Struggling to meet the target to build 19.4 lakh affordable homes by 2022, the BJP-led Maharashtra government on Tuesday dished out fresh sop for affordable housing projects on private lands. To bring more construction projects within the ambit of the government scheme, the state cabinet gave its nod to a proposal to extend floor space index (FSI) benefits even to middle income group (MIG) housing projects in this category.
In January, the Devendra Fadnavis government had opened doors for private builders to participate in the government’s “Housing for All” scheme under the Centre’s Pradhan Mantri Awaas Yojana (PMAY). Accordingly, builders utilising their own land for construction of homes for the economically weaker sections and the low-income segment were extended FSI incentives if they agreed to the condition that 50 per cent of the homes would be sold at rates determined by the Maharashtra Housing and Area Development Authority (MHADA). It was later revised to construction cost of homes or the Ready Reckoner rates, whichever is lower.
FSI is a tool that defines the extent of construction permissible on a plot. Under the government’s incentive policy, such projects were eligible for an FSI of 2.5 (2.5 times the plot area) in residential zones. To release more land for the development of such projects, the FSI for such projects in no-development zones was also raised from 0.2 to 1.
On Tuesday, the state cabinet agreed to a proposal to extend the same benefits to middle-income group (MIG) housing projects in this segment. Under the Centre’s PMAY norms, the MIG category includes homes of 160 sqm-200 sqm carpet area (1,722 sqft- 2,153 sqft) with certain riders.
Housing Minister Prakash Mehta, when contacted, confirmed that cabinet had approved the proposal.
But he added that the sop won’t be extended universally in such bigger home segments, but only for cases when there was a need for viability purposes. Sources said that another condition that all houses be sold at predetermined rates is expected to be imposed.
Incidentally, the Chief Minister-led Urban Development (UD) department has strongly opposed the move. It has contended that extended FSI perks to the MIG segment would mean that almost all projects in the Mumbai Metropolitan Region (MMR) and other major cities can vie for it. In an official communication, it has also argued that it would lead to burdening of the city’s infrastructure. Despite the department’s objection, the proposal was approved, confirmed Mehta.
The contentious move was part of a larger proposal for the setting up of a separate housing corporation- the Maharashtra Housing Development Corporation- for overseeing the implementation of the “Housing for All” initiative in the state. A 15-man directorial board headed by the Chief Minister will lead the corporation.
Meanwhile, on Tuesday, Fadnavis separately cleared a proposal modifying the condition regarding pricing of homes for 50 per cent of the affordable units on private lands.
In instances where the Ready Reckoner rate is lower than the construction cost, the government has now decided to permit a 10 per cent increase in the sale price where the difference between the two rates is less than 30 per cent, and 20 per cent in cases where it is even higher.