The Maharashtra Housing and Area Development Authority (MHADA) has hit upon a new plan to increase the stock of public housing even as the availability of land for such projects is falling. It has decided to invite private developers and give them incentives to construct such projects on their plots.

The project is in keeping with the Central Government’s scheme for affordable housing in partnership with private firms under JNNURM. MHADA will be the implementing agency for the scheme in Mumbai. Under the scheme, the Centre will contribute Rs 60,000 to Rs 1 lakh for every tenement that is constructed for economically weaker sections (EWS) and low-income groups (LIG). At least 25 per cent of the total flats in any such private-partnership project have to be in the EWS and LIG categories. The remaining flats can be constructed for middle and high-income groups and sold by the developer for profit at market rates.

Buyers will not only get the benefit of affordable homes but also can avail themselves of a subsidy of five per cent per annum on the interest charged on the bank loan. This subsidy can only be availed of by those buying houses meant for EWS (average monthly income up to Rs 3,300) and LIG (between Rs 3,301 and Rs 7,300).

MHADA will soon invite Expressions of Interest from developers who will use their land for this project. MHADA vice-president Gautam Chaterjee said the board is in the process of framing guidelines specifying minimum area of land required for individual projects, provisions for incentive floor space index and similar details.

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