Developers may get a slew of sops to generate rental housing stock

According to the draft rental housing policy shared with participants at the consultation, government land may be leased out to private developers to generate the housing stock under the scheme

Mumbai: The Maharashtra government is planning to offer a slew of sops to developers who generate rental housing stock in the state, Sanjeev Jaiswal, vice president and chief operating officer of the Maharashtra Housing and Area Development Authority (Mhada) said on Wednesday during a consultation on the draft state rental housing policy. The sops would include free additional Floor Space Index (FSI), loans at lower interest rates, property tax waiver, and nominal stamp duty and registration fees, Jaiswal told developers and other stakeholders during the consultation.

Developers may get a slew of sops to generate rental housing stock

The consultation was organised by Mhada, which has been appointed as the nodal authority for implementation of the rental housing scheme in Maharashtra, based on the ‘State Housing Policy-2025’.

“One of the components of the new housing policy of Maharashtra is rental housing, which always got excluded earlier,” Jaiswal said in his presentation. He then delineated the sops that would be offered to developers who generate rental housing stock – such as, additional 0.5 FSI and 0.3 FSI in Mumbai and the Mumbai Metropolitan Region, respectively, over and above the permissible FSI; 50% concession on development charges; 100% property tax waiver during the first five years and 50% waiver for the next five years; nominal stamp duty and registration fee of ₹500; 100% goods and services tax waiver and income tax exemption on the rent earned from housing stock; loans at 6% interest; and accelerated depreciation benefits on capital investments in rental housing projects.

According to the draft rental housing policy shared with participants at the consultation, government land may be leased out to private developers to generate the housing stock under the scheme. Both the tenant and developer would be permitted to exit the scheme by outright purchase of the housing unit.

Rental housing stock may also be created by converting unsold Mhada flats and government buildings into hostels and studios, amalgamating public plots, prioritising redevelopment of old buildings, utilising transit-oriented development, converting inclusive housing units into rental ones and deploying modular as well as prefabricated units for rapid and flexible rental accommodation, the draft policy says.

The policy proposes three tenurial categories for rental homes – short, spanning one to eight months; medium, spanning eight to 36 months; and long (permanent).

During the discussion on Wednesday, Niranjan Hiranandani, founder and chairman of the Hiranandani Group suggested that amending the Charitable and Religious Trusts Act and the policy on Corporate Social Responsibility (CSR) would boost rental housing stock creation.

“If the Act is amended, like the earlier decades when homes were built by private trusts, the same can be done. Also, CSR funds can be routed towards creation of rental homes. Benefits may also be provided to corporate houses and educational institutions which create rental housing units for their employees and students,” Hiranandani said during the consultation.

These suggestions were noted by Jaiswal, who is likely to share the same with the political brass.

Hiranandani also said that different kinds of rental homes would need to be tapped, such as affordable living, service apartments, co-living, students’ hostels, homes for construction and industrial workers, community housing for the IT sector and long-term transit housing.

Rajan Bandelkar, president, National Real Estate Development Council (NAREDCO) suggested that rental housing projects should be allowed in green zones and incentives should be extended to developers. But Jaiswal did not respond positively to the suggestion.