MHADA Affordable Housing Policy in Mumbai

The Government's plan of 'Housing for all by 2022' called for affordable housing projects in different parts of the country. The plan aims at providing low cost housing options for the lower and middle-income buyers in the major cities, most of which are experiencing rapid population growth. And as far as population explosion is concerned, Mumbai has left every other city behind.

Everyday thousands of people from villages as well as smaller urban settlements are migrating to Mumbai, The City of Dreams, in search of better opportunities. The service sector which is concentrated in the heart of the city attracts the largest number of people. The population density in Mumbai is already as high as 21,000/sq. km. 57% of the homes are one-room dwellings and 41.9% of the total population lives in the slums. Estimates suggest that by 2020, more than 45 percent of the population will be living in the most urban parts of the city. Consequently, Mumbai has become overcrowded and faces scarcity of land as well as basic facilities like water and sanitation. However, Mumbai real estate market is a high-priced market, failing to meet the affordable housing needs of the people.

In response to the needs and demands for affordable housing, the Maharashtra Housing and Area Development Authority (MHADA), in partnership with private developers, has stepped forward to meet the requirements. For this purpose, the target groups are divided into Economically Weaker Sections (EWS), Lower Income Group (LIG) and Middle Income Group (MIG). The ceiling on the income of these groups is taken as per government's policies and are the following: EWS - Rs. 1, 92,000, LIG - Rs. 4, 80,000 and MIG - Rs. 8, 40,000. The carpet areas for affordable houses have been defined as 27.88 sq. m. for EWS, up to 45 sq. m. for LIG and up to 80 sq. m. for MIG.

The joint venture scheme aims at tapping the privately owned land for the development of affordable houses. The idea was to encourage the developers having a minimum of 2000 sq. m. of plot area to transfer their land in the name of MHADA, so that it will get higher Floor Space Index (FSI) under the affordable housing schemes in different parts of the city. The developers will not be required to transfer land titles to MHADA. Instead, they have to transfer only MHADA's share in the name of the housing board. The developers are entitled to have a higher FSI of 2.5.

From the existing zonal FSI along with the additional 2.5 FSI, 50% will be shared between MHADA and the developer. Developer may handover this FSI to MHADA in a built-up form for which MHADA will pay the cost of construction to developers based on District Schedule of Rate (DSR) towards the construction cost, or carve out the proportional land of MHADA share for self-implementation scheme by MHADA. The developer will be eligible to use the remaining 50% FSI for his scheme. Thus, total FSI to developer would be zonal FSI + 50% additional FSI.

The affordable housing policy focuses on incentivizing the projects through higher FSI and includes the development of affordable housing projects in Mumbai Metropolitan Region, cluster development, special township, development/redevelopment on MHADA Land, slum rehabilitation, redevelopment of old and dilapidated buildings and inclusive housing in layouts. For redevelopment, a higher FSI of 3 against 2.5 is allowed.

A number of developers showed interest in the scheme and in the lottery held in 2014, MHADA sold out 2,641 houses in areas like Virar and Vengurla. In its annual lottery for the next year, it will give out 4,700 affordable homes at prices lower than the last draw. The location of homes is not confirmed but in Thane it is likely to be located in Manpada. To avoid making people wait for the completion of the project after winning the flat, this time, MHADA has decided to conduct the lottery only after the homes are ready.

The affordable housing policy of MHADA is a major step towards fulfilling the scarcity and requirements of affordable housing in Mumbai. The scheme encourages the participation of private builders which assists government's efforts in this direction. MHADA has also proposed to make a special cell that will plan the affordable housing projects and advise the government on related aspects.

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