Builders shy away from Mhada revamp projects

The state housing authority’s novel plan to replenish its housing stock — by asking builders to give ready-made flats to the Maharashtra Housing and Area Development Authority (Mhada) while undertaking redevelopment projects in its colonies — seems to have come to naught.

The state housing authority’s novel plan to replenish its housing stock — by asking builders to give ready-made flats to the Maharashtra Housing and Area Development Authority (Mhada) while undertaking redevelopment projects in its colonies — seems to have come to naught. The agency had received just 18 proposals for redevelopment projects in the last two years, after the plan was implemented.

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This is in sharp contrast to 2008-10, when 409 proposals were approved. During this period, builders had to just pay the agency a meagre premium while revamping colonies.

In September 2010, faced with shortage of land for redevelopment projects, Mhada decided to make it compulsory for builders to share built-up area with the state agency. A private builder undertaking a redevelopment project on Mhada homes is given additional Floor Space Index (FSI) as incentive, which can be used to construct homes for commercial sale. Two-thirds of the additional stock built using the incentive FSI needs to be given to Mhada, while the rest can be sold at commercial rates.

However, builders said they cannot afford to give away houses. “We have to give residents bigger homes free of cost and a good corpus fund. It is not feasible for us to also give ready-made houses to Mhada,” said Anand Gupta, secretary, Builders’ Association of India (BAI).

Residents and housing activists said builders are shying away from revamp projects owing to this clause. “There is no point in being stubborn about the plan because it is residents who suffer,” said Ramesh Prabhu, chairman, Maharashtra Societies Welfare Association (MSWA).

Mhada officials, however, stand firm on the proposal. “Since we are the landlords, we are entitled to our share,” said former senior MHADA board member Alwyn Das.
Another senior official said: “This is the best way to generate a handsome housing stock. The builders are just waiting for the rules to change so that they don’t have to give flats away.”