A mandate for affordable housing

Since its inception in 1976,MHADA has till date,provided shelter to over 1 million people in the state,according to official figures. Lately,however,MHADA has been at the receiving end for being lethargic and for the snail’s pace of progress. Barring a few exceptions in the city of Mumbai,there is hardly any project that the authority has undertaken recently.

Leaving aside affordable housing,the various boards under the authority have failed to provide any kind of housing to the urban population.

The reason being that MHADA does not have enough land to build houses on. Its land resources have dwindled over the years and whatever land it owns has been caught up in legal tangles or environmental complications.

LAND WOES

There were four major sources of land for the authority. First,and most important,was land allotted by the state government under the Urban Land Ceiling Act (ULCRA),1976. This option is currently non-existent due to the repeal of the Act.

Second,by way of compulsory land acquisition under Section 41 of the MHADA Act.

Third,the land it gets from the government’s land bank and fourth,land allotted for development of affordable housing under the development plans of the concerned municipal corporation.

These have not been without their problems. In the case of compulsory acquisition the authority has always faced strong resistance from the land owners,for the compensation paid was a pittance as compared to market rates. The matter lands at the doors of the court and the housing project gets held up for years.

Land from the government’s land bank is now almost exhausted. In addition,there are competing demands from schools,hospitals,government departments etc.

Similarly,land under development plans of the municipal corporations are prone to litigation.

“This leaves MHADA with very little land that is actually ‘available’ for development,” says Rajendra Nimbalkar,CEO,Pune Board. He gives the example of the Pune Board that although owns over 50 hectares of land in the city,has only 10 hectares available for development as the remaining 40 hectares are under various disputes.

As an example,the land audit carried out in Mumbai in 2010 revealed that MHADA owned a total of 123 hectares of land. Out of this,109 hectares came under the coastal zone area and could not be constructed upon. Another 12 hectares was stuck in myriad issues ranging from illegal encroachment to construction of facilities such as hospital,school etc. MHADA was finally left with only 2 hectares of land near Khandivali that was actually available for development.

While MHADA is struggling to come up with new housing projects,the demands of affordable housing is continuously on the rise and the authority is currently doing little to meet its stated objective.

“The demand for housing in cities like Mumbai and Pune is growing very fast,especially for homes priced between Rs 20-30 lakh. The commercial builders are scarcely serving this group. There is vast opportunity for MHADA to provide affordable homes to the LIG and MIG families,” said Shashi Prabhu,a Mumbai-based housing expert.

The demand is evident from MHADA’s affordable housing scheme in Mumbai last year where 1.9 lakh applications were received for 3,836 flats.

ENTERING THE MARKET

In what is being seen as a major policy shift earlier this week,MHADA declared that it would now enter the open market and would buy the land at ‘market price’ rather than depending on government subsidised land.

“Considering the land shortage and delays in our projects due to land acquisition issues and opposition to land acquisition at lower rates by the owners,we have come to the conclusion that we have no other option but buying land at prevailing market prices from private sources,” said Nimbalkar.

The authority would acquire land from private sources for developing housing schemes. Three types of land would be selected for acquisition: Land that can be developed immediately,secondly those that can be developed in the next five years and lastly,land that can be developed within the next 10 years.

A committee chaired by the CEOs of the constituent boards would negotiate with land owners who will be paid at the prevailing price for the land.

Experts have welcomed MHADA’s move to buy land at the market prices saying that it had to resort this sooner or later. “The repeal of ULCRA has deprived the government of one instrument to acquire land. Acquisition through other ways is a slow,tedious process and involves legal complications. MHADA was left with no other option. If done judiciously and honestly it can result into providing shelters to urban poor,” said Chandrashekhar Prabhu,a housing expert and former chairperson of MHADA.

2.5 FSI BOOST

The decision by the state government to allow 2.5 FSI (floor space index) in cities for development of affordable houses and redevelopment of dilapidated colonies by MHADA has given a boost to the agency.

“For MHADA to provide affordable housing at a lower cost than that of private builders,the agency must get subsidy of some form so that the cost of production for MHADA is lower than the private developers thus enabling it to sell tenements at lower price than the builders. It can either be getting land at subsidised rates or by allowing MHADA to build more than the private owners. Allowing us higher FSI is just the thing we were waiting for. It will allow us to make available low cost to the different class of people even though we buy land market prices,” said Nimbalkar.

THE PUNE INITIATIVE

For last few years the Pune board of MHADA has been a laggard if one goes by the the number of dwellings produced every year.

As per the Economic Survey of Maharashtra,in the year 2010-11 while the Mumbai and Konkan boards of MHADA constructed 8,614 and 1,574 tenements respectively the Pune board could construct only 329 dwellings during the year,which is the lowest in the state.

But post MHADA’s adoption of the new land acquisition policy Pune is the first board that has swung into action declaring extensive plan and innovative method to attract private land owners.

The board has also earmarked Rs 450 crore for acquiring land in the next two years. To woo the land owners to sell their land to MHADA rather than to private builders,the board is promising the land owners payment of a lump sum amount within 60 days of the deal.

A phone call to the MHADA office or a text message stating ‘LAND’ to its designated mobile number would be enough to initiate the deal.

—atikh.rashid@expressindia.com