'MHADA doesn't want builders to face losses'

Sep 11, 2012, 07:05 IST | Varun Singh

Sena leader Subhash Desai says if MHADA grants NOC for redevelopment of 3,000 buildings, 1 lakh affordable houses would become available, which would bring down property prices

Accusing Maharashtra Housing and Area Development Authority (MHADA) of working in the interest of builders, Shiv Sena leader Subhash Desai, along with 100 MHADA building residents, protested outside the authority’s headquarters in Bandra (E) yesterday.

Shiv Sena leader Subhash Desai with MHADA building residents protest
Fighting for home: Shiv Sena leader Subhash Desai along with MHADA building residents protest at the authority’s headquarters in Bandra yesterday

Claiming that the city won’t get 1-lakh affordable homes because MHADA doesn’t want to upset builders, Sena leader in the legislative assembly, Desai, stated that more than 3,000 buildings situated on MHADA land are awaiting the No Objection Certificate (NOC) to commence redevelopment, but for the last three years the housing body isn’t giving it to them.

Asserting that MHADA, by not facilitating redevelopment, is trying to help developers, especially top builders, Desai said, “If these buildings are redeveloped, the city will get nearly 2 lakh homes, of which 1 lakh homes would be used for accommodating existing residents and the remaining 1 lakh homes would be for sale in the market at affordable rates.”

Desai feels that MHADA officials don’t want private builders to suffer, and hence are taking an anti-people stand. “If MHADA gives nod to redevelopment proposals, housing stocks would increase drastically. This to a large extent will meet the supply and reduce the demand. Thus, house prices would automatically fall. One-lakh homes for sale is a huge figure; it would surely impact property prices and the biggest beneficiary would be the common man. But if prices fall, private builders would be the worst affected as it would mean losses for them,” said Desai.

After September 2010, MHADA decided to give the go-ahead for redevelopment only if builders agreed to give stock to the authority after construction. However, according to Desai and many other residents, this move forced developers to shy away from redevelopment. “Earlier, builders were asked to pay a premium (money) to MHADA. Now, MHADA asks for stock, which is not commercially viable for developers,” said Ram Shelke, a resident of MHADA colony in Nirmal Nagar.

“A builder undertaking redevelopment provides extra built-up area to residents and also makes available a corpus fund. Only after the sale of flats, he makes his profit. However, if a builder has to give away flats, he wouldn’t be able to make profits. As builders don’t see a margin of profit anymore, they aren’t coming forward to carry out redevelopment,” said Shelke.

MHADA officials are worried that since they already don’t have flats for the coming lotteries, if the government agrees to the demands of Desai, it would mean that MHADA would lose out on housing stock.

“If things go in Desai’s favour, it would mean MHADA won’t be able to get housing stock for future lotteries. Also, these protests show the selfish attitude of existing tenants. They stay in smaller houses ranging from 250-300 sq ft, and after redevelopment get 484 sq ft. But, they don’t want to make flats available for others. As builders have to give stock to MHADA, it would reduce the corpus fund to residents, which inhabitants don’t want to lose,” said a senior MHADA official on condition of anonymity.

Meanwhile, the residents also don’t want MHADA to redevelop buildings, claiming that their construction is shabby and housing authority won’t even give them corpus funds, which is a loss for them.  

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