Exposed: MHADA's 'cheap home' farce

May 09, 2013, 06:24 IST | Varun Singh

A notice posted by the housing authority on its website clearly shows that it has been calculating rates for its flats in Powai on the basis of built-up area, which violates the state government's cardinal rule of basing prices on carpet area. Moreover, the built-up area is a whopping 83% more than the carpet area

If the eye-popping prices quoted by MHADA recently for its flat made you reel and put your home-owning plans on the backburner, we can shed some perspective.


Going by the state-run housing authority’s own admission, rates for its recently announced flats in Powai were calculated on the basis of built-up area, and not carpet area. This is in direct contravention of the state government’s policy, which lays down that builders can only charge buyers on the basis carpet area, and not built-up area (loading).

The matter came to light when MHADA’s exorbitant rates quoted for the flats in Tunga, Powai inspired considerable consternation among aspiring buyers. In an attempt to establish that its flats were indeed ‘reasonable,’ the agency uploaded a notification on its website, breaking down the mode of calculation.

Sachin Ahir
State housing minister Sachin Ahir

The maths on display, however, seems to have backfired, as it unambiguously mentions that the rates are being calculated on built-up area (loading) and not carpet area. In fact, the percentage of loading against carpet is as high as 83 per cent for flats allotted for middle-income groups (MIG) and 60 per cent for high-income groups (HIG).

This means that private builders are no longer the only parties who can lay claim to notoriety for basing their rates on built-up and super built-up area. The state-run MHADA’s revelation has raised eyebrows in real estate circles, since the state government has repeatedly urged private builders to follow its diktat and base rates purely on carpet area, to bring down prices.

Private builders and brokers chose the occasion to lash out against that the state government, labeling it ‘hypocritical’. Prakkash Rohera of Kkarma Realtors said, “The government wants builders to sell on carpet area, but now MHADA is breaking its own rules and calculating its rates on built-up area. This brings out the hypocrisy of MHADA.”

Akhilesh Chaubey, another builder, said, “If the state government has such high percentage of loading in its own projects, then expecting the builders to reduce loading or charge on the basis of carpet area shows their double-faced policies.”

A senior official from MHADA said, “The rates of their flats are very close to the existing market rate, which they shouldn’t be. Usually, private builders quote such high rates because they have to buy the land before developing it. But MHADA gets its land for free. If their prices are almost equal to that of private plots in spite of this, then they need to rethink if they can lay claim to the tag ‘affordable’.”

State housing minister Sachin Ahir expressed disappointment over the matter, saying, “The way things are taking place in Powai isn’t satisfactory and I have written a letter to the chief minister on the same, asking him to look into the matter. I have asked the chief minister not to let the image of MHADA get sullied by such instances.”

Built-up area (Loading)
It is the area in and around the flat that is not usable, and is separate from the carpet, or usable area of the flat. Built-up area includes walls, balconies, and in certain cases the common passage used by owners of different flats on the same floor. 

Disclaimer: The carpet area, built-up area and rates are provided by MHADA on its website. The calculation of loading on carpet area is by MiD DAY following the existing market trend.

*Reverse loading for MHADA flats {the formulae for which is (c/bX100)} for MIG is 45 percent and HIG it is 37 percent. Reverse loading is brought into the picture mostly when the regular loading goes more than 50 per cent.

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