Private builders show interest in MHADA joint Venture schemes
In an effort to offer relief against the exorbitant prices of residential properties in Mumbai, MHADA has come up with new joint venture schemes to lure private developers and builders. Through its new scheme, MHADA aims to generate as many as 40000 low-cost homes for the lower and upper section of home buyers.
To create adequate housing stock in land starved Mumbai, MHADA (Maharashtra Housing and Area Development Authority) has modified its joint venture schemes significantly. The newly modified policy is aimed to prevent the common man from the burden of escalating house prices and bridge the gap between demand and supply of residential properties in Mumbai.
Modified Joint Venture Scheme
According to the modification, builders and developers will not be required to transfer land title to MHADA. Instead, the developers can keep the title in their name and will be required to transfer only MHADA’s share in the name of the housing board. The proposed modification is likely to arouse interest among the developers and builders to come up with residential enclaves in various plots in Thane, Bhandup, Mulund and Lower Parel that are owned by MHADA.
The modification is considered to be a huge step towards the development of private realtors in Mumbai and may give the real estate market an extra boost, since the old scheme made a lot of builders unhappy. According to the old scheme, a developer is entitled to a higher share of the FSI 2.5 only if they construct plots of 2000 sq m with MHADA. Under the old scheme, the plot owner gets an FSI of 1.75 while MHADA will get 0.75, out of 2.5, only when the land is transferred into MHADA’s name.
Advantage for builders
The modified scheme has a new offering that is likely to create a stir among the developers. According to the present joint venture scheme, builders who have plots bigger than 2000 sq m can work in alliance with MHADA and get entitled to FSI 2.5 without transferring the title of the land to MHADA. The new scheme confirms that builders and MHADA are entitled to share the extra FSI and housing stock equally.
However, developers had a different take with the new scheme. According to some key realty developers, working in joint venture with MMRDA is more lucrative than MHADA, since the latter offers an FSI of 4 for its rental plans. Moreover, according to development control rules, builders are permitted to consume a FSI of 2, inclusive of TDR 1.
The new scheme is likely to encourage the private developers to work in joint venture with MHADA. Opportunity to retain the title of the land is an important aspect that can lure builders to work with MHADA. This will give rise to a number of low-cost homes in Mumbai and benefit the home buyers significantly. If reports are to be believed, MHADA has initiated three proposals which are in Thane, Pune and Akurd. Thane alone is likely to generate around 1750 homes, while Pune and Akrudi will offer around 3100 affordable homes.
