South Mumbai, the most expensive property market in the country, may change for ever. A Supreme Court order has paved the way for redevelopment of the entire city, the impact of which would be primarily felt in South Mumbai, dotted with old, crumbling mansions.

While the decision would free vertical growth in a city that’s clamouring for space, it would put an enormous strain on Mumbai’s already creaky infrastructure.

On Thursday, the apex court upheld the Maharashtra government’s development control rule 33(7) (or, DCR) that allowed builders to avail of three to seven times the Floor Space Index (FSI) while re-developing old, cess buildings in the city. The FSI fixes the extent to which an open space can be developed.

The SC order brings to an end a protracted legal battle over one of the most contentious issues in Mumbai.

Close to 19,642 old, cess buildings in South Mumbai will be available for redevelopment — a possibility that could be a windfall for many builders. It’s unclear whether the extra supply in the coming days would have any significant impact on property prices. Even though property markets in several cities have crashed, the extent of correction has been rather insignificant in Mumbai.

According to the amended rules, developers can get up to 2.5 or even higher FSI for re-development of chawls constructed before 1940. For chawls constructed after 1940, developers will get, as an incentive, 50% additional FSI of the utilised area for rehabilitating existing tenants.

The builder community believes that the SC decision may throw open large housing stock in the market and eventually soften property prices. “This was one of the biggest hurdle in Mumbai’s development. Now, with SC settling the issue once and for all, the city will have as much as 200 acres of land open for re-development in the next 10 years. It’s a very significant development,” said Orbit Corporation director (finance) Ram Yadav.

“Not only builders; even the residents of Mumbai’s crowded suburbs like Thakurdwar, Zaveri Bazaar, Chira Bazaar and Grant Road wanted these rules to be made effective. With the apex court upholding them, it will bring in considerable relief to lakhs of residents of old, dilapidated buildings,” said Vardhman Group managing director Rajesh Vardhan. The goup is active in the housing re-development space.

The present turn of events owes its origin to the state amendment of DCR 33(7) four years ago, which left redevelopment at the discretion of builders. While the need for redevelopment was widely felt, many objected to the way the state government went about changing the rules.

Several city-based activists feared that it would lead to indiscriminate development in the island city. Former Mumbai municipal commissioner JB D’Souza, along with Cyrus J Guzder and Shirish Patel, challenged the state’s decision in a public interest litigation before the Bombay High Court.

The petitioners said the amended rules can allow builders to undertake redevelopment of even strong and comparatively new buildings. “This is bound to put a massive strain on infrastructure like transport, water supply and sewerage,” they had argued, while pleading with the Bombay High Court for quashing the order that amended the DCR 33 (7).

The petitioners had sought the HC directive to set up a panel of experts for certifying redevelopment of only dilapidated and structurally-unsound structures.

The then Chief Justice of the Bombay High Court, Dalvir Bhandari, and Justice DY Chandrachud had not only upheld the petitioners’ contention but ordered an interim stay on all redevelopment projects falling under DCR. The high court also had ordered the formation of a structural committee comprising three engineers to review “weak” buildings and decide whether these need redevelopment. Thursday’s Supreme Court verdict will once again upturn all this.