Mhada turns to private builders to construct low-cost homes in Mumbai | mumbai | Hindustan Times
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Mhada turns to private builders to construct low-cost homes in Mumbai

mumbai Updated: Oct 05, 2015 01:44 IST
Naresh  Kamath
Low cost homes

Mhada hopes a joint venture with private builders will help generate more affordable homes.(Hindustan Times)

As the demand for affordable homes grows across the state, Mhada – grappling with having little land to build these homes – has decided to work with private builders.

Under a joint venture (JV) scheme, the Maharashtra Housing and Area Development Authority (Mhada) will give builders who own a land parcel a floor space index (FSI) of 3, and in return, the builders will give Mhada ready-made flats. The housing authority will then sell these flats at low rates through its computerised lottery system.

It’s a plan that benefits both sides, said Sambhaji S Zende, vice president and CEO, Mhada. “The builder will get additional FSI, while we get low cost houses,” said Zende.

Private builders are only allowed an FSI of 1, while Mhada is allowed a 3 FSI for building homes. In case of a joint venture, the builder can use his 1 FSI to build homes according to his own design and sell them in the open market. Of the remaining FSI, the builder must construct houses according to Mhada’s specifications (mostly smaller units) on an FSI of 1. This too can be sold in the open market. The houses built on the remaining 1 FSI must be handed over to Mhada and will be paid for by the government.

The joint venture policy was first mooted in 2010 under then CM Ashok Chavan, and Mhada had kept aside Rs200 crore to fund the scheme, but it was junked by his successor Prithviraj Chavan. The housing body has introduced changes and is waiting for a formal clearance from the state government.

Zende said the main focus is to generate many more smaller-sized apartments.

Builders too have welcomed the scheme. “We are always ready to assist the state for any venture that creates affordable houses. Our only contention is that rules should be simplified and must be consistent,” said Paras Gundecha, chairman and managing director, Gundecha Group.