The Confederation of Real Estate Developers Association of India (Credai) in Maharashtra praised the state government's decision to mandate the reservation of 20% of flats for the weaker section in developments spanning one acre or more. However, the association expressed concerns regarding the clarity of the resolution for developers to follow.
The state government has introduced a low-cost housing policy. According to a notice issued by the under-secretary of the urban development department, developers with projects on one acre or more are required to reserve 20% of their flats for the weaker section. This policy is applicable to cities with populations over 10 lakh, including Mumbai, Pune, Thane, Nashik, and Nagpur.
The notice specifies that the 20% reservation applies to both flats and plotting plans, and these reserved units will not be included in the builders' floor space index. Upon project completion, these flats must be handed over to the Maharashtra Housing and Area Development Authority (MHADA) at the ongoing market rate of construction costs. The civic body will allocate the affordable flats through a lottery system. If the civic body does not take over the flats within six months, the builder has the right to sell them.
Credai welcomed the decision to increase the land limit to one acre. Currently, cities with populations below 10 lakh are excluded, but they may be included in later stages.
This decision aims to reduce slum areas in cities and provide affordable housing units to the weaker section. However, there are concerns regarding plotting schemes. If MHADA purchases the flats after completion, it could block investments and increase expenses for developers.
The governing body suggested that the civic body should allocate the 20% of the flats during the construction period to avoid such issues. Credai also plans to address additional minor issues with the state government in the future.