As the realty rates soar making homes unaffordable, a group of housing activists have taken an initiative to construct low-cost houses using the old model of cooperative society.
Under the four-decade-old model, a group of people come together, pool in money and build houses themselves. The first project will be launched on August 15 in Vasai under the banner of Affordable Housing Welfare Organisation Of India (AHWOI).
Ramesh Prabhu, chairman, AHWOI, said the scheme is a boon for homebuyers who cannot afford to buy in the current market. "The flats will be cheaper than those from private builders while we would also arrange for loans," said Prabhu.
He said the 100 apartments would be sold on the basis of carpet area unlike private builders who sell on the basis of super built-up area. The buyers will save 40 per cent on the flat's cost. Carpet area is the usable area in the apartment between the walls. The super built-up area includes common areas such as staircase, elevators and garden.
The houses will range from Rs 7.5 lakh-10 lakh for 300-sq ft house and Rs 20 lakh for a 500-sq ft apartment. The cooperative society was started in 1920 with Talmakiwadi at Tardeo being the first such society to adopt the model. It became a rage from 1960 till the 80s where about 10,000 societies built 5 lakh flats in Mumbai and Thane.
In this scheme, AHWOI will purchase the plot and buyers will have to deposit 20 per cent of the total amount as the booking amount. AHWOI will arrange for a loan to fund the rest of the 80 per cent payment and the also stand a guarantee for the buyer. The homes will be constructed within two years after which it would be given to the buyers.
The buyers will pay 20 per cent of the total cost of the flat to AHWOI as professional fee for the project. In this scheme, 50 flats will be sold to Maharashtrians and the rest to others. Real estate experts termed this move an alternative method to create housing stock.
"The idea seems good and the best thing is one does not have to depend on builders," said Pankaj Kapoor, MD, Liasas Foras, a leading real estate research firm. He cautioned that though everything looks good on paper, the actual implementation is a challenge.