M. Hariprasad, a resident of K.K.Nagar, was finding it difficult to cope with the challenges of his 30-year-old dilapidated apartment. All owners of the six housing units in the Housing Board apartment complex decided in 2004 to construct a new residential building. But the task of demolishing the Housing Board apartment and constructing a new one with the help of a private builder was not easy for us, he says.
At last, the ground-breaking ceremony is happening on February 5, he says. The six dwelling units would become 12 after the reconstruction. The owners would get a modern 1500-sq.ft apartment instead of the old 915-sqft structure. They also receive around Rs.15 lakh from the builder who would sell some of the housing units in the project.
“Most of the reconstructions of housing board apartments are done with the help of joint venture,” said Dinesh Balakrishnan, General Manager, Marketing, Landmark Constructions.
There is a market for premium apartments in the city and reconstruction of a Housing Board apartment is an option with low margin and lesser input cost, he says.
N. Devanand of JD Constructions agrees. “Getting a modern premium apartment is the major attraction for customers in such projects. Getting land in the city relatively easily is the builders’ attraction.”
One such project in K. K. Nagar has been fully sold out within a very short period, said K. Kuppusamy of Sakthi Constructions. The investment of the builder in this kind of projects is 40 per cent lesser than other projects but the profit margin is also reduced, he says.
The Floor Space Index is less than one in the Housing board apartments. The builders say they make optimum use of the FSI provisions during reconstruction. Pulling down the Housing Board apartments is also easy as the steel used is less and most old structures are not RCC, says a builder.
The builders also help the owners get no objection certificates from the Tamil Nadu Housing Board. Builders also lure the owners of housing board apartments by assurance of free interior decorations, including modular kitchen. However, creating cooperation among the owners is the most challenging part of the process, says Mr.Hariprasad.
Large-scale demolition and rebuilding for a target group has gained momentum in the city as the market for premium housing is improving in the city limits, says Saravanan, a home loan marketing executive.
The builders also make monthly payment for the rental accommodation of the Housing Board apartment owners during the period of reconstruction of the building, which ranges from Rs.8,000 to Rs.10,000. But most of the owners of the TNHB apartments who have signed agreement with the builders for such projects say the selection of builder was more to do with the quality of construction.