[Urbanstudy] Maharashtra to tweak housing project norms

[Vinay Baindur]

http://www.livemint.com/Politics/ldEX92yMTU6LInFAaRTnrO/Maharashtra-to-tweak-housing-project-norms.html





*Maharashtra to tweak housing project norms *

State to alter revenue-sharing formula to make redevelopment of housing
colonies in Mumbai builder-friendly

Makarand Gadgil |  Madhurima Nandy

So far, Mhada has received proposals for the redevelopment of 60 housing
colonies, out of which it has approved 12. Photo: Mint Mumbai: The
Bharatiya Janata Party (BJP)-led Maharashtra government plans to tweak the
revenue-sharing formula to make it more builder-friendly in redeveloping
more than 100 housing colonies in Mumbai.


The government is altering a policy set by the previous government, which
made it mandatory for developers to give away some of the redeveloped units
to the Maharashtra Housing and Area Development Authority (Mhada).
According to the government led by chief minister Devendra Fadnavis,
developers will now only need to pay a certain amount of money to Mhada;
they will not need to return housing units. Mumbai has nearly 104 housing
colonies developed by Mhada, built between the 1960s and the mid-1980s,
which occupy 1,560 hectares (ha) of prime real estate. Many of these have
become unfit for habitation and have been declared dangerous to live in by
the Municipal Corporation of Greater Mumbai (MCGM).

So far, Mhada has received proposals for the redevelopment of 60 housing
colonies, out of which it has approved 12. However, work has not started on
any of them yet and people continue to live in these colonies.

“Redevelopment is critical to a city like Mumbai. The new government is
taking a lot of steps in adding momentum by increasing FSI (floor space
index) or changing redevelopment guidelines in a balanced manner so that
more developers are incentivized to take these projects up,” said Om Ahuja,
chief executive, residential services, Jones Lang La Salle, a property
advisory. In 2008, Mhada came out with a policy for redevelopment of
housing colonies, as part of which a builder would get an extra, or
incentive, FSI, which was capped at 2.5.

This incentive FSI was offered at a price and builders had to either pay
Mhada a premium equivalent to 40% of the ready reckoner price or share 67%
of the apartments they built using the incentive FSI. FSI indicates the
basic permissible construction on a plot of land. A ready reckoner is a
document published by the state government at the beginning of every
calendar year listing property rates across various areas used for charging
stamp duty on property transactions.

Subsequently, in 2010, the government made it mandatory for builders to
share housing stock with Mhada, even though in 2013 it altered the formula
to make it easier for builders. Still, most builders found this option
unviable and, as a result, a number of redevelopment projects failed to
take off. On Wednesday, 21 January, Maharashtra’s housing minister Prakash
Mehta indicated the government wants to reverse the previous government’s
decision.


“We will like to adopt a flexible approach on this issue and use any
revenue sharing formula which makes redevelopment projects get going,” said
Mehta. Developers don’t want to give up built-up area because then the
project becomes unviable, said Lalit Kumar Jain, chairman of the
Confederation of Real Estate Developers’ Association of India (Credai).
“...revenue-sharing is the only viable option, and it’s good that the
government is looking at this arrangement again,” said Jain.


Simpreet Singh, housing right activist and convener of Ghar Bachao Andolan,
opposed the new government’s stance. “The changes proposed by housing
minister are in line with the economic philosophy of BJP governments at
state and centre, which are more interested in serving interests of big
businesses rather than ensuring welfare of common man,” he said. Ghar Bacho
Andolan is a non-governmental organization which works for the housing
rights of the economically weaker sections in urban areas.


Vimal Shah, managing director, Hubtown Ltd, said, “Just like slum
redevelopment projects, Mhada housing redevelopment has its own set of
challenges.” There are several stakeholders in such projects and there
needs to be a clear-cut policy in terms of revenue-sharing arrangement so
that every party benefits from them, he said.
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