What is the difference between TDR and FSI?
FSI stands for Floor Space Index which is the quotient obtained by dividing the total built-up area of all the floors in a building by the area of the plot on which the building is made. FSI is also known as Floor Area Ratio, It is the total permitted area on land for construction. The National Building Code of India is responsible to provide guidelines for construction activities across the country. The FSI is regulated by the municipal or other local bodies of the state government. All real estate developers and investors should have proper knowledge about the FSI of that area before starting their projects. It also affects the value of land in any area. It varies from one area to another and there are many factors that determine the permissible FSI in any specific area like environment, business opportunities, etc. It is also necessary for making spaces for projects like roads, railway stations, commercial buildings, etc. If the FSI is high then the area for construction will also be high for the respective plot and if the FSI is low then the area for construction will be low. In the real estate industry, It is a major determining factor for the value of a piece of land and the type of projects that are possible in that area.
TDR stands for Total of Development Rights and it is a very important tool for real estate developers. It allows the developers to increase their projects beyond the permissible FSI. TDR can be obtained in the form of certificates that are available in the market. It is responsible for the development of underdeveloped areas. It is a very effective method for increasing deferment in certain parts of many big cities. TDR can be sold in the market whereas FSI is fixed by the concerned authorities. TDR is also needed for making space for projects like roads, hospitals, schools, etc. and FSI makes sure that there is sufficient space for such projects. TDR is also responsible for many reckless projects that have been done in many cities which has raised many environmental issues. In the real estate industry, TDR has been a very helpful tool for developers. It aids their projects and allows them to expand their projects and get better returns. It is also a reason behind the increasing real estate prices day by day.
FSI is fixed and regulated by the authorities whereas TDR is also decided by the authorities and it allows the developers to expand beyond the FSI. Both of them are important tools for future projects and they have their own benefits and disadvantages. FSI can’t be sold in the market and all the real estate developers have to follow it whereas TDR can be bought and sold. Both are used by the government as a tool to protect s piece of land and the resources in it and both affect the price of a property in a given area.
