August 25, 2019 1:55:35 am
At a time when the country’s costliest real estate market —Mumbai Metropolitan Region (MMR) — is grappling with a surplus of unsold homes, another 3.57 lakh homes in the affordable housing segment will soon hit the market, further widening the demand-supply gap.
Warming up to buildable area and fiscal benefits being offered under the Centre’s flagship Pradhan Mantri Awas Yojana (PMAY) scheme, big land owners or developers in villages in Thane, Raigad and Palghar districts in the MMR are building homes for the economical weaker and low income segments.
Under the PMAY scheme, the Maharashtra government has so far sanctioned the construction of 5,63,476 houses for the weaker sections on government and private lands in partnership with builders across the state. Of these, 3,57,327 houses (or roughly 63 per cent) are coming up in Thane, Raigad and Palghar districts alone.
At last count, the unsold inventory in the MMR was a high 2.24 lakh units. Also, nearly 60 per cent of the region’s unsold stock — about a third of which is in Thane and Navi Mumbai alone — is in the affordable and the mid segment of units priced less than Rs 80 lakh.
Struggling to meet the target of building 19.4 lakh affordable homes by 2022, the government had first opened doors for private land owners to participate in the government’s ‘Housing for All’ initiative under PMAY last January. Those using their land for building projects for economically weaker sections and low income groups — apartment sizes: 30 sq m for EWS and 60 sq m for LIG — and agreeing to sell 50 per cent of the houses at the construction cost or the plot’s ready reckoner value are entitled to buildable area or floor space index (FSI) incentives. FSI is a development tool that defines the extent of construction permissible on a plot.
Additionally, the government has also agreed to subside the cost of houses of each of the beneficiary by Rs 2.5 lakh.
Since then, as many 107 private projects — 75 per cent of which are in the MMR — have been approved under the category. Under the government’s incentivisation policy, such projects are entitled to an FSI of 2.5 (2.5 times the plot area) in residential zones. More importantly, the government, in a bid to unlock more lands for such construction, has also permitted tapping of green or no-development zones raising their FSI from 0.2 to 1.
Most such projects in the MMR are coming up on green lands. “With low FSI levels, these lands were previously locked for development. Land owners and developers are opting for PMAY as it allows them to utilise the full potential of their parcel,” admitted an official.
According to government’s town planners, these green lands — mainly located outside the municipal limits — were originally meant to serve as a buffer zone to preserve the environment against rampant urbanisation.
Of the 5,63,476 houses, roughly 42 per cent (or 2,37,142) are coming up on private lands. Also, most of the government driven housing under the same scheme — 141 projects, 3.26 lakh houses — are also coming up in the same area. In comparison, only two projects — totalling 2,825 houses – have been sanctioned in Mumbai, where land costs is among the highest in India. “There aren’t many takers for the scheme within the Mumbai city limits,” an official said.
Just as the government claims that the new projects will augment the overall affordable housing stock, market experts have questioned the decision to clear so many projects in three districts. Even within the government some have opined that there is a need to map the housing requirement district-wise before sanctioning new projects in the MMR, with a few fearing the impact the additional housing stock would have on the struggling real estate market.
Ironically, senior officials confirmed that the state’s housing department has proposed to lift some more curbs on the construction of such projects outside the municipal limits in the MMR.
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