Balancing Growth and Compliance Under Karnataka’s New Development Rules

Urban growth often walks a fine line between aspiration and regulation. This holds true especially for a city like Bengaluru, where the real estate sector has been a primary engine of economic growth. But now the sector is expected to get further impetus with the Karnataka government’s recent announcement of an amendment to setback norms under the Revised Master Plan (RMP) 2015. The newly revised norms are expected to bring much-needed clarity and design flexibility, particularly for mid-rise buildings. For a city that has added over 100 million sq. ft of new real estate in the last decade and continues to see annual demand growth of 8–10% in residential and commercial segments, these changes are more than just technical adjustments.

It stands as a bold intervention shaping the very fabric of one of India’s most dynamic real estate ecosystems. The new guidelines could well provide answers to Bengaluru’s relentless vertical expansion and to chronic infrastructure woes, placing urban planning under intense scrutiny. 

For buyers, this offers a better opportunity to get more light, air and urban aesthetics into their homes. For developers, the impetus now shifts toward design innovations such as vertical stacking, smarter parking layouts, and integrated service cores to maintain project viability despite the encroachment on saleable floor area.

The allowance for stilt floors fundamentally expands architectural and parking flexibility in mid-rise developments. As a result, the industry anticipates new solutions in floorplate efficiency and spatial optimisation, further enhanced by proactive engagement with planning authorities and consultants. Karnataka’s draft Model Building (Amendment) Bye-Laws, 2025, specify thresholds for such modifications, such as more than 15% deviation in setbacks or coverage, or more than 5% in FAR and parking, ensuring legal clarity but also compelling developers to revisit project assumptions.

To mitigate these risks, developers must adopt a forward-planning approach. Portfolios need to be segmented between greenfield projects, those in the approval pipeline, and those already sanctioned but yet to commence construction. Each segment requires a different response, ranging from complete design recalibration to selective plan modifications or voluntary adjustments to improve buildability.

Architects must optimise layouts to work within the new envelope, leveraging stilt-floor exclusions to preserve parking and services while retaining saleable space above ground. At the same time, digitisation of approval workflows, meticulous title and tax record reconciliation, and pre-submission compliance audits will be critical to reduce the friction of re-approvals in a changing administrative landscape.

While near-term costs are unavoidable, the longer-term benefits of regulatory clarity are plenty. Buyers today prioritise transparency and delivery assurance, particularly in Bengaluru, where project delays have historically undermined confidence. The revised setback norms, if implemented with consistency and supported by efficient approval mechanisms, can reinforce trust by ensuring that new developments meet higher standards of liveability and safety.

But for that to happen, it would be vital for better coordination between policy intent and administrative execution. Developers must not only re-engineer their projects but also recalibrate their engagement with municipal bodies, ensuring that approvals are not held hostage to ambiguity or procedural lapses. The state’s shift to model-building by-laws, uniform triggers for modified plans, and decentralised governance can help accelerate this transition, provided implementation remains seamless.