MHADA TO TAKE OVER CESSED PROJECTS DELAYED BY THE DEVELOPERS

In a positive move against the delinquent Developers in non-completion of cessed redevelopment projects basically in South Mumbai undertaken and leaving the tenants stranded for years in transit accommodations, the State Govt. has now announced that if no progress have been made by the Developers in such projects on hand for more than 3 years, the MHADA will take over these projects and complete the same.

Though the move of the State Govt. describes a healthy-looking and promising proposal for thousands of affected families, it is very much doubtful in successful implementation of the said resolution as MHADA itself is not competent enough to complete these left-over massive projects on time due to endless reasons with fund paucity on the top with legal hassles to follow. There are many such projects undertaken by MHADA on their count since years, have been left on a half way to complete them and the tenants of these buildings have been staying in transit for years together.

The reason for such announcement is that most of the Developers had demolished the existing cessed structures and thereafter the projects remained stagnant with no progress for years due to reasons not known to the gullible and helpless tenants.

It is a matter of concern as to why the State Govt. has not thought of imposing substantial penalty such as permanent cancellation of license, imprisonment for 10 to 15 years for breach of trust and cheating, unfair trade practice and deficiency in services etc as these are the effective machineries available with the State Govt. to redress the grievances of ill-fated tenants.

There are numerous causes for delays in completion of any redevelopment project such as inefficient and unskilled manpower, poor supervision, imperfect planning, diversion and paucity of fund, mounting up of unsold stock, non-payments and debt accruals, increases the construction and storage cost, late government approvals, getting the completion certificate after a long wait, manpower delay to list a few. Civil contractors executing these projects have so much on their plate that managing different projects is becoming more and more difficult.

There are types of greedy Developers of lower category who have abandoned or delayed the redevelopment projects in order to acquire more and more redevelopment projects which are beyond their financial means or are simply not capable to execute them due to lack of competency.

The State Govt. has decided to identify such incompetent Developers and serve notices to them cancelling their NOC and the cost of project and the fine will be recovered from the Developers. However, as per the opinion of the author of this article, it doesn’t sound practical and workable in absence of any laid down theory or foolproof method to implement the move of the State Govt.

It has been learnt that in Mumbai, there were 14,000 cessed buildings of which, nearly 5,000 buildings are undergoing redevelopment and that the MHADA is ready to undertake and complete these pending and delayed projects under cluster and normal redevelopment schemes but a million dollars question about its unbeaten effectiveness to shoulder such a massive task. If the State Govt. fails to plan, it shall certainly plan the failure.

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20 % RESERVATION FOR EWS AND LIG ON THE PLOT FSI EXCEEDING 4000 SQ.METERS

The Maharashtra Regional & Town Planning Act 1966
Notification under Section 37(lAA) (c) of the said Act &
Modification to Development Control Regulations for
Greater Mumbai, 1991

Government of Maharashtra, Urban Development
Department, Mantralaya, Mumbai - 400 032
Dated: 8th November, 2013

NOTIFICATION

No. TPB 4312/CR-45/2012/ (2)/UD-l 1

Whereas Development Control Regulations for Greater Mumbai, 1991 (hereinafter referred to as "the said Regulations") have been sanctioned by the Government under section 31(1) of the Maharashtra Regional and Town Planning Act, 1966 (hereinafter referred to as "the said Act"), vide Urban Development Department Notification No. DCR/1090/UD-11 (RDP) dated the 20/2/1991 so as to come into force with effect from the 25/3/1991.

And whereas, in furtherance of the Housing Policy of the State which provides for inclusive housing for the Low Income Groups (LIG) in private layouts, the Govt., in exercise of the powers conferred under sub-section (1AA) of section 37, had issued a Notice bearing No. TPB/4307/CR-337 /2007 /UD-11 dated 18th January, 2012 for inviting suggestions/objections from the general public, with regard to the modification proposed in the Schedule-A appended to the said Notice (hereinafter referred to as "the proposed modification"), for the Municipal Corporations mentioned in the Schedule-B appended thereto including the Municipal Corporation of Greater Mumbai (hereinafter referred to as "the said Corporation) and appointed the Deputy Director of Town Planning, Brihanmumbai as the Officer (hereinafter referred to as "the said Officer") to submit a report on the suggestions/objections received in respect of the proposed modification to the Govt. after giving hearing to the concerned persons and the said Corporation.

