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Maharashtra eases rules to push building of budget homes

Builders can now sell 50% homes in each project through lottery

Maharashtra eases rules to push building of budget homes

Builders in Maharashtra can now sell 50% of their houses through a MHADA-like lottery or on the first-cum-first-serve basis under the Pradhan Mantri Awas Yojana after getting into private-public partnership and joint venture arrangements with the government.

The state has introduced the seemingly attractive propositions to speed up the construction of affordable houses under the Centre's flagship project. It plans to build 19.4 lakh such homes by 2022.

"Neither will we buy nor provide any land. The houses will be constructed on private promoters' plots. There will be no development charges for such projects," Sanjeev Kumar, state housing secretary, told DNA.

In return, builders will be granted an additional 2.5 floor space index in residential areas and an extra FSI of 1 in green zones. FSI is the ratio of built-up area to the area of the land on which a building stands. The value indicates the total amount of area, on all floors, that can be built upon a plot.

Kumar said the changes in the norms will make the process hassle-free and developers should find them attractive. "The condition is that these affordable houses have to be sold as per the government policy. The list of beneficiaries should be approved by the local body on the ground that the individuals do not own any house," said Kumar.

The state government will also fund these projects through its housing bodies like MHADA, CIDCO and SRA. It has set aside Rs 7,000 crore to create dwelling units under PMAY. While the first-cum-first-serve option is not new, the government has introduced the second choice of the lottery for builders following good demand for affordable homes.

In the last four years, 26 lakh people have registered under this scheme.

Developer Niranjan Hiranandani, who is also the chairman of umbrella housing body CREDI, welcomed the move. "In Mumbai itself, 50% of the population stays in slums. Even if 2% of the people get houses under PMAY, that will be appreciable."

Also, the decision will not impact the private developers' market, said Hiranandani. "There is a huge need for houses. We cater to a different market while PMAY is catering to another segment of society. This scheme will mostly benefit the middle-income group or the economically weaker section," Hiranandani added.

The government has so far sanctioned the construction of 11.8 lakh affordable houses under the PPP and joint venture model and released Rs 1,387 crore, according to official data. It has also set up a special purpose vehicle that will be headed by the Chief Minister for faster clearances.

Under PMA, developers choosing the PPP or joint venture model must have a clear title of the property and there should not be any encroachment on it. While the land should be mortgage free, such projects will be covered under MahaRERA, development control rules and development planning norms.

Housing For All

The move is aimed at speeding up construction under the Centre’s flagship project

  • 19.4L homes states plans to build by 2022
  • 26L people registered for PMAY in past four years