In redevelopment, builders must share flats with state: rules Maharashtra govt

Saturday, 22 December 2012 - 9:00am IST | Place: Mumbai | Agency: DNA
During the ongoing winter session of the state legislature in Nagpur, the government on Friday announced that it would stick to a newly announced ‘flat sharing system’.

It’s a blow for the builder-developer lobby vis-à-vis redevelopment of Maharashtra Housing and Area Development Authority (Mhada) colonies. Realtors will have to part with their windfall gains of redevelopment by giving away a share of their pie to the government.

During the ongoing winter session of the state legislature in Nagpur, the government on Friday announced that it would stick to a newly announced ‘flat sharing system’. This means that developers of Mhada colonies will be left with fewer flats to sell in the open market. What realtors were angling for was the former ‘premium system’ that fetched chunkier profits.

Across the city and its suburbs, there are 56 Mhada colonies comprising 3,701 buildings which house at least 1.11 lakh tenants. When a building is redeveloped, a developer gets additional floor space index (FSI) which means he can construct more houses on a plot than what it originally housed. While all original tenants are accommodated in the redeveloped building, the extra flats are sold in the open market.

The ‘premium system’ bode well for realtors as they paid a nominal amount to the state and, in turn, sold the flats at existing market rates. But, the new ‘flat sharing’ system will mean that realtors hand over a certain number of flats to the government to be sold under Mhada’s affordable housing scheme.

The builder lobby has been pressuring the government to revoke its decision to implement the ‘flats sharing’ system launched in September 2010. The Shiv Sena too has been making the same demand. On Friday, Shiv Sena leader Subhash Desai once again raised the issue in the legislative Assembly.

However, CM Prithviraj Chavan said the redevelopment of Mhada colony would help create housing stock. .He added that redevelopment would be done by Mhada-appointed contractors or private builders. Besides, to keep malpractice by builders in check, the government announced that all redeveloped Mhada flats will be allotted a standard floor space. Chavan said builders were promising “unreasonable flat sizes to outdo competitors”. This, he said, had left many such redevelopment projects stalled due to squabbling by original tenants, each of who vies for a more spacious flat.

Real Blow
The state on Friday announced that it would stick to a newly announced ‘flat sharing system’
This means developers of Mhada colonies will be left with fewer flats to sell in the open market
What realtors were angling for was the former ‘premium system’ that fetched chunkier profits.


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