Tamil Nadu Building Rule Changes: What They Mean for Buyers and Investors in Chennai

What happened?

The Times of India reported that Tamil Nadu amended the Tamil Nadu Combined Development and Building Rules, 2019, with orders issued on Oct 26. The ceiling that separates non-high-rise buildings from high-rise ones moves from 18.3 metres to 19.5 metres in the provisions that mention it.

According to the newspaper, the state also changed how sites on wider roads are treated. In designated residential and primary residential zones, a site that fronts and takes access from a road of at least 12 metres can be deemed commercially zoned in specified circumstances. Outside the Chennai Metropolitan Area the matching road-width figure is 9 metres. A CMDA official told the paper this should mean fewer reclassification files.

The Times of India added that IT offices now need less parking: one car space per 75 sq metres of floor area instead of 50, and one two-wheeler space per 50 sq metres instead of 25. Inside the restricted aquifer recharge zone, specified non-high-rise homes and commercial buildings can now rise to 14 metres rather than 9, while the cap of six dwelling units stays. The housing secretary was quoted as saying a further floor can be added on what used to be a ground-plus-one building. The list of permitted uses there also grows to cover items such as hostels, old-age homes and some tourism uses. High-rise FSI of 2.0, 2.5 and 3.25 for 12, 15 and 18 metre roads is unchanged, and plot coverage stays at 50%.

Which sectors are affected?

• Chennai aquifer recharge zone
• Chennai Metropolitan Area
• Non-high-rise residential and commercial buildings
• IT offices
• Hotels, hostels and tourism-related development
• Plots on roads of 12 metres or more

Potential impact

For plots in the aquifer belt, an extra floor can raise the usable built-up area on a site, which may improve the economics of small projects and individual houses. Whether that shows up in prices is unclear. Land there may attract more interest, but the six-unit cap, existing road-width, setback and FSI conditions still apply, and the news does not say how many plots qualify.

Commercial deeming on roads of 12 metres or more could shorten approvals and make some sites more flexible to use, though it is limited to the circumstances the rules specify. Lower parking norms may cut costs for IT office developers, which could help office supply at the margin. Chennai's average price in our data is about 9,200 per sq ft with a rental yield of 3.3%, and nothing in this amendment on its own points to a move in either figure.