To fulfill the promise of “houses for all”, the Maharashtra government has commissioned MHADA (Maharashtra Housing And Area Development Authority) to conduct a city-wise survey to figure out the shortage of houses in the state. MHADA is required to complete the survey in six months.
In the New Housing Policy and Action Plan, 2015, the government has proposed that the unused and underutilised land resources of the state, and state-owned organisations, such as MIDC, Mahasagar Dairy, ULBs, CIDCO, MHADA and MMRDA, be pooled together.
The policy said, “The key factor affecting affordability of housing is the cost of land. Land available with the government should act as a catalyst in the process.” After MHADA has identified the land parcels in the state, it will be placed before the Cabinet for approval. So far, developers who have undertaken affordable housing projects had to form joint development agreements with land owners in the outer peripheral regions of the cities.
Tata Housing, the real estate arm of Tata Group, had started affordable housing project in Bohisar, 80 km away from south Mumbai. Laying the necessary infrastructure and construction cost reduced the company’s margins to 15-20%, said Brotin Banerjee, the managing director of Tata Housing.
“Recycling land parcels will mean that the urban infrastructure will not have to be stretched,” said Anuj Puri, the country head at JLL India. State-owned land parcels are often centrally located, historically inherited; these parcels have high value for compatible uses today, Puri added.
It has, however, been clarified that the ready reckoner rate will apply when these parcels are bought by develpers to build affordable housing. The government also elaborates the affordable housing stock created will be allocated to the EWS, LIG and MIG sections in equal ratio of 30%.
Along with making input costs cheaper, the government has also proposed to reduce stamp duty charges to improve the purchasing power of buyers who fall in the categories mentioned above. According to the proposal, EWS units will pay 1% of the market rate whereas LIG and MIG unit holders will be levied 2% and 3% charges, respectively.
Additionally, a fund, with an initial corpus of R1,000 crore to provide finance to the home buyers of the EWS/LIG category has been proposed to be set up.
Developers who have so far refrained themselves from building affordable houses have been incentivised with a grant of additional FSI (floor space index), which determines the developable area on a plot of land, for construction of tenements of a specified size. The additional FSI will be excluding the area of staircase, lift and lobby, which is permitted free of FSI on payment of premium to the municipal corporation. The FSI, which will be provided to incentivize developers, shall exclude fungible FSI, as permissable.
Apart from freeing up government land, the policy has outlined provisions for the development of town planning schemes and special townships in the MMR (Mumbai Metropolitan Region). In such projects, 60% houses will be allotted to the EWS and LIG category whereas 30% dwellings will be reserved for the MIG category.