Maharashtra miles ahead of the pack
State to develop one lakh units in three years under the rental housing scheme
Unlike developed countries such as UK, US, France and the Netherlands, India has very low penetration of rental housing. Social rental housing in these countries constitutes 20% to 30% of their total housing stock.
According to a KPMGNAREDCO report titled Bridging the Urban Housing Shortage in India, governments have a large role to play in promoting social housing as most of the rental houses are provided by the government or limited to non-profit housing associations that utilise government incentives. Authorities such as the Mumbai Metropolitan Region Development Authority (MMRDA) had taken the lead way back in 2009, in a tie-up with Housing Development and Infrastructure Limited (HDIL) to develop 525 acres of land in Virar and build rental houses for about 43000 families under the scheme. HDIL was free to build another 90,000 houses to sell in the market to recover costs. The rent was to range from R800 to R1500, depending on the location.
The scheme unfortunately had limited success as it lacked enforcement and required rental management.
The state nevertheless runs a successful rental housing scheme, allowing developers an FSI of four as an incentive. They can use and sell up to three FSI and sell the remaining one to the MMRDA to use for rental housing. It works out to something like this: On a minimum 1 hectare plot that belongs to the developer for which clearance is received by the MMRDA, three-fourth of the plot is available to the developer to build and sell while one-fourth of the land is developed and transferred to MMRDA free of cost to be given for rental housing. “Till date, there have been over 50 developers who have enrolled for the scheme. As of now there are 25 sanctioned projects under this scheme. While 10,000 units will be ready under this scheme by the end of this year in areas such as Thane and Kalyan, we are hoping to complete a total of 1 lakh units by the end of three years,” says S V R Srinivas, additional metropolitan commissioner and project director, MMRDA.