken by the middlemen on whom they depended. As a result they tended to hoard their grain and to revert to subsistence farming. Thus the cities were constantly short of food. At the same time rising prices led to demands for higher wages in the factories

The real danger the Russian State faces is high inflation caused by the collapse in the ruble and the need to monetise the state in the face of the collapse in the oil price.

Yesterday Russia implemented a Venuzialian style solution, it of course has already restricted grain exports, a tactic likely to see selves empty within months. Putin stupidly has already banned imports from snationing countries. 

Russia Today

Russia’s top supermarket chains are to freeze prices on basic foodstuffs for two months, soaking up the costs as food is expected to eat up half of Russians’ incomes this year.

The retailers plan to freeze prices on 20 socially important items in an attempt to stabilize the food market, the Association of Retail Stores (AKORT) said on its website last week.

“The supermarket chains are certain that their actions will help stabilize the situation on the food market, in the interests of the population”, the Association said.

Retailers want to show their socially responsibility as food prices rise following the ruble’s plunge of over 40 percent to the dollar and the food import bans.

“Freezing prices may lead to an increase in prices of other goods, but I hope it will be not be so harsh and the situation will be stable”, he added, saying there is work on amendments to the trade law, which are aimed at transparency in the relationship between retailers and producers.

This tactic of course has been ordered by the Putin regime, unlike food subsidies in the Arab world for example it will be private sector funded, through cross subsidy and eating into margins.  This will only be sustainable as long as the Russian retail sector can make a profit.

There are two things to watch.  First the headline rate of inflation, if it goes well above the 10% mark then things will look grim for Putin.  Second is surprisingly  not the health of the Russian retail sector.

Rueters last Nov

Fitch Ratings says Russian food retail chains continue to demonstrate healthy like-for like (LFL) sales growth, despite the food import ban imposed in August against the EU, US and certain other countries, based on the 3Q14 operating results of Russia’s five largest public food retailers. Most of the Russian food retailers analysed by Fitch have managed to adapt to the food import sanction by substituting the imported categories with food from other countries, keeping the mix of food products on the shelves little changed. Based on 9M14 financial results by Russia’s three large public food retailers (Magnit, X5 Retail Group, O’Key Group), operating margins are unaffected for now as retailers have been able to pass on the increased costs of some products to customers without altering the product mix materially.

This is the important point.  The squeeze on food prices is nitigated because food retailers have been instructed to raise other prices to cross subsidize. Teh metric to watch then in Russia is not food prices but real wages and disposible incomes post inflation.

Bloomberg

Russian retail sales fell last month for the first time in more than five years as real wages plunged the most since 1999, underscoring the damage inflicted on the economy by a tailspin in oil prices and the ruble’s collapse.

Sales declined 4.4 percent from a year earlier after expanding 5.3 percent in December, the Federal Statistics Service in Moscow said Wednesday in a statement. The median estimate of 14 economists surveyed by Bloomberg was for a 1.9 percent decline. Wages adjusted for inflation shrank 8 percent.

The drop in consumption, which accounts for about half the economy, is the latest blow for President Vladimir Putin as Russia lurches into recession following the oil rout and U.S. and European sanctions over Ukraine. The fastest inflation rate in almost seven years and the ruble’s 46 percent slump in 2014 are eating into workers’ paychecks, putting Russia on track for the biggest drop in consumption in more than two decades.

 “We’re going to see the first fruits of the upcoming recession through deep negative numbers of private consumption growth,” Vladimir Miklashevsky, a strategist at Danske Bank A/S in Helsinki, said before the release. “We expect macroeconomic indicators to hit the bottom during the second quarter.”

So things are already as bad as Russia’s near collapse in 1999.

Even with Puitins popularity if things continue deteriorating at the current rate we could see crisis point hit within 2 years.  Against that background Putin might see provoking a war most Nato members are desperate not to fight as a necessary tactic for survival.

 

 

 

 

 

 

 

Mumbai’s Plan to Replace Slums with Skyscapers

Bloomberg - we repeated on the new Mumbai Plan last week

Mumbai is seeking to amend its 24-year-old building rules that allowed slums to mushroom and kept housing beyond the reach of most of its 19 million residents.

The island-city, which has little land available for development, is proposing changes to its Floor Space Index regulations that may permit developers to tear down old structures and build taller towers. This may be good news for companies including Oberoi Realty Ltd., Sunteck Realty Ltd., Peninsula Land Ltd. and Godrej Properties Ltd., according to Edelweiss Financial Services Ltd.

The plan for the world’s second-most densely populated megacity after Dhaka is part of Prime Minister Narendra Modi’s “Housing for All” program, which seeks to build 20 million homes across India by 2022 to help eliminate urban slums and squalor. In theory, the move should increase the supply of apartments, cut property prices and help India’s financial capital emulate wealthy peers including New York and Shanghai.

