Policies to ease buying a house in Mumbai
Mumbai has been the most precious jewel in the crown of real estate industry in India. The financial capital was the first city in India to boast a skyline dotted with skyscrapers. The scarcity of land and the ever increasing population of the island city makes the housing problem always a debated one.
High rises: Usual choice
Mumbai, with a population of 12,478,447 as per 2011 census, is the most populated city in India. It has a scanty living space of 48 square feet per person. The high density of population in the city has put the spotlight on high rises as the only solution to its housing problem.
Old buildings of the city have been grounded by the government authorities and highly dense slum areas have been resettled to make way for the high rise flats. The city skyline still loses out to other big cities in Asia and much is to be done for resettling the slum areas. How much of the housing problem has been solved by the new flats, remains to be seen. The number of unsold homes have grown up to 80,000 in 2012 in Mumbai and it has resulted in shift to assess the housing problem in a different light. People living in erstwhile slum areas have been dehoused and new flats have not been able to find occupancy as expected.
Hence, if the slum redevelopment and flats being erected in place of unplanned slums have not solved the housing problem in Mumbai, then we should be looking at other possible solutions, too.
The Rent Control Act
The Rent Control Act of Mumbai has been a much debated and controversial act. The Bombay Rents, Hotel and Lodging House Rates Control Act 1947, known as Bombay Rent Act, has been mired in controversy on numerous occasions.
Those who criticise the Act say that it is adversely affecting the real estate in Mumbai. As per the Act, almost two million of Mumbai’s population is able to stay in houses by paying a ridiculously low amount of rent. While they pay a rent of around Rs 100 to Rs 500 per month, the rental rates in Mumbai is almost a thousand times greater than what they are paying. Of Mumbai’s approximately 16,142 rent-controlled properties, about 5000 are older than 100 years and only 3 percent of all the rent-controlled units have been redeveloped so far.
As a result, it has had adverse effects on investment in housing for rental purpose and also at the same time it protects only the people who had already been living in rented homes. Consequently, people coming in to the island city find it increasingly difficult to get a house for rent in Mumbai. The migrants coming in to the city have to pay for a house in old chawls or slums a rent which is many times higher than in many lower and upper middle class localities. Analysts argue that the Act has to be done away with in order to revive investment in middle and low income housing for rental purpose.
Affordable Housing
Affordable housing has to be promoted on a bigger scale to address the housing problem of Mumbai. Keeping in mind the exorbitant capital values of properties in Greater Mumbai and large population earning below median income, inclusive housing for the low income group has assumed top importance. Suggestions have been considered about keeping aside a portion in every residential project for low income groups. Andhra Pradesh government has already come up with such reservations for low income section and Mumbai should follow their lead.
Big developers like Hiranandani Group are being asked by the government to construct affordable homes in Powai and nearly 1.13 lakh square metre area is likely to be made available for low-cost housing under Powai Area Development Scheme (PADS). Inclusive housing can be realised through PPP model where developers would develop the units, an NGO would collect rent and manage the property and government would provide subsidy on a family-to-family basis.
Floor Area Ratio (FAR)
Restrictive Floor Area Ratios (FAR) are hurting the Indian cities and it can be said that Mumbai has been hurt the most. Indian cities have the lowest Floor Space Index (FSI) of all the big economies in the world. FSI refers to the ratio between the total plinth area of the building and the total extent of the land. While in most of the Asian cities, the FSI is in the range of 5 to 15, in Indian cities it is in the range of 1 to 3 only.
Those in favour of FSI regualtion argue that any relaxation in FSI would invariably lead to unmanageable infrastructure hurdles. However, there is a need to accept the fact that both FSI relaxation and infrastructure development have to walk together, if we are looking at a planned urban landscape for cities in the future.