And whereas, the said Notice was published in the Maharashtra Government Gazette (Extra-Ordinary Gazette) (hereinafter referred to as "the Official Gazette") dated 24th January 2012 and the said Officer has submitted his Report vide letter No.1391 dt.8.11.2012, through the Director of Town Planning, Maharashtra State, after completing the legal procedure stipulated under section 37(1AA) of the said Act,

And whereas, after considering the Report of the said Officer, the suggestions/objections received from the general public and the say of the said Corporation and after consulting the Director of Town Planning, Maharashtra State, the Government is of the opinion that the proposed modification is required to be sanctioned with some changes for the said Corporation.

Now, therefore, in exercise of the powers conferred upon it under section 37(1AA) (c) of the said Act, the Government hereby:-

1. Sanctions the proposed modification with some changes so as to incorporate the Regulation for Inclusive Housing in the Development Control Regulations of the said Corporation, as described more specifically in the Schedule appended hereto.

2. Fixes the date of publication of this Notification in the Official Gazette as the date of coming into force of this modification.

3. Directs the said Corporation that in the Schedule of Modifications sanctioning the said Regulations, after the last entry, the Schedule referred to at (A) above shall be added.

By order and in the name of Governor of Maharashtra,

(Sanjay Banait)
Under Secretary to Government

SCHEDULE

(Accompaniment to Notification No: TPB 4312/CR-45/2012/ (2)/UD-11 Dated 8th November, 2013)

The following provisions regarding Inclusive Housing are incorporated in the Development Control Regulations of Greater Mumbai:-

Regulation for Inclusive Housing

(1) (a) For the sub-division or layout of the land admeasuring 4000 sq.meters or more for residential purpose, minimum 20% of the net plot area shall have to be provided —

(i)Either in the form of developed plots of 30 to 50 sq. meters size for Economically Weaker Sections/Low Income Groups (EWS/LIG), (hereinafter referred to as "affordable plots") in which plots of 30 sq.meters size shall be kept for EWS.

OR

(ii)In the form of equivalent 20% Net Plot Area for constructing EWS/LIG tenements, which area shall be handed over to MHADA at the land rate prescribed in the Annual Statement of Rates prepared by the Inspector General of Registration, Maharashtra State, Pune (hereinafter referred to as ASR) of the year in which final approval is accorded to such sub-division or layout.

(b) The Landowner/Developer shall sell the affordable plots to MHADA at one place in lieu of equivalent FSI to be utilized in the remaining plots. If MHADA declines to purchase the same within a reasonable time of six months, he can sell the affordable plots in the open market, in such case additional FSI of affordable plots shall not be admissible.

(2) For a plot of land, admeasuring 4000 sq.meters or more to be developed for a Housing Scheme consisting of one or more buildings (hereinafter referred to as 'the said Scheme'), EWS/LIG Housing in the form of tenements of size ranging between 30 to 50 Sq.meters, (hereinafter referred to as 'affordable housing tenements’) shall be constructed at least to the extent of 20% of the basic zonal F.S.I., subject to the following conditions.:--

1. The Built up Area of the EWS/LIG tenements constructed under the Scheme shall not be counted towards F.S.I.

2. The Landowner/Developer shall construct the stock of the Affordable Housing Tenements in the same plot and the Planning Authority shall ensure that the Occupation Certificate for the rest of the development under the said Scheme is not issued till the Occupation Certificate is issued for the Affordable Housing Tenements under the said Scheme.

3. The completion of the Affordable Housing Tenements under the said Scheme, along with necessary particulars, including a copy of the Occupation Certificate granted by the Planning Authority in respect thereof, shall be immediately intimated by the Landowner/Developer to MHADA. Upon such intimation, MHADA , within a period of six months from the date of receipt of such intimation, shall either purchase such Affordable Housing Tenements or allot such tenements to the allottees selected by MHADA through a system of lottery, drawn after such Affordable Housing Tenements have been granted Occupation Certificate and thereafter, the Land Owner/Developer shall dispose of such tenements to MHADA or such allottees, as the case may be, at the construction rates in the ASR applicable to the land under the Scheme, on the date of grant of Occupation Certificate to such Affordable Housing Tenements .

4. The Landowner/Developer may also be permitted to utilize 1/4 of the total 20% FSI, earmarked for Affordable Housing towards construction of Affordable Housing Tenements in the form of Service Quarters on the same plot but in a separate block which shall have to be sold as service quarters only to the purchasers of free sale flats under the said Scheme.

