South Mumbai gets affordable
MHADA has now made it cheaper for developers to invest in redevelopment projects in South Mumbai. This directly translates to affordable homes being provided to the common man in the heart of the city.
Do you live in a small house in South Mumbai? Or maybe in an old building and have no other choice but to move to the suburbs if you want live in a bigger home? You just might not have to move out of your prized location anymore. With the focus on affordable housing as well as 'Housing for All', the city's biggest planning body - Maharashtra Housing and Area Development Authority (MHADA) is set to take a decision that might bring relief to those searching for a home in Mumbai.
MHADA plans to reduce the premium on redevelopment projects from 50 percent to 35 percent. This is to attract developers who might have been wary due to the high premium, even if they were interested in a re-development project. This means that the 114 MHADA layouts that are undergoing cluster redevelopment might have more takers among developers and in turn cement the State's plan to provide affordable housing in South Mumbai.
The body has brought down the premium to a mere 8.5 percent for buildings that will be under and up to 70 meters in height, from the earlier 22.5 percent. For buildings above 70 meters, a payment plan staggered across five years for the premiums has been drawn up instead of the one-time payment that was earlier required.
Now, developers will be asked to pay 10 percent for constructing in areas under its jurisdiction, for the first year and then will be charged 8.5 percent for the remaining four years.
A senior officer from MHADA says, "Requests were made from many developers to allow the premium payment to be made in installments. They have also said that there is already a severe cash crunch in the market and that there must be a reduction in the interest on the same premiums; hence, we have issued a circular, which clearly explains the new premium policy of MHADA."
He further adds, "Many projects of cess buildings have been stuck due to failure by developers in paying the premium, so we hope that the new policy will speed up the redevelopment project."
Another officer from MHADA's finance department says, "The new decision will make a loss of nearly Rs 50 crore per annum to MHADA. But, the decision has been made, so there is relief somewhere that the construction work won't stop."
Currently, MHADA is a special planning authority for its layout, and under MHADA, there are 114 layouts, which have nearly four thousand apartments. It is also the planning authority for 19,107 cessed buildings that need redevelopment as soon as possible. "To attract developers for the redevelopment of projects, the policy needed amendment, which we have now accomplished,"
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