 “This is the only way to solve the perennial housing shortage in this city, where most are living in pigeonhole-size apartments,” said Vyomesh M. Shah, managing director of Hubtown Ltd., a Mumbai-based developer.

The Municipal Corporation of Greater Mumbai has proposed to increase the Floor Space Index, or FSI, to range between 2 and 8, compared with an earlier cap of 1.33. The FSI determines the maximum floor area allowed in a building relative to the land on which it is erected.

When the index was first introduced in Mumbai in 1964, it was set at 4.5, meaning on a one acre (0.4 hectare) plot of land, a little smaller than a football field, living space totaling only 196,000 square feet could be built.

Policy makers lowered that number in 1991 to 1.33 times, a move contrary to what most cities with limited land have tended to do — raise the permitted FSI to accommodate growth, as in Manhattan, Singapore, Hong Kong and some Chinese cities.

The proposed change will allow for variable building heights depending on location, consumption patterns and logistics.

Historically, FSI has been used as a tool to limit congestion in Mumbai, said Aashiesh Agarwaal, an analyst at Edelweiss Securities Ltd. said. Under the new plan, it is designed primarily to be a tool to manage physical development by laying out uniform rules, where locations with good public transport connectivity will get a higher FSI, he said.

“They seek to address key lacunae impacting Mumbai’s real estate sector,” Agarwaal said. “They are a step in the right direction and positive for developers with strong governance, brand and execution capabilities.” The proposals will be put up for public comments after which final regulations will be released, which could be as late as end-2015, he said.

The 13-member S&P BSE India Realty Index has risen 17 percent this year compared with the benchmark S&P BSE Sensex index’s 7 percent gain. Oberoi Reality Ltd., the country’s second-largest developer by value, has climbed 14 percent this year while Godrej Properties has added 16 percent.

Not all are optimistic about the proposals. Allowing taller towers on smaller land parcels may lead to a break down of the already creaky infrastructure, said Gulam Zia, Mumbai-based executive director at Knight Frank LLP.

“The city has grown haphazardly like wild grass and now if you let it expand vertically without putting necessary infrastructure in place, it won’t serve anybody,” he said.

The Mumbai metropolitan region needs $60 billion of investment in public transportation over the next 20 years and the current plan falls short of needs, according to estimates by McKinsey & Co. In a 2010 study, the consultant said India must spend $2.2 trillion by 2030 on urban transportation, housing and office space to boost infrastructure ranked below that of Guatemala and Namibia by the World Economic Forum.

More than a decade after then prime minister Manmohan Singh vowed to make Mumbai another Shanghai, the improvements in the city haven’t been significant.

Half of Mumbai’s residents live in slums — more than the population of Switzerland. The city’s clusters of ramshackle huts made from scrap materials line narrow garbage-strewn alleyways, usually lack proper sanitation facilities and water supply, and residents often use pilfered electricity from tapping into power cables.

The business districts are a different world. Mumbai is the world’s 16th most expensive business location as of September quarter, according to real estate services company CB Richard Ellis Group Inc.

In the earlier development plan for the city, FSI was kept low to prevent congestion and promote growth of suburbs, according to a note from Edelweiss. The aim was to curtail the population in Greater Mumbai to 9.8 million.

Under the proposed rules more than half of Mumbai’s land area will get FSI of 3.5. Areas that can be well accessed by public transport, mainly those in close proximity to commuter railway stations and existing and upcoming metro stations could get an FSI of about 5. Such areas would make up about 32 percent of the city’s land.

Higher FSIs of between 6.5 and 8 will be allowed in the immediate vicinity of major railway stations close to the central business districts and other employment nodes. Only about 4.5 percent of the city will fall under an FSI of 6.5 while less than 0.5 percent of a plot area will get an allocation of 8, according to Edelweiss.

“It is expected to address the critical issue of augmenting the housing stock in the metropolis in a very positive manner,” said Sarang Wadhawan, vice chairman and managing director of Housing Development & Infrastructure Ltd., the best performer for the year on the India Realty Index. “However, a lot of clarity is needed with regard to its implementation.”

Some companies such as Housing Development and Infrastructure Ltd., DB Realty Ltd., and Hubtown, that redevelop old buildings will also benefit from the increase in FSI, said Amit Harichand Anwani, a Mumbai-based real estate analyst at Kantilal Chhaganlal Securities Pvt.

Housing Development shares have jumped 71 percent this year while DB Realty added 13 percent.

“There will not be any lack of demand as they are coming up in centers which are densely populated and have a severe crunch for housing units,” Anwani said. “The companies with the right kind of skill set will be able to leverage this rule change without stretching their balance sheet.”