Baseline FSI restrictions and Corruption are Killing Housing Affordability

India's urban housing crisis is being quietly engineered by artificially low Floor Space Index (FSI) limits imposed by municipal corporations and state governments across major cities. Mumbai, one of the world's most densely populated and economically productive cities, maintained a baseline FSI of just 1.33 for decades — among the lowest globally, while Tokyo and Hong Kong allow 10–15. This artificial cap on how much can be built on any plot creates a government-manufactured scarcity of floor space, driving property prices to 14x annual household income in Mumbai. Worse, the system is designed to be gamed: rather than a clean uniform FSI, governments grant exceptions through a Byzantine TDR and premium FSI market that only politically connected large developers can navigate, turning a public planning tool into a private rent-extraction mechanism. The result is a brutal squeeze on the middle class — apartments have shrunk 27–45% in size over the past decade while prices per square foot have risen over 50%, meaning families are paying more, borrowing more, and getting significantly less liveable space. For instance, the Maharashtra state government has the legal authority under the MRTP Act to raise baseline FSI tomorrow, but faces a powerful coalition of interests — established builders, municipal revenue dependencies, and litigious citizens' groups — all of whom profit from or are habituated to scarcity.

The responsibility for this failure sits with identifiable institutions and individuals. The Brihanmumbai Municipal Corporation (BMC) has for decades defended low FSI under the cover of infrastructure constraints while simultaneously monetising premium FSI exceptions — profiting from the very scarcity it creates. Maharashtra's Urban Development Department, which has had the statutory power to revise FSI norms under the MRTP Act since 1966, has instead produced a labyrinthine patchwork of TDR notifications that serve developers far better than homebuyers. Successive Chief Ministers — from Vilasrao Deshmukh through Devendra Fadnavis — have presided over this system without dismantling it, choosing incremental amendments over structural reform. The Confederation of Real Estate Developers' Associations of India (CREDAI), while publicly calling for FSI reform, has simultaneously lobbied to preserve the TDR market complexity that insulates large incumbent developers from competition. And successive Maharashtra governments' Urban Development Ministers have approved individual FSI exceptions for projects with clear political patronage links, while blocking the one reform — a simple, high, uniform baseline FSI — that would make those exceptions unnecessary and valueless.

We need a political force on these CMs to increase baseline FSIs!