Developers demand incentives in housing policy | Mumbai news

MUMBAI: The state housing department has received over 2000 suggestions and objections to its draft Housing Policy 2024, which is expected to be presented before the state cabinet in a couple of weeks, after incorporating recommendations by stakeholders from the sector — associations representing developers, those in the construction industry, flat buyers, among others.

The policy, drafted in October 2024, after the gap of over a decade, focuses on affordable housing, slum free cities, rental housing, dedicated homes for the elderly, and aims to boost the concept of ‘walk to work’. After the government’s first policy in 2007 became redundant, the state attempted similar policies in 2015 and 2021, which did not see the light of the day for want of cabinet approval.

On its latest endeavour, an official from the housing department said, “We are trying to accommodate as many recommendations in the draft. The bodies representing developers have demanded additional incentives including TDR and FSI, apart from easing government’s red-tapisim.”

The official also underlined that the state government is facing a challenge in finding land bank in urban areas, in the absence of which affordable housing will remain a dream. “We are encouraging developers to come up with larger land stock which will help provide cheaper houses. Some associations have supported the concept,” the official told HT. Housing organisations representing developers have also demanded reduction in taxes on raw material and expenses incurred while obtaining clearances of proposals.

Domnic Romell, president of Credai-MCHI said, “We have demanded the size of affordable housing to be increased to 60 square meters from the existing cap of 30 square meters. We also expect the government to reduce the premium on affordable housing projects to zero. In our submission we have insisted that an agency be appointed for the maintenance of rental housing.”

Nitin Deshpande, president of the Marathi Bandhkam Vyavsayik Association, which represents developers, batted for a reduction in GST. “It will help the government implement affordable housing. The GST and stamp duty are high. Effective implementation of unified development rules is the need of the hour. The GST cap should be increased to ₹75 lakh from ₹45 lakh considering the rise in the prices of flats. Since ancillary charges, including development charges and premium are linked with ready reckoner, the developers are not able to pass on the FSI-related benefits to the consumers fully. We have suggested the effective implementation of unified Development Control Regulations, which gives incentives to housing development projects,” he said.

Chandrashekhar Prabhu, a housing expert, said, “All previous housing policies of the government have failed, as they could not reach anywhere near their own prescribed targets. Take the case of freeing Mumbai from slums by rehabilitating slum dwellers – after announcing the Slum Rehabilitation Scheme (SRA) in 1995, the government could rehabilitate only one lakh tenements in situ. In order to pad up figures, the construction for slum dwellers on vacant lands for the benefit of builders are added to this number.”

He added, 70% of the original slum dwellers have sold their flats, and of the 19,800 dilapidated buildings in Mumbai, only 4,000 have been redeveloped since the policy was introduced in the 1980s. “Of these, 50% have been reconstructed by MHADA. In the remaining, 76% of the original tenants have sold and left. These policies do not address the needs of the urban poor, tenants, middle class and slum dwellers, but are designed to benefit builders,” he said.