5. There shall be no obligation to construct Affordable Housing Tenements in accordance with these provisions in any Housing Scheme or residential development project wherein owing to the relevant provisions of the Development Control Regulations; more than 20% of the Basic Zonal FSI is required to be utilized towards construction of residential tenements for EWS, LIG or MIG.

(3) Amalgamation of affordable plots/affordable tenements shall not be allowed.

(4) These provisions shall be applicable prospectively and shall not be applicable to any Housing Scheme or residential development project wherein Commencement Certificate had been issued prior to the date of coming into force of these provisions and was valid on such date.

By order and in the name of Governor of Maharashtra,

(Sanjay Banait)
Under Secretary to Government

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20% RESERVATION FOR EWS AND LIG UNDER AFFORDABLE HOUSING NO LONGER REQUIRED ON THE SAME PLOT–
A MOCKERY

The State Government (OLD), Urban Development Department, Mantralaya, Mumbai - 400 032 had issued a Notification on 8th November, 2013 stating that for the sub-division or layout of the land admeasuring 4000 sq.meters or more for residential purpose, minimum 20% of the Net Plot Area shall have to be provided either in the form of developed plots of 30 to 50 sq. meters size for Economically Weaker Sections/Low Income Groups (EWS/LIG) i.e. “affordable plots" in which plots of 30 sq.meters size shall be kept for EWS or in the form of equivalent 20% net plot area for constructing EWS/LIG tenements, which area shall be handed over to MHADA at the land rate prescribed in the Annual Statement of Rates prepared by the Inspector General of Registration, Maharashtra State, Pune of the year in which final approval is accorded to such sub-division or layout. (Refer to the said Notification in our this Website under the Head “Realty Updates” under Sr. No. 10)

In short, it was notified that any development of a layout exceeding an area of 4,000 Sq. meters will require reservation of 20% of the Built up Area for EWS and LIG households. (Under State Government, the EWS means monthly household income limit of Rs.16,000 per month and LIG means monthly household income limit of Rs.16,000 to Rs.40,000 per month with eligibility of 300 - 600 sq ft carpet area). Incentive FSI of 20% will be provided to the developer and tenements will be handed over to MHADA at the Ready Reckoner Rate.

However, due to severe antagonism with serious concern from the City’s Developers, the State Government (NEW) has now amended the Affordable Housing Policy that stipulated that a portion of the plots be kept to build low-cost homes free of cost.

The amendments proposed by the Urban Development Department stipulate that the builders now need not have to carve out 20% of their plots for affordable housing. Instead, they can construct cheaper tenements anywhere within the same administrative ward. The Government has not clarified the % or ratio or the number of such tenements. However, it is a question as to how many builders have plots in the same ward or if not available, can they buy out another plot in the same ward to construct these tenements as also whether such vacant plots are available in the same ward. As an incentive, the Government has offered 50% free FSI to the Developers to build such tenements on alternative plots in the same ward.

The Developers on the other hand, have adversely reacted to such benefit and are planning to oppose it because as per their say, the Slum Rehabilitation Authority (SRA) provision already allows them to provide tenements in faraway wards.

The mandatory 20% Affordable Housing Scheme will not apply to the redevelopment projects of housing societies where the existing flats are having an area less than 600 sq. ft. It is not clear whether it is a carpet area or the built-up area. If the existing flats are over 600sq. ft, then the Developer will construct additional tenements but need not hand them over to the State Housing Authority, MHADA. The further confusion in the said relaxation is that these tenements will be constructed either in a separate block or in a separate wing in the same building and allotted to the housing society for use as “Service Quarters”. It is surprising that in redevelopment, what is the basis/logic or where is the need to construct “Service Quarters”.

This may further complicate the situation. It is most expected that it will lead to clash among the members of housing society on who should be allotted these tenements after the redevelopment is completed. The Government has further proposed a 300% premium on the "Applicable Rate" to be paid by such redeveloped societies if these “Service Quarters” are SOLD to the outsiders. What a ridiculous and preposterous proposal of the Government!

With regard to the applicability of the 20% reservation for affordable housing, the Government has clarified that the same will not be applicable to redevelopment projects for old and dilapidated buildings, slums, MHADA colonies, clusters and on defunct industry land as in such schemes, more than 20% of the Basic Zonal FSI is already utilized for low cost housing.

Despite the public undertakings like MHADA, SRA and MMRDA constructing few lakhs of affordable housing, yet it has reached a crisis point in Mumbai. An average salaried person can no longer afford to buy a house in Mumbai since it has the most unaffordable housing market in the country with around 30% of its under-construction housing units exceeding Rs.1crore. The tragedy of this city is that a 50% of Mumbai’s households earn less than Rs.20,000 per month.

