MHADA says additional cost of infrastructure has to be borne by the allottees.
In May 2011, the Maharashtra Housing and Area Development Authority (MHADA) held a lottery for 4034 flats in Mumbai. A year on, several people have received their allotment letters, and many have been given possession of their houses.
However, MHADA officials recently realised that they quoted incorrect prices for flats in Powai and Malvani (Malad west), and decided to increase the rates by Rs15lakh and Rs2.5lakh, respectively. This is the first time in the city that sold flats have been charged this much.
Of these 4034, 2350 houses were reserved for the economically weaker section (EWS). The average cost for those houses was Rs14,93,600 for 305sqft. At the time of the lottery, the cost was Rs4918 per square foot, which has now risen to Rs5704.
When contacted, MHADA said that in the past one year, the concerned contractor had raised the construction costs, and also made a drainage pipeline and fitted new fire safety equipment.
Powai was one of the more popular locations during the 2011 lottery, as the higher income group (HIG) flats were spacious and priced lower than the market rates.
The cost of each 700sqft house was Rs34,75,000 at the time. After the lottery process, around 55 applicants paid the full amount, 25 paid 25% of the quoted amount, and the rest are still completing formalities.
Now MHADA has sent letters to these applicants, saying that the prices have gone up by Rs15lakh, which means the flats will cost about Rs50lakh.
MHADA is now preparing another lottery on May 31 this year, and the cost of the flats has gone up again, belying the government’s claim that MHADA is the only agency that constructs affordable houses for the common people. There are several provisions in the Maharashtra Ownership Flat Act (MoFA) that prevent private developers from swindling buyers, but it would appear now that MHADA is just doing just that - cheating the average citizen.
Satish Gavai, vice-president and chief executive officer of MHADA, said, “We have constructed internal roads and other important infrastructure at Malvani, and obviously we have to take this money from the flat prices.”
He added, “Because the buildings were under construction at the time, we mentioned in the advertisement that prices could be changed.” He was not aware, he said, of the price hike in the Powai flats.
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