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MHADA won’t have to pay premium now on housing projects for mill workers

To date, MHADA has completed work on 10,152 houses at 11 locations using such concessions.

Written by Shalini Nair | Mumbai | Published: September 8, 2014 1:01:07 am

Giving in to a long-standing demand by the Maharashtra Housing and Area Development Authority (MHADA), the state government has granted a waiver to the housing board’s projects for mill workers from paying the premium amount on the fungible floor space index (FSI).

The payment for fungible FSI has been the bone of contention between MHADA, which is in charge of constructing homes for retrenched mill-workers families, and the Brihanmumbai Municipal Corporation (BMC), which grants building permissions. The civic body is allowed to charge a premium at 60 per cent of the ready reckoner rates in exchange for allowing an additional 35 per cent FSI in residential projects, a sore point with MHADA.

The state urban development department has now issued orders exempting the housing board from paying the premium amount.

In a series of letters to the state government, MHADA had objected to the charges on the grounds that if the housing board is forced to fork out an extra amount, it will lead to an increase in the construction cost, a burden that will have to be borne by mill workers who purchase the affordable homes. On the other hand, if the housing board decided to construct less without using the fungible FSI, it will fail to meet the housing shortfall.

Earlier this year, the housing board had proposed construction of 3,855 homes on erstwhile mill land plots. About 2,610 homes were earmarked for mill workers and 1,245 for transit tenements in Century mills, Prakash Cotton mill and Poddar mill at Lower Parel, Ruby mills at Dadar, Western India Mills at Parel and Jubilee mills in Sewri. However, the the BMC refused building permission for most of the project. For instance, in case of Century mills, the BMC refused to grant its nod to 537 of the proposed 2,103 houses unless MHADA paid the premium amount for the additional homes generated by use of fungible FSI.

“Under the fungible FSI norms, projects meant for rehabilitating those living in tenanted old dilapidated buildings in south Mumbai, slum-dwellers as well as the tenants who are housed under the cluster redevelopment schemes are exempt from paying the premium amount. Several of the concessions that are available to such rehabilitation schemes have been traditionally applicable to mill workers’ housing, then why not this waiver?” said a housing board official.

To date, MHADA has completed work on 10,152 houses at 11 locations using such concessions.

As per rules, a third of the open spaces in erstwhile mill land plots is handed over to the housing board, which in turn constructs homes for mill workers who were working in those mills prior to 1982. Such plots are also used to build transit tenements for temporarily housing those evicted from decrepit cessed tenanted properties of the island city.

MHADA was to initially receive 80 hectares of land from the 58 mills which would have been enough for providing affordable homes for the 1.70 lakh mill workers’ families. However, the state government amended norms allowing mill owners to pocket much of the share and MHADA ended up with little more than 10 hectares of land bank. This led to a spike in the estimated construction cost of mill workers’ homes as the only way to construct more houses was by building high-rises.

Officials said that if not for the latest waiver by the state government, the costs would have only soared.

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