Policy Rethink: 4 Major Reforms That Will Make Homes Affordable In Mumbai

The draft development policy proposed major reforms that will change the face of one of the most populous cities on earth. The draft policy is being revised, and is unlikely to be implemented this financial year. Urban policy experts like Alain Bertaud think that Mumbai's real estate needs major reforms because slum population is likely to rise faster than the supply of homes. Mumbai's local authorities and Maharashtra state government have been proposing reforms to make real estate in Mumbai affordable.

Let us take a look at four of those reforms:

The Maharashtra Urban Development Department raised the floor space index (floor space index or FSI is the ratio of floor area to the size of the plot) in residential areas of G Block of the Bandra-Kurla complex from three to four. Twelve hectares of land in the 130-hectare G block has residential developments. This is an important reform because residential real estate in the Bandra- Complex (BKC) is highly expensive. Bollywood actresses such as Kapoor and Aishwarya Rai, and bankers like Uday Kotak, had bought apartments in BKC recently. Bertaud had proposed in 2005 that as BKC was the centre of gravity of population of Mumbai, more development should happen there, and that BKC should be connected to major transportation networks. More people live close to Bandra-Kurla than to Nariman Point, the de factor CBD of Mumbai. Even though residential FSI is the highest in BKC, it is still lower than in major cities like New York where the highest residential FSI is 15. A high FSI is necessary for complementary economic activities to flourish in BKC.

The Maharashtra government has drafted a redevelopment policy for the Bandra government colony. The plan is formulated to redevelop the 93-acre colony. This is expected to increase the revenues of the state government by Rs 70,000 crore. The state government finds the plan submitted by L&T to redevelop the colony carefully crafted. After redevelopment, 20 acre of land will be owned by the developer and the rest will be handed over to the government. The government plans to build quarters of its employees, transit quarters, government offices, schools and such buildings in the colony. As redevelopment is expensive, if implemented well, this will help the government to increase revenues, while builders will be able to build greater floor space. 

Development Directorate (BDD) chawls will be redeveloped under the cluster redevelopment scheme. If this plan materialises as expected, the chawls that stand on 92.7 acre will be redeveloped, allowing people in 160-sq ft chawls to relocate to 500-550 sq ft homes. This is expected to be one of the largest cluster redevelopment plans in India. When chawls are redeveloped, the government also plans to allow an FSI of four. 

The Maharashtra government plans to use no-development defence zones to build affordable homes. Under this scheme, land that belongs to defence personnel will be unlocked to make homes affordable for residents of Mumbai. The Ministry of Defense owns 1.7 million acres of land throughout India. Many government agencies, including the Port Trust, own such large tracts of land in urban Mumbai, where real estate is otherwise very expensive. The Ministry Of Housing and Urban Policy had recently published a study that suggests that if government unlocked such land, residential real estate could be made more affordable. The government also plans to use 350 acre of land under the control of Port Trust.