In an effort to promote cluster redevelopment in the city, the state cabinet on Tuesday approved a 50% reduction in premiums.
Deputy CM Devendra Fadnavis, who also oversees the housing portfolio, stated that the premium reduction will be in effect for only one year. "This is to ensure that people promptly come forward with projects for approval. If it is open-ended, the process can be lengthy," he explained. "The aim is to provide Mumbaikars with affordable homes, eliminating the need to seek housing outside the city. With reduced premiums and additional space, Mumbaikars will practically get a home for free in the city."
Domnic Romell, president of CREDAI-MCHI, a representative body for the housing industry, praised the decision, as it discourages fragmented development of standalone buildings lacking proper infrastructure while encouraging cluster redevelopment. "Cluster redevelopment results in wider roads, improved water supply, drainage systems... it ensures the overall improvement of an area's infrastructure," he noted.
Initially launched in 2009 as part of an urban redevelopment scheme for South Mumbai, cluster redevelopment has since expanded to cover all of Mumbai, Navi Mumbai, and Thane. However, it has struggled to gain momentum, with only a few projects in the city, the most notable being the 16-acre Bhendi Bazaar cluster redevelopment project.
Sandip Isore, a consultant for the real estate industry, explained that premiums for all construction projects are currently high. "Many developers are reluctant to take on cluster redevelopment due to financial constraints. This decision will encourage developers to participate as it offers better financial viability," he stated. "The BMC (Brihanmumbai Municipal Corporation) must also ensure speedy approvals, and most importantly, the government needs to build confidence among the people who are the key stakeholders of this project, so that they give their consent."
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