Mumbai's affordable housing scheme gets few takers

15 Apr 2013 CW Staff

There have been just two proposals from developers in this region for creating affordable houses under the rental housing scheme. Of the two, only one could be approved as per norms. The scheme was market-based.

Wherever there was enough market demand, real estate developers submitted proposals to construct houses under this scheme. The response in the Mumbra-Shilphata region in particular might be low because, developers tend to agglomerate in clusters and probably there is paucity of continuous stretches of vacant land there, said Uma Adusumilli, Chief of the rental housing project, being implemented by MMRDA.

Earlier this month, the collapse of an illegal building in Mumbra had brought to light the rampant growth of unauthorised structures in the Mumbra-Shil Phata belt. The sole scheme approved in this region is by the Dosti Group at Mumbra junction. It is likely to yield about 1,800 units for affordable housing. The only other proposal could not qualify as the developer did not have a continuous plot.

Rajesh Prajapati, president of MCHI-CREDAI's Raigad unit, said the price builders get in this area is lower than the cost of construction that they incur in a rental housing project. To use the FSI of 4 under this scheme, the building has to be at least 30-storeyed and the cost of construction comes to at least Rs 3,000 per sq ft.

Looking at the cost overruns and other issues, the cost that the developer will want to sell at will be Rs 5,500-6,000 per sq ft. The market is not able to sustain such a high price, Prajapati said. He added that the soil in that region is mostly clay and a building foundation has to go very deep, raising the cost of construction.

The rental housing scheme was floated in October 2008 with the intention of creating five lakh affordable houses within five years. However, so far MMRDA has approved only 54 schemes across MMR.

Response for the Maharashtra government's rental housing scheme, aimed at stemming slum proliferation and preventing unauthorised structures from sprouting in Mumbai city's metropolitan region, has so far been dismal in the Mumbra-Shilphata belt, an area that probably needed the scheme the most. There have been just two proposals from developers in this region for creating affordable houses under the rental housing scheme. Of the two, only one could be approved as per norms. The scheme was market-based. Wherever there was enough market demand, real estate developers submitted proposals to construct houses under this scheme. The response in the Mumbra-Shilphata region in particular might be low because, developers tend to agglomerate in clusters and probably there is paucity of continuous stretches of vacant land there, said Uma Adusumilli, Chief of the rental housing project, being implemented by MMRDA. Earlier this month, the collapse of an illegal building in Mumbra had brought to light the rampant growth of unauthorised structures in the Mumbra-Shil Phata belt. The sole scheme approved in this region is by the Dosti Group at Mumbra junction. It is likely to yield about 1,800 units for affordable housing. The only other proposal could not qualify as the developer did not have a continuous plot. Rajesh Prajapati, president of MCHI-CREDAI's Raigad unit, said the price builders get in this area is lower than the cost of construction that they incur in a rental housing project. To use the FSI of 4 under this scheme, the building has to be at least 30-storeyed and the cost of construction comes to at least Rs 3,000 per sq ft. Looking at the cost overruns and other issues, the cost that the developer will want to sell at will be Rs 5,500-6,000 per sq ft. The market is not able to sustain such a high price, Prajapati said. He added that the soil in that region is mostly clay and a building foundation has to go very deep, raising the cost of construction. The rental housing scheme was floated in October 2008 with the intention of creating five lakh affordable houses within five years. However, so far MMRDA has approved only 54 schemes across MMR.