With actor C. Joseph Vijay and his Tamilaga Vettri Kazhagam (TVK) government now in office in Tamil Nadu, stakeholders in the real estate sector have a wish list for the new administration that is immediate and pragmatic. Realtors have called for faster approvals, clearer land policies and infrastructure expansion. They request investment in flood-resilient infrastructure, water management systems, roads, public transport and last-mile connectivity across rapidly growing cities and towns, while also urging the government to expedite the proposed Parandur greenfield airport project.

“The real estate sector is one of the largest employment generators and economic multipliers in Tamil Nadu,” begins Ranjeeth Rathod, managing director of DRA, a Chennai-based real estate developer. “It supports over 250 allied industries, including cement, steel, electricals, interiors, logistics and financial services. The new government has a significant opportunity to position Tamil Nadu, especially Chennai, as one of India’s most progressive urban economies,”he adds.

He points out that Chennai can no longer continue growing only horizontally, what with land within city limits being finite, and infrastructure costs rising rapidly. “The government should consider a calibrated higher Floor Space Index (FSI) in infrastructure-ready corridors, especially around Metro Rail networks and major arterial roads,” he continues. “Also, climate resilience can no longer be treated as a seasonal issue. Chennai requires a long-term scientific flood management strategy integrating macro drains, lakes, waterways and urban planning controls.”

Currently, the FSI (Floor Space Index) limit for multi-storey buildings stands at 3.25, while for regular residential developments, it is capped at 2. During the previous government’s tenure, there were proposals to increase FSI limits in line with cities such as Bengaluru and Hyderabad; the proposal was not implemented.

W.S. Habib, president of the Confederation of Real Estate Developers Associations of India (CREDAI), says that the State urgently requires dynamic and future-oriented Master Plans across all major cities and emerging urban regions. He also adds that newer master plans should focus on transit-oriented development, planned expansion corridors, satellite townships and affordable housing ecosystems. Faster approvals is something that stakeholders in the real estate sector have been concerned about.

“Today, the cumulative impact of approvals, premiums, infrastructure charges and delays increases the overall cost of housing. Reducing the cost of doing business will ultimately make homes more affordable for the middle class and encourage more investments in the sector,” says Habib.

Another source in the real sector says that today, an environmental clearance takes at least five months, and a fire clearance takes three months. Additionally, around 15-16 ‘no objection’ certificates are required. These delays slow project delivery.

Eye on Coimbatore

Habib also explains how other cities in Tamil Nadu can improve and offer the required facilities. “Coimbatore has evolved into one of South India’s most promising urban growth centres. The city combines entrepreneurship, manufacturing, education, healthcare and IT growth with a very strong quality-of-life factor. Areas such as Saravanampatti, Avinashi Road and Kalapatti are witnessing significant real estate activity. The city now requires stronger mobility infrastructure, airport expansion and better public transport,” he says.

Emerging corridors

Hosur is emerging as one of Tamil Nadu’s most strategic growth corridors. Its proximity to Bengaluru, combined with manufacturing and warehousing investments, is creating enormous potential for residential and commercial development. Likewise, Madurai is gradually transitioning into a modern urban centre driven by healthcare, education, tourism and IT-related growth. Districts such as Thoothukudi, Tirunelveli and Kanyakumari have enormous untapped potential. Ports, renewable energy, tourism, education and industrial investments can reshape the economic profile of southern Tamil Nadu over the next years.

Next business hub

Sanjay Chugh, city head and director of ANAROCK Property Consultants, a real estate company,observes that Tamil Nadu has the opportunity to differentiate itself by creating integrated business districts, transit-oriented office corridors and experiential retail destinations. “For the office sector, faster approvals for Grade-A developments, dedicated GCC clusters (hubs of Global Capability Centres), improved public transport connectivity and mixed-use ecosystems will be critical as Chennai emerges as a major GCC destination,” he says.

Ajit Chordia, managing director of Olympia Technology Park, an IT company, suggests unlocking government land for the development of Public-Private Partnership (PPP) models. He says that Chennai building development rules should be revamped. “Implement incentives promised in past IT policies like 100% free FSI — a promise not kept,” Chordia notes.

