The Maharashtra Housing and Area Development Authority (MHADA) has proposed capping the prices of housing-stock and amenities for the Economically Weaker Section (EWS) and Lower Income Group (LIG) in all state housing projects. This move aims to prevent developers from charging open market prices, undermining affordable housing efforts. Under the 2020 Unified Development Control and Promotion Regulations (UDCPR), 20% of plots over 4,000 sq. m. must be allocated for EWS and LIG housing. The proposal includes limiting additional charges to the actual cost or 5%, whichever is less. MHADA seeks approval from the urban development department for this cap.
The Maharashtra Housing and Area Development Authority (MHADA) has proposed capping prices for housing stock and amenities allocated to the Economically Weaker Section (EWS) and Lower Income Group (LIG) in all state housing projects. This move aims to prevent developers from charging market rates, undermining the affordability of housing meant for lower-income groups. The proposal, sent to the urban development department led by Chief Minister Eknath Shinde, seeks to regulate these prices and ensure affordability for beneficiaries.
In 2020, the Maharashtra government introduced the Unified Development Control and Promotion Regulations (UDCPR), applicable to all building and development activities across the state, except areas under the Municipal Corporation of Greater Mumbai, MIDC, NAINA, Jawaharlal Nehru Port Trust, hill station municipal councils, and eco-sensitive regions. Under these regulations, if a plot designated for residential use measures 4,000 square meters or more, at least 20% of the land must be reserved for affordable housing for EWS and LIG.
However, since the UDCPR's implementation, beneficiaries have frequently reported being asked to pay prices comparable to the open market, defeating the purpose of creating affordable housing. Developers are supposed to sell these tenements at a price based on construction costs listed in the annual statement of rates published by the Inspector General of Registration, with a 25% markup, or 125% of the base price.
Despite these regulations, some builders have been increasing costs at the time of payment by adding extra charges for amenities, driving up prices significantly. To address this, MHADA has proposed capping any additional charges for amenities at the actual cost or 5%, whichever is lower. This would ensure that developers cannot unjustifiably inflate prices and that the housing remains within affordable limits for EWS and LIG beneficiaries. Additionally, in plot development projects, landowners or developers will be required to share the necessary land area with MHADA.
In conclusion, MHADA's proposal to cap housing prices and amenity charges seeks to ensure affordable housing for EWS and LIG, addressing developers' market rate practices while promoting equitable housing solutions in Maharashtra.
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