How important is one-third of your salary in your monthly budget? Calculating the amount is important, because you may have to pay it as rent for your cessed structure, if the proposed housing policy goes through.
The policy, which makes several amendments to the Maharashtra Rent Control Act, 1999, plans to hike the rents manifold for around 4lakh households and an equal number of commercial establishments occupying cessed properties in the city. Although the policy makes a provision to ensure the rent amount does not cross 30% of your income level — a first instance of linking rent to income — paying one-third of the salary, too, will not be a feasible option for most.
Currently, the rent for cessed properties is Rs200-Rs300 a month. But the new policy excludes homes with an area of more than 860 sqft and commercial spaces that are more than 500 sqft from the purview of the Act, lifting the cap on the rent. Empowered with the new Act, the policy proposes to hike the amount initially to 50% of the property’s market rent, and to 100% of the market rent after three years.
Slamming the linking of income levels of tenants to the rent, activist Utsal Karani said, “How will the state ensure that they are given correct information on the income levels of tenants? Such controls will only increase bureaucracy and red-tape.”
Rajendra Mehta, Property Lessors’ Association, said, “We wanted the rental value to be multiplied by 15, which was a realistic demand. The state’s proposal multiplies it by hundreds or thousands. This will hit the poor very hard and force them to leave.”
Mehta said tenants from Girgaum and Dadar will suffer the most. “Many of these tenancies have been passed on by inheritance. It is wrong to classify them according to their area and hike the rental. Many of these are lower income households,” he said.
To boost development of cessed buildings, many of which are dilapidated, the policy proposes to hand over the repair and maintenance of the structures to the landlords, and not the Maharashtra Housing and Area Development Authority (Mhada).
Viren Shah, president, Federation of Retail Traders’ Welfare Association, said they will protest against the move. “Around 95% of the nearly 4-lakh shops are above 500-sqft in size. The policy will affect them adversely. Only the builders’ lobby will benefit from the move.”