Mumbai, the country’s financial capital, is also home to Asia’s largest slum, with a majority of its citizens living in this and the many other slums that co-exist alongside the city’s many luxury skyscrapers. Over the years, successive state governments have announced many grandiose plans to replace these slums with low cost housing. But the slums, lacking in basic infrastructure and amenities like water and electricity continue to proliferate, even as huge numbers of luxury housing units remain unsold. 

In fact, Greater Mumbai has the highest share of slum households in the Mumbai Metropolitan Region (MMR – 79% with 11,01,655 households) as per the 2011 census. The per capita living space in Greater Mumbai is the lowest at 4 to 6 sq m. Much studied and even romanticized in films like Slumdog Millionaire and books like Shantaram, these slums have become an integral part of Mumbai’s ecosystem. 

The acute shortage of housing, however, exists not just for those living in poverty, but also for low and middle income groups. Successive governments of all political parties have failed miserably to implement their grand election manifesto promises to deliver affordable housing for the common man. The much-touted Slum Redevelopment Scheme initiated in 1995 had envisaged delivering low cost homes to 15 lakh households, but managed to build only about 1.5 lakh homes despite the favourable economic and real estate market conditions then. 

Also read: Scant hope for ‘housing for all’ within Mumbai city

Activists believe that weak political will and collusion with the builders’ lobby is mainly responsible for the state’s failure to deliver affordable housing to all. The Maharashtra Housing and Area Development Authority (MHADA), the state’s nodal agency for housing has been rendered toothless due to some tweaks in government policies that conveniently favour the corporate builders’ lobby.

Consider this: MHADA’s housing stock in Mumbai has declined sharply and it is no longer able to build and sell houses at affordable rates. Earlier known as the Bombay Housing Board, MHADA was set up in 1976 with the aim of providing quality affordable housing for all. “Earlier Mhada would build flats on land that it obtained almost free from the government, which sharply reduced the cost of making the flats available for people,” said Vaishali Gadpale, chief public relations officer of MHADA. “But, now government lands are no more granted to us for affordable housing.”

Also, MHADA no longer has sufficient housing stock, thanks to the scrapping of an earlier provision that said private builders had to compulsorily allocate a part of their housing units through MHADA for public housing. “Builders do not have to hand over flats to us any more, instead they just pay us a premium,” said Gadpale. 

“The genesis of the problem of disappearance of cheap houses from Mumbai is the repeal of the Urban Land Ceiling Regulation Act, 1976 in 2007,” said Chandrashekhar Prabhu, housing activist, architect and ex- president of MHADA. “That Act ensured that government land was available for affordable housing. But, the greedy builders lobbied with the political parties who got it scrapped. This has been the singular nail in the coffin of affordable housing in Mumbai. With no land, MHADA is left with nothing to build on.”

Liasas Foras, the real estate data analytics firm, estimates that land constitutes 50-60% of the entire housing cost. In Mumbai, cost of land has increased 9 times since 2005-2014, while financing costs have shot up close to 7 times, according to their Housing Charter, 2018 report.

Activists like Vishwas Utagi — General Secretary, Nivara Abhiyaan, Mumbai — claim that not only does the state fail to frame pro-poor policies, it goes out of its way to benefit corporate builders.”Instead of giving 2808 hectares of land that had been leased by British and Indian government for doing business,creating jobs and affordable housing for their workers, the state chose to hand it over to private corporate builders on a platter, allowing higher floor-space index (FSI) for private housing to make big money,” said Vishwas. 

When the activists contested it in the Bombay High Court, the Devendra Fadnavis-led government passed a resolution on August 1, 2019 to give that land to private builders by charging a single premium claiming that the land had been lying idle. “The government seems to play no role in the housing sector today, except in helping builders. Though there is a huge demand for low cost housing, no one is building these,” Vishwas added.

He also alleges that the builders’ lobby does not let MHADA reduce the prices of its flats and the government seems to be succumbing to the pressure. “Builders have grabbed huge tracts of government land and are jacking up land prices. Politicians too seem to be working in tandem with these corporate builders, as the failure to frame housing policies for the poor would suggest. Unless there is a people’s movement for affordable housing, nothing will change.”

MHADA, however, claims that its flats continue to be cheaper and popular thanks to their low profit margins. “We are the largest land bank in the city,” said Gadpale. “We invite tenders to redevelop housing on land owned by us. While private builders build it for us, we handle the pricing and allotment process, even as we continue to be land owners. Our houses are affordable because of our pricing policy — this involved pricing at land cost plus cost of construction with a 15% profit margin in case of higher income group (HIG) housing and 5% profit margin for the MIG housing.” 

With access to new land denied, MHADA has now shifted its focus to redeveloping houses on its own land and expects these projects to generate a lot of houses in the affordable housing sector. Currently, MHADA is overseeing redevelopment of about 16544 tenements from 207 chawls spread over 92 acres in Central Mumbai, built by the Bombay Development Directorate (BDD) in the 1920s. While private builders are implementing this project, MHADA will handle pricing and the allotment. “Though this project is meant to rehabilitate about 16,000 households, it is expected to generate 8000 additional houses for the open market,” said Gadpale. 

As the new three-party Maha Vikas Aghadi government in Maharashtra settles down,it remains to be seen how much things change, or remain the same, on the affordable housing front.