Scant hope for ‘housing for all’ within Mumbai city

Lack of public housing for low and middle income families has left them with few options in the city. They are forced to move to the peripheries, which lack physical and social infrastructure. Meanwhile, of 193 affordable housing projects listed, only four, including three slum redevelopment projects, are planned for Mumbai city itself.

Jyoti Aware, a municipal school teacher came to Mumbai in 2009 and since then has been staying in a rented house in Mumbai’s northern suburb of Kandivali with her husband and two pre-teen children. Two years back, she purchased a house in Mira Road, a suburb outside Mumbai for Rs 30 lakh, since that was the only place where she could afford a house. However, she could not shift to the new house for that would increase her commute time four times, besides making it difficult for her children to continue in the same school.

“The new house is far, secluded, lacks good water supply, lacks proximity to services like banks and shops; besides, it fails to assure a safe and secure neighbourhood for our children back home when we step out for work, which is a critical determinant for us,” says Jyoti. Hence she and her husband choose to spend Rs 10,000 per month to rent a house within Mumbai even as they continue to pay Rs 22,000 as EMI for their new flat, thus putting a strain on their meagre resources.

The Awares are not alone. Lack of public housing for households belonging to the economically weaker sections (EWS) and the lower income group (LIG) has left them with very limited options in the city. They are getting pushed out to the peripheries of the city, that lack physical and social infrastructure, have poor connectivity and impose longer commute on residents due to the distance from their job locations. 

With private housing being too costly and beyond the reach of most, often the only housing segment they can afford in Mumbai is either through a lottery scheme brought out by the state housing agency, the Maharashtra Housing and Area Development Authority (MHADA) or in the redeveloped houses of the slums. “There is no bank loan facility available to purchase houses  in redeveloped slum buildings,” rues Jyoti, “Besides, such buildings are poorly maintained and can be transferred in our name only after a particular time period. The MHADA lottery houses are very few and difficult to get; besides they are gradually inching towards the market rates.”

 The collapse of public housing

The primary reason for the woes faced by the Aware family and others like them is the lack of proper housing planning and almost complete handover of the housing sector by the state to private players. Liasas Foras, an independent real estate research firm, found that there was negligible supply of affordable homes costing less than Rs 30 lakh within the first 40-km radius of Mumbai city. Prasad Shetty, Dean of the School of Environment and Architecture, says that though the state had planned to build 15 lakh affordable houses, it ended up building only about 1.5 lakh houses, 1/10th of the target guided by needs, despite favourable market conditions prevailing over the two decades since 1995. 

The Mumbai Metropolitan Regional Development Authority (MMRDA) had in its Draft Regional Plan for 2016-2036 blamed the shortfall in affordable housing in MMR on the state’s withdrawal from  public housing and the transformation of its role — from that of provider to a mere facilitator. Describing the state role in public housing provision as “insignificant and decreasing rapidly,” the draft report felt that this had deprived a major share of the population of formal affordable housing options of acceptable standards, thereby pushing them towards informal housing or slums.

The market-driven private housing industry prefers to focus mainly on the luxury and premium housing segments that promise huge returns, but are often left with a huge inventory of unsold housing in Mumbai in spite of huge shortage and demand for affordable housing in the city. The supply of affordable houses through the very popular annual lottery of MHADA has also reduced to a trickle now.

In 2016, Mhada brought out 972 flats for sale in Mumbai (with 495 in the reserved category and 477 in the open category) while in 2019, it offered only 217 flats for sale (with only 113 in the open category). This, even as it made 6136 housing units available in the peripheral cities of Navi Mumbai and Thane, through Mhada’s Konkan division.

“The annual number of flats allotted by MHADA have fallen because now we insist on selling only those flats that are completed and have got occupation certificate. Earlier we would also put up under-construction houses for sale, which led to instances of delayed handover to allottees. We are now expecting some allotments in the second half of 2020,” said B. Radhakrishnan, chief officer of the Mumbai board of MHADA.  

The cost factor continues to be a strong pull for MHADA housing. In the 2019 lottery, a one bedroom-hall-kitchen (1BHK — 33.30 sq m) low income group (LIG) house in Chembur was sold  for Rs 32 lakhs, while a 2BHK middle income group (MIG) house of 64.61 sq metre in Powai cost Rs 56.73 lakhs. This is way cheaper than a comparable house from private builders, which would have easily crossed the crore mark in both locations.

How does one apply for MHADA houses?

MHADA, which is the state nodal housing agency, brings out houses on sale almost every year. Thanks to the huge demand for their houses, they prefer to allot houses through a lottery system. 

Applications can be made online on their houses under various sections such as:

  • Economically Weaker Section (EWS) — those with monthly income below Rs 25,000
  • Low income group (LIG) — those with monthly income between Rs 25,000 -50,000
  • Middle income group (MIG) — those with monthly income between Rs 50-70,000
  • Higher income group (HIG) — those with monthly income above Rs 70,000. 

The available flats are reserved for various categories like Scheduled Castes and Tribes, defence personnel, handicapped, journalists and recently added category of government and police personnel apart from the open category. Information on available flats like their location, carpet area,  cost and dates for applying are advertised in newspapers. 

Earlier, the manual lottery system using paper chits attracted such huge crowds that it used to be conducted at the open theatre grounds. These used to be huge public events with long queues to fill and submit forms; such were the crowds that there have been instances of police lathicharge. But, now the lottery allotment is decided through a computerised  lottery system and information is relayed to winners via SMS.

Incidentally, MHADA is also the nodal agency for the flagship Central government scheme, the  Pradhan Mantri Awas Yojana (PMAY), that aims to provide housing for all by 2022. But, very little progress has been made under that in Mumbai city. Of the 193 projects listed as affordable housing projects under the scheme (with 35% of the constructed houses for the EWS category, having carpet area of upto 30 sq metre), only four (including three slum redevelopment projects) are listed for Mumbai city.

Hope for the future?

In the Draft Regional Plan for 2016-2036, MMRDA recommended that the state needs to encourage or incentivise markets to deliver medium-sized houses in the city, so that middle income households can move from slums to formal housing. It also sought to link subsidized or free houses to the needy to arrest leakage of benefits meant for the economically weak. 

“Housing is a fundamental human need and decent affordable housing should be a basic right for everybody in this country,” agrees Hardik Agrawal, CEO of Radha Madhav Developers in Mumbai, “Without shelter, everything else falls apart. There was an inventory problem in the city, with not enough houses to meet people’s needs. Supply was less than demand, which led to increasing home prices. But this budget has provided some relief to developers as it has ensured macroeconomic stability, and that can lead to housing for all.” 

Despite such verbal assurances, hope for low cost housing in Mumbai is scarce. Liasas Foras warns that India’s inability to meet affordable housing needs could result in a scenario, where a large proportion of retired senior citizens end up finding themselves in rental homes or worse, in slums or homeless condition. That’s a scary prospect not just for this generation, but even for future ones. Changing that will require strong political will and state enterprise, something we have not really seen much of, as we shall discuss in the concluding part of this article.

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