Sunday, Apr 26, 2015

Affordable housing stock to shrink with likely policy waiver

The policy required all builders to build 20% additional small flats in their redevelopment projects The policy required all builders to build 20% additional small flats in their redevelopment projects
Written by Shalini Nair | Mumbai | Published on:July 23, 2014 1:25 am

In what could deal a blow to the shrinking affordable housing stock in Mumbai, the state government has submitted before the Bombay High Court that the inclusive housing policy will be waived off for most redevelopment projects. The policy required all builders to construct 20 per cent additional small-sized apartments in their plots.

This means that redevelopment projects involving cessed buildings, housing board colonies, cluster schemes, slum rehabilitation and transit camps will no longer be required to build smaller apartments. These are projects where developers rehabilitate the existing occupants of the land on a portion of the plot while using the rest of the land as saleable component in the form of luxury residential projects.

The submission recorded by the court on Monday, while hearing a petition filed by DB Realty and few other developers, will effectively exempt most new constructions in Mumbai as the majority are redevelopment schemes.
The court has observed that as per a submission made by Advocate General of Maharashtra Darius Khambata, the state government will amend the policy regulation so that “provisions of inclusive housing shall not apply to projects under regulations” in the above mentioned redevelopment categories. Another amendment will be made so that instead of providing for inclusive housing in the same plot as their residential projects, developers can construct it elsewhere within the same municipal ward.

The draft notice of the inclusive housing policy was first issued in February 2012. It made it mandatory for all developers with residential projects on more than 2,000 sq m in Mumbai to construct additional 20 per cent built up area in smaller-sizes. These were to then be sold to the Maharashtra Housing and Area Development Authority (MHADA) at the construction cost so that the housing board could in turn release the homes through its annual lottery to those from the Economically Weaker Sections (EWS) and the Low Income Groups (LIG).

The draft notice was kept on hold for a year and a half after the real estate body, Maharashtra Chamber of Housing Industry, made a representation to Chief Minister Prithviraj Chavan seeking concessions in the rules. When the final notification was at last passed in November 2013, projects below 4,000 sq m were exempted from the rule.

Housing experts pointed out that the state government’s stand would defeat the purpose of the inclusive housing policy. “The policy is meant to ensure that an area such as Malabar Hill, where there are 10,000 sq ft apartments, should also have affordable homes that are sized between 250 and 500 sq ft,” said urban planning expert Shirish Patel. He added that nations such as the United States, Canada, France, Italy, Netherland, Portugal and England require the inclusive housing component to be at least 25 per cent. “The norm is that these houses are created …continued »

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