Mumbai: MHADA goes the builder way, sells on built-up area

In blatant violation of norms specifying that all homes should be sold only on carpet area, the housing body has published advertisements in which the prices of flats, which will be put up for lottery, are based on the built-up area; MHADA chief S S Zende claims he didn’t even know the ad had mentioned built-up area.

State housing body MHADA seems to have taken a leaf out of the private builders’ book. In its latest advertisement inviting people to apply for its much-awaited housing lottery, the housing body has, like last year, published built-up areas. And if one were to calculate the cost of the flats using the rates provided by MHADA’s chief, all homes are priced very close to the cost of built-up areas.

Also read: Exposed - MHADA's 'cheap home' farce


The housing body released its advertisement for 997 homes in various parts of Mumbai: Prateeksha Nagar (Sion), Mulund, Goregaon, Mankhurd, and Malwani (Malad).

The ad specifies carpet area and built-up areas of units available for different sections of society. S S Zende, CEO and vice-president, MHADA, told this reporter the going rates for the units. If these rates are used to calculate the cost of the flat using the built-up area, they are very close to the published cost of the flat in the ad (see table).

MHADA has invited bids for its flats from April 15. The lottery is scheduled for May 31
MHADA has invited bids for its flats from April 15. The lottery is scheduled for May 31. Pic for representation

When mid-day asked Zende about these numbers, he was unaware that his own organisation had published built-up areas in the ad. Zende said the organisation would soon publish a clarification note regarding the built-up area.

However, a senior officer told this paper that the calculations had been made using built-up area to keep the per square foot price low. “Had we used carpet areas, the per square foot rate would have shot up. Every builder promotes his flats using built-up area. We also did the same; else the rates per square foot price would’ve seemed higher,” the officer said, on condition of anonymity.

Also read: MHADA lottery 2014 - This year, you may not get the home you won

Reacting to this, a builder, who refused to be identified, said, “How can MHADA sell on built-up area? It is a government body. They should sell on carpet area.”

Higher loading
Another noticeable fact is the high loading factor in the flats. Loading is the ratio of the difference between built-up and carpet areas, and the carpet area, expressed as a percentage. Starting from 27.1% (EWS flats in Unnatnagar, Goregaon), the loading is as high as 90% (flats for LIG in Unnatnagar). EWS refers to economically weaker sections and LIG is low-income groups. Loading for Middle Income Group flats in Mulund is 62.7%.

The online application process starts April 15 and the lottery is scheduled for May 31.


The number of flats that will be put up for sale through the lottery

Built-up vs carpet area
Carpet area includes the area of the floor in the flat i.e. the area enclosed within the walls. Built-up area includes, apart from carpet area, thickness of the walls, staircase, entrance lobby area, lift premises, service ducts etc.

Mulund pricier than Sion
There is also another anomaly in the pricing. Flats in Prateeksha Nagar, Sion are going at Rs 37.53 lakh as compared to Rs 46.61 lakh for a flat in Mulund, with sizes of the units being almost the same. The cost goes against the market scenario, where rates in Sion are steeper as compared to Mulund.

When asked about this, MHADA chief S S Zende said, “We have a pricing policy, based on which we decide the rates. It includes the cost of construction of a particular project and the number of tenements available. If, at any place, the cost incurred is high, then the cost will be evenly divided among the tenements available.”

Previous MHADA ads
mid-day has reported in the past how MHADA has, twice, used built-up area in their advertisements. Government norms mandate that all homes be sold only on carpet area basis.

>> In 2013, the housing body had caused a furore when its Powai flats were seen as priced too high. MHADA put up a notification on their website, inadvertently revealing that they had arrived at the rates using built-up area of the flats (‘Exposed: MHADA’s ‘cheap home’ farce’, May 9, 2013)

>> In March last year, mid-day had reported that MHADA’s housing lottery advertisement had followed the archetype of private builders, with clauses that allowed them to change the area, cost and number of houses in the lottery. This was the first time MHADA published built-up and carpet areas of the flats

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