Citizens' Issues
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Housing for All: Slogan vs Action

Mumbai’s real estate remains just as manipulated under the new government

 

Mumbai, one of the world’s most crowded cities, is also known for the most expensive real estate in the world combined with a huge housing shortage. Yet, for the past three years, the industry is in a slump because prices have been hiked to a point where demand has dried up. Thanks to the lack of decisive action by banks, prices have failed to decline making property affordable again. In addition, constant changes in government policies and action against illegal construction have meant that nearly-completed buildings have remained without final clearances for as long as six to eight years, with no impact on prices. It is in this environment that the Maharashtra chief minister, Devendra Fadnavis, announced his ‘Housing for All’ initiative in May this year. The programme proposes construction of 1.9 million affordable homes by 2022.  
 
While the idea is laudable, it is likely to be stymied by the government’s confused policies, the controversial Development Plan that may be re-written from scratch after widespread protests, and a TDR (transfer of development rights) racket that is being run by a builder-cartel. These builders have possible links to the 2G scam accused.
 
Real estate sources say that policy changes have allowed this cartel to monopolise the TDR. TDR is a unique tool that allows the excess floor space available on some plots of land to be sold like a tradable commodity. TDR rates in Mumbai used to be in the region of Rs22,000 per square metre (sqm), until just over a year ago. Realty sources say that TDR is now controlled through dubious strategies. 
 
One example of their action is a tender for 30,000sqm of TDR to be issued through three schemes by MMRDA (Mumbai Metropolitan Region Development Authority). The cartel set out to destroy the tender by bidding at double the market rate for TDR, but for a mere 6% of the TDR on offer. This left the government with two choices. It has to either scrap the tender, or persuade other bidders to match the prices. Since no builder will agree to pay twice the price for TDR, the sale is automatically scuttled and the cartel wins. 
 
At the time of writing this article, the tender is on the verge of being scrapped. If the Bharatiya Janata Party (BJP) government is serious about economic development, it will have to crack down on land sharks that have kept Mumbai’s realty prices abnormal and prevented trans-harbour connectivity to the hinterland for over 50 years. Unfortunately, the cartel is rumoured to have the support of one of BJP’s powerful national leaders. 

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COMMENTS

manoharlalsharma

2 years ago

Housing for All: Slogan vs Action./purpose is high lighted the BIRTH OF CIDCO in Mahabharata but after allotting mare 10% development 90% land sold to BUILDERS the purpose veined and BUILDERS have taken ROUTE as the ire POSSESSION on land bank.still time left to REORGANIZE.

J Pinto

2 years ago

Playing with land regulation is the single biggest source of profiteering by politicians and top govenment personnel with insider information.

When politicians become sanyasis we can expect this to end.

By Sanyasis I do not mean the Baba Ramdev's and his saffron clad peers in the present Government.

Shirish Sadanand Shanbhag

2 years ago

Housing for all it worst scheme, which Govt of Maharashtra or Govt of India will not successfully launch, for following reasons.

(1) Govt has no database, to know, who has his/her own house in Mumbai or Mumbai metropolitan region area.

(2) Govt. has no land in Mumbai and in most of Metropolitan area. Existing land of MHADA and CIDCO are all sold to the builders, instead of developing the land to constuct the affordable flats themselves.

(3) All MHADA and CIDCO buildings are allowed to redevelop as their Co-op. Hsg. Stys (CHS) like, by appointing their own private builders.
Even in above type of redevelopments, MHADA or CIDCO has not asked some percentage of flats at construction costs from such CHSs, for allotting them to needy people.

(4) Like price control on commodities, Govt. has no control on prices of the houses. Builders make 200% to 500% profit on their construction, depending upon the region.

(5) Let there be some people's movement, as it has happened in the past, by Late Mrinal Gore, by establishing Nagari Nivara Parishad, an NGO, to construct affordable houses, at Goregaon East, Mumbai-400063

REPLY

Rajendra M Ganatra

In Reply to Shirish Sadanand Shanbhag 2 years ago

Great observations. Even now the government can retrieve situation if it is serious. The government has to acquire land, adopt high class town planning, construct quality houses through construction contracts awarded though transparent bidding, ensure efficient monitoring, and sell flats at low prices. Safeguards can always be built in to avoid unscrupulous trades. But governments always throw figures without any feasibility studies, and the corruption and lack of commitments remain the government hallmarks.

Banks have allowed the builders to borrow incessantly and have no will to discipline the errant builders.

Are Balanced Schemes Worth Considering?
Or does the SIP of a diversified scheme do the job well enough?
 
Balanced schemes...
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