The revenue from building permits dropped by 53% between 2019-20 and 2020-21, according to the figures presented in the corporation budget for 2022-23. The sluggish sector has also forced the finance committee to bring down the estimate from a projected Rs 25 crore to Rs 13 crore for the year 2021-22.
Lack of optimism is evident in the estimate expected for 2022-23, as well as the estimated amount from collection of building permit fee is set at Rs 20 crore; even lesser than what was expected during the previous fiscal.
Over the past decade, revenue from permit fees for constructions has been one of the major revenue sources of the city corporation. It had soared from Rs 2 crore in 2010-11 to cross Rs 10 crore annually which had boosted the finance committee to bring the projections close to Rs 20 crore of late.
“In 2019, the building rules were amended. With very little constructible land, vertical expansion is the way ahead. However, the amendments affected this building plan since regulations were introduced regarding floor space index. Owing to the intervention of architects and builders, certain relaxations came into effect in 2020 which was a relief. Even then, considering the need for more area for construction, regulations imposed without proper consultation really affected the construction sector,” said V S Jayachandran, president, CREDAI, Trivandrum.
The representatives are hopeful that with the introduction of a new master plan many issues will be sorted.
“There has to be a platform for proper consultation with the stakeholders. This will help in earmarking specific areas available for construction,” added V S Jayachandran.
Real estate representatives point out that owing to the sheer increase in construction cost, many builders are at a loss finalising the cost.
“The cost of construction has increased by 1,000 per sqft within a year. This creates a lot of apprehensions regarding new launches and fixing the price. By the time the building is handed over to the customer, the original rates estimated for construction 3-4 years ago would have varied so much,” a builder said.
According to persons in the sector, land measuring 30-40 cents is hard to find within the corporation limits and when the project has to be taken to the suburbs, many people feel sceptical which also leads to drop in constructions.
The sector is, however, not short of optimism. “The demand for housing in the district is really encouraging. It is a good sign post the pandemic. The number of vacant apartments has come down and bookings are being made for new ones,” a realtor said.