Maharashtra Government Attracts Investors with New Rental Housing Scheme

July 21, 2015 | Last Modified: July 21, 2015 at 12:37 pm

The Maharashtra Government is actively reintroducing its Rental Housing Scheme in Mumbai. The primary objective of this scheme is to provide affordable housing to the poor.

Mumbai, the financial capital of India, is home to the country’s most celebrated movie stars, entrepreneurs, and billionaires. This is a small percentage considering the other side of the scale, which consists of an estimated 52% of the population that lives in slums. That means roughly about 60 lakh people are housed in 12 lakh slums. These numbers necessitate the rehabilitation of slum dwellers to improve their living conditions.

Key Features of the Scheme

While the previous government formulated the plan, it failed to materialize because the properties were far away from the city and involved a long, tedious commute. The lack of interest from private developers also led to its fall. The current scheme has modified and upgraded the norms noting the failure of the older scheme.

  1. The new scheme will increase the size of the housing units from 160 sq. ft. to 280 sq. ft.
  2. According to officials, the Floor Space Index (FSI) will be between 3 and 4, up from 3 earlier. Any additional FSI will follow a premium of 60% of ready reckoner rate from the developer. FSI is the ratio of a building’s total floor area to the size of the land on which it is built.
  3. Slum Rehabilitation Authority (SRA) eligibility cards will be provided to slum dwellers and rehabilitated. Those excluded from this will be included in the rental-housing scheme.
  4. 32 rental housing schemes are located in municipals while 19 are located in the U1, U2 areas of the Mumbai Metropolis.
  5. 50% of Rental Housing Units (RHUs) will be used to rehabilitate occupants in run-down and derelict buildings. The remaining 50% is under formulation at the Government level.
  6. Private builder allotted lands in these schemes are free to build other flats for sale, but 25% of the built-up area has to be reserved for rental housing. These liberal policies ensure active participation from builders and investors.
  7. The government has also announced higher taxes for unoccupied houses, which may open up about 5 lakh houses for rental housing.

In November 2013, the original rental-housing scheme was revamped into an affordable housing scheme. Here, private developers received additional FSI as an incentive for providing residences of 160 sq. ft. to Mumbai Metropolitan Region Development Authority (MMRDA) free of cost. These houses would then be allotted to low-income households. This scheme was to be implemented by the Maharashtra Housing and Development Authority, Slum Rehabilitation Authority (SRA), and MMRDA.

Advantages of the Scheme

  1. Unlike the previous scheme, there is no restriction on the size of houses that are built.
  2. Reduction of slum clusters, which leads to a better standard of living for the underprivileged.
  3. The scheme extends to Mumbai, Navi Mumbai, and Thane with a few extensions in suburbs such as Virar and Karjat. This ensures access to better amenities.
  4. The connectivity of these housing complexes to the industrial hubs boosts job opportunities.
  5. Rental housing in luxurious homes is ideal for people who want a comfortable living space at a lower cost.
  6. Utilization of unsold properties reduces the pressure to build new homes that are supplied with resources that go unused.

The introduction of the Rental Housing Scheme is a relief to both the middle and lower class population who cannot afford to splurge on property or move to different cities in search of employment. Not only will the scheme curb the expansion of slums, but will also provide a better standard of living.