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State’s plan to create 5.5 lakh affordable homes in Mumbai just a grand promise, say experts

Property experts and activists sceptical as a similar plan made in 2010 has seen no movement; builders say it can be achieved

mumbai Updated: Feb 20, 2018 16:10 IST
Naresh Kamath
Naresh Kamath
Hindustan Times
Mumbai,MMR,afforable home
The Maharashtra government may has inked an MoU with builders to create 5 lakh affordable houses in Mumbai Metropolitan Region by 2022(HT File Photo)

The Maharashtra government may have announced that it will create 5.5 lakh affordable houses in Mumbai Metropolitan Region (MMR) by 2022 — for which it has signed a partnership with developers at the Magnetic Maharashtra conclave — but will these grand plans materialise? Experts don’t think so, though builders argue that it can be achieved.

In 2010, a similar Memorandum of Understanding (MoU) was signed between the state government and the Maharashtra Chambers of Housing Industry (MCHI) for five lakh houses, but eight years later, not a single housing unit has come up.

Currently 40,000 to 50,000 houses are launched in the MMR annually, and this needs to doubled to meet the target.

Builders believe that this government means business.“We have witnessed how the ease of doing business and the approval process have improved over the past one year. This target is possible,” said Niranjan Hiranandani, national president, National Real Estate Development Council (NAREDCO).

Experts remain sceptical. Pankaj Kapoor, CEO of real estate research firm Liases Foras, said unsold inventory is a major issue. “There is an unsold inventory of 2.7 lakh homes in MMR, and these need to be sold. Just adding new houses will serve no purpose,” Kapoor said.

Another problem with constructing affordable houses is that often they are built in unliveable areas, places that have no infrastructure. “There is no point in constructing houses in areas with hardly any economic activity. Such areas have neither got proper transport facilities nor social infrastructure for residents,” said Kapoor.

Noted housing activist Vinod Sampat believes that the real problem would be lack of sincerity on the side of the builders and the state. “For years, we have seen builders misusing all incentives and taking homebuyers for a ride,” said Sampat. “If the government is sincere, it should lower taxes and premiums as it is a huge burden for homebuyers.”

The MoU signed on Monday is similar to the one signed in 2010 between the government and the MCHI, with conditions such as builders constructing the affordable houses on their land and the government working to ease approvals. Nayan Shah, president (elect) of MCHI-CREDAI, admitted that some teething issues remain.“This is just a beginning. We will be holding talks with the government to thrash out issues and arrive at solutions,” he said.

Shah claimed the unsold inventory figure of 2.7 lakh units is highly exaggerated. “There is hardly any stock of readymade unsold houses in the market; even the figures for under-construction houses are misleading.”

First Published: Feb 20, 2018 14:49 IST