Maharashtra housing secretary says notification for this project to be finalised by July. However, nothing appears to have happened on the MoU, signed last year with MCHI, for five lakh houses in five years

Moneylife Digital Team

The Maharashtra Housing and Area Development Authority (MHADA) will, in partnership with private builders, supply 20,000 affordable apartments in the next few years, Gautam Chatterjee, state housing secretary and former vice-chairman MHADA, said today.

"MHADA will cooperate with private developers and offer the government's share of FSI to them. The builders, in turn, will hand over the constructed units to MHADA, which will be made available to people at rates much lower than the current price quoted by builders," Mr Chatterjee said at a conference on affordable housing, organised by the Mumbai Press Club.

The preliminary notification for this has already been issued in the ministry and will be finalised by July, he said. Sixty per cent of this housing stock will be for the weaker sections. This year, MHADA has supplied some 4,000 houses at highly subsidised rates.

This announcement comes at a time when MHADA is facing an acute land crunch, and land acquisition moves in various parts of the country have seen stiff opposition.

Dharmesh Jain, vice-president, Maharashtra Chamber of Housing Industry (MCHI), expressed his support for the scheme. "We welcome the move, and we appreciate that MHADA is looking innovatively at FSI management. Mumbai being an island city, the only option is to expand vertically. For that, we must rethink the concept of FSI," Mr Jain said.

MCHI signed a memorandum of understanding with the state government last year to provide about five lakh affordable houses in the next five years, but there has been no progress on this to date. Mr Jain, like most other builders, blamed this on administrative delays and the lengthy process for getting clearances. But this does not explain why also more than 88,000 flats remain unsold in the city. (This is an estimate according to realty research firm Liases Foras.)

Activist Ms Neera Adharkar, who attended the conference, said it was necessary to focus on the concept of 'affordable housing'. "Is there really any affordable housing scheme? When more FSI is granted, buildings will grow taller, and the population density in the area will increase. Automatically, affordability will come down. Builders view affordability in terms of apartment size and not price," she said.

Mr Chatterjee pointed out that skyrocketing prices could be reined in only if supply increases or the government intervenes. "There are two types of houses that we build: ones that are cheap and mostly for slum redevelopment, and the others which will cross subsidise the former. We need to supply a third kind of stock, which will be accessible to commoners. For that, either the government has to intervene, or the supply has to be increased, to exert downward pressure on existing prices," he said.