Land price debate

Tamil Nadu is also home to several land developers. Bala Ramajayam, founder and managing director, G Square Group, a plotted developer, observes that Chennai, in particular, is witnessing strong demand across suburban and emerging corridors, especially in plotted developments and land investments. “The government should focus on digitisation of land records, transparent policies, and stricter action against unauthorised layouts to further strengthen buyer and investor confidence,” he says. Citing the recent notice issued by CMDA that pushes for faster clearances and stricter action against malpractices, he says land prices could stabilise if such measures are implemented effectively. “Land prices are high because approvals take a lot of time. Those in the business borrow money at huge interest. If approvals come on time, my interest will reduce, and I can focus on the next business,” says Ramajayam.

Airport push

Mehul H. Doshi, president of CREDAI Chennai, reiterates that the government should also fast-track the development of Chennai’s second airport (at Prarandur), which is critical for the city’s long-term economic growth and global connectivity. Industry stakeholders point out that Chennai’s existing airport infrastructure is struggling to match the scale and connectivity offered by cities like Hyderabad and Bengaluru. They note that several international airlines either do not operate from Chennai or have reduced services over time.

Lifestyle infrastructure

Another key recommendation put forward by Rathod and several stakeholders from the real estate sector is the need for the new government to focus on strengthening social infrastructure. They point out that Tamil Nadu is increasingly becoming home to a diverse global workforce, including professionals from countries such as Korea, Japan and Germany, while younger generations are also seeking more experience-driven and lifestyle-oriented urban spaces.

Industry players suggest that the State should invest in creating venues, for music concerts and other cultural programmes, along the lines of the National Centre for the Performing Arts (NCPA) in Mumbai. Suggestions include boosting the East Coast Road and beachfront with restaurants, pubs and themed spaces, establishing a Kollywood movie museum and a dedicated Film City with a drive-in theatre, creating 24x7 shopping districts in areas such as Khader Nawaz Khan Road and Anna Nagar, and exploring regulated lifestyle concepts such as microbreweries.

What is 100% free FSI?

n Tamil Nadu, especially under the Tamil Nadu Combined Development and Building Rules, 2019 (TNCDBR), the term “100% free FSI” is often interpreted differently by builders compared to the general public.

From a layman’s perspective, “100% free FSI” may imply that the developer can build the entire permissible FSI without any cost. However, from a builder’s perspective, it means that the base permissible FSI allowed by the regulations can be utilised without payment of any premium FSI charges.

As per TNCDBR 2019:

l Sites on 12 m road width can generally achieve FSI of 2.0

l Sites on 15 m road width can generally achieve FSI of 2.5

l Sites on 18 m or wider roads can generally achieve FSI of 3.25

This base permissible FSI is what is commonly referred to by developers as “free FSI” since no additional premium payment is required for utilising it, provided all development control regulations are complied with.

Therefore, “100% free FSI” does not mean unlimited or cost-free construction potential, but refers to the allowable base FSI under the prevailing development regulations without payment of premium FSI charges.

Premium FSI

Tamil Nadu regulations also permit ‘Premium FSI’, which allows developers to build additional floor area over and above the normally permissible/base FSI, subject to payment of premium FSI charges.

Premium FSI allowed:

l 18 m+ road → Additional 50% of base FSI

l 12 m to below 18 m road → Additional 40% of base FSI

l 9 m to below 12 m road → Additional 30% of base FSI

How to calculate:

Premium FSI charges are calculated based on the “excess FSI area” and the guideline value of the land:

l High Rise Buildings → 40% of guideline value

l Non High Rise Buildings → 50% of guideline value

So, under the current rules, a project on an 18 m+ road can potentially achieve an overall FSI of around 4.88, subject to payment of Premium FSI charges and compliance with all development regulations.

Builders often argue that higher FSI reduces apartment prices by distributing land cost across a larger saleable area, thereby improving project efficiency.

However, evidence across Indian cities is mixed. Apartment prices are influenced not only by FSI, but also by land prices, construction cost, demand, financing, and market positioning. In many cases, higher FSI has improved project viability and developer margins rather than directly reducing apartment prices for buyers.