South Mumbai: MHADA aims to decrease the premium from 50% to 35% on redevelopment projects.

MHADA has made investments in redevelopment buildings in South Mumbai less costly for developers. It directly translates into affordable housing for the common man at the heart of Mumbai.

Are you living in a compact house in South Mumbai? Or perhaps, you’ll find yourself in an old building and have no other choice but to live in a bigger home in the suburbs? You will simply no longer have to leave your cherished location. The biggest planning body in the city-Maharashtra Housing and Area Development Authority (MHADA) is set to make a decision that could relieve those looking to find a home in Mumbai with a focus on affordable housing and ‘Housing for All’.

MHADA aims to decrease the premium from 50% to 35% on redevelopment projects. This is to draw developers who were skeptical because of the high premium, even if they were interested in redevelopment. The 114 MHADA layouts undergoing cluster redevelopment could lead to more developers and further cement state plans for affordable housing in South Mumbai.

The body reduced the premium from the previous 22.5% to only 8.5% for buildings below and up to 70 meters in height. In buildings over 70 meters, a five-year payment plan has been drawn up for the premium rather than the early one-time payment. Developers will now be required to pay 10% for construction in its areas of responsibility for the first year and then 8.5% for the rest four years.

One of the MHADA senior officers said, “Many developers have asked us to allow premium payments to be paid on installments.” They have said that there is already a severe cash crunch in the market and that interest on the same premiums needs to be reduced, so we issued a circular which clearly explains MHADA’s new premium policy. “Most cessation building projects have stayed in the way of developers’ failure to pay the premium, so we hope that the new policy would accelerate the drive for redevelopment,” he added.

Another MHADA financial advisory officer says, “The new decision would make a loss of almost Rs 50 crore a year to the MHADA,” The decision was made, and relief is made elsewhere so that the work will not stop. “Currently, it is a special layout planning authority; MHADA has 114 layouts, which includes almost 4,000 apartments.

It is also the planning body for 19,107 abandoned buildings, which must be redeveloped as quickly as possible. “The policy required to change, which we have now completed, in order to encourage developers to redevelop projects,” he said.