Why PMAY Didn't Take Off In Maharashtra

As Prime Minister Narendra Modi announced the 'Housing For All' mission in 2015, real estate stakeholders rejoiced. The property market was about to attract a never-experienced-before attention from the government. However, the hype around the ambitious project of the Pradhan Mantri Awas Yojana (PMAY) was short-lived as the idea failed to took off in states like Maharashtra. Though the demand for affordable housing is never-ending, the shortage of land and procedural wrangles have been acting as the deal breakers.

According to the recent data tabled in Parliament, over 82,000 houses were built in 30 states under the flagship programme of PMAY (Urban), of which only 5,000 were built in Maharashtra while Gujarat was much ahead of other states with 32 per cent of the total stock. The beneficiaries of PMAY are mainly the urban and rural poor, low and middle-income groups, the central government provides monetary assistance of up to Rs 1 lakh. Post this revelation, media has reported that those projects pending on the bureaucratic level are being fast tracked as per the orders from the state government. But will this solve the very problem that had gripped the real estate sector in Maharashtra?

Shortage of land

Mumbai metropolitan is struggling for land parcel where affordable housing projects can be launched. While the main city does not have any vacant land other than slum rehabilitation projects, salt pan lands and areas that are reserved under the coastal regulation zone, the already over populated city areas would put excessive pressure on existing infrastructure even if more land bank is denotified and allowed for real estate construction. Currently, the land parcels available in abundance is only on the outskirts of Mumbai region where connectivity is a challenge.

Delayed approvals

Even if the developers find a decent land parcel to build a home, approvals and permissions from the civic authority take a long time which ultimately shoots up the total cost of construction. “The single largest factor for the PMAY scheme to not meet its targeted numbers of supply creation is that approvals take up to 2-3 years in Mumbai and MMRDA and even other parts of Maharashtra and hence unless a single window clearance system is put in place that delivers approvals within 30-60 days, the PMAY scheme will continue to be ineffective in Maharashtra,” Rohit Poddar, MD, Poddar Housing and Development Ltd.

Delayed MMRDA plans

The regional development plan of MMRDA is still under consideration and awaiting approval from the state government. The delay has stalled the development of proposed infrastructure. Even the BMC budget didn't talk about the improvement of connectivity in the city.

“Regional plan for the MMRDA not being finalised is another reason for PMAY failure. If the regions that are already well connected don't have a development plan and land zoning in place then finding suitable customer centric locations for the creation of supply will remain difficult,” adds Rohit Poddar.

Possible solutions

With every problem comes a solution. Here are some breakthroughs that can help achieve the 'Housing For All' mission on time:

• Approvals on time

It is important to bring in single window clearance system at least for affordable housing projects. The one-in-all approval certification for such projects would give a big push to projects that are stalled because of approval delays and red tapism.

• Removing encroachments and rehabilitating slums

 A large part of the city is occupied by unauthorised slums and colonies. Though the slum rehabilitation policy of BMC didn't receive much attention, incentives and realistic compensation to the existing occupants might improve the situation and would open land bank that can be complimented with extra FSI where a major component can be sold as affordable housing units under the flagship programme.

• Relaxing coastal regulation zone norms

Though builders can gravely misuse the relaxation and flout the rules, a strict check and heavy penalty can actually help in curbing the exploitation of natural resources if coastal regulation zones rules are relaxed. For instance, although the total expanse of such land is 5,000 acre but only 25 acres of salt pan lands can be opened for real estate development. As the major share of this area is stuck in litigation and another part is encroached by slum dwellers and the rest of it is covered by mangroves, creating a master plan for this part of eastern suburb is a rare possibility. A committee should be formed to look into construction rules and arranged in a way that maximum potential can be put to use.