The update in respect of various Public Housing Schemes is that during the year from 1995 to 2014, only two lakhs dwelling units have been constructed under State and Central Government Schemes and out of 4.6 lakhs dwelling units approved for construction by the Slum Rehabilitation Authority, only 33.7% have received the Occupation Certificates. No projects have taken off under Rajiv Awas Yojana (RAY) in Mumbai.

Various Policy Initiatives by Government of Maharashtra:
Affordable Housing schemes in Maharashtra focus on incentivizing projects through higher Floor Space Index and redevelopment of old buildings and slums. Briefly, the current policy initiatives include:

Special Township Policy: Under the Policy, a contiguous minimum area of 40 hectares can be developed as a township and 33.3% of the tenements or 20% of the total built up area is to be used for EWS/LIG houses. The Developers are provided additional 20% FSI over the Zonal FSI/FAR allowed in the Special Township.

Cluster Redevelopment: A cluster of old, dilapidated buildings or slums can be clubbed in a cluster for redevelopment, to be defined as ‘Urban Renewal Cluster’ of a minimum Size of 4,000 Sq.meters to 10,000 Sq.meters. Redevelopment can be done by MHADA, MCGM, Developers or Societies themselves.

Development/Redevelopment on MHADA land: In all Urban Areas, the FSI for development on MHADA land has been increased to 2.5; 60% tenements are to be kept aside for EWS/LIG/MIG housing. For redevelopment of old MHADA colonies in Mumbai, FSI of 3 has been granted. Societies have the option to redevelop their buildings either through Private Developers, or through MHADA.

Redevelopment of old and dilapidated buildings: In the Island City of Mumbai, the buildings are very old and many of them are in dilapidated condition. Under the DCR 33(7), FSI/FAR of 3 is allowed for Redevelopment of these Cess Buildings.

Inclusive housing in layouts: Any development of a layout exceeding an area of 4,000 Sq. meters will require reservation of 20% of the Built up Area for EWS and LIG households. Incentive FSI of 20% will be provided to the developer and tenements will be handed over to MHADA at the Ready Reckoner Rate.

Slum Rehabilitation Scheme: In‐situ, transit and Project Affected Person (PAP) Schemes for slum rehabilitation undertaken by Slum Rehabilitation Authority, MHADA and MMRDA.

Affordable Housing in Mumbai Metropolitan Region: MMRDA’s rental housing scheme (2008) has been modified into an Affordable Housing scheme in November 2013. The private sector is offered incentive FSI in return for providing self‐contained tenements of 160 sq.ft carpet area along with the appurtenant land to MMRDA free of cost which shall be allotted to eligible low income group households.

Affordable Housing in Partnership: The scheme of Affordable Housing in Partnership aims to encourage private sector participation in creation of affordable housing stock, recognising that mere efforts of the Government would be insufficient to address the housing shortage. The Central Government will assist in construction of houses for EWS/LIG as part of Group Housing Schemes of the States/UTs. These housing schemes will be implemented by the States/UTs through partnership with private sector or public sector including Para State Bodies such as MHADA.

The three main state agencies responsible for implementation of these schemes are MHADA, Slum Rehabilitation Authority (SRA) and MMRDA.

The affordable homes are available only in far-flung places of Mumbai where also, the major numbers of flats have been purchased by the investors and not the needy users. The ever-growing price rise and higher attention towards premium projects in the city has restricted the purchasing capacity a common man.

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FROM THE DESK OF MUNICIPAL COMMISSIONER

Sub: - Orders passed by Hon'ble Supreme Court of India: In Civil Appeal No. 11150 of 2013 (@ out of Special Leave Petition (Civil) No.33402/2012

Ch. E. (D.P.) and C.F.O. shall note the orders dated 17th December 2013 passed by Hon'ble Justice H.L Gokhale & J. Chelameswar in the subject matter. A copy of the said judgment is available on the website of Hon'ble Supreme Court of India. Hon'ble Supreme Court has passed certain orders in Para 60 of the aforecited judgment and the said judgment may be referred. Part of the said orders is narrated as follows, for the sake of ready reference.

“The minimum recreational space as laid down under Development Control Regulation (DCR) 23 cannot be reduced on the basis of DCR 38 (34). The recreational space, if any, provided on the podium as per DCR 38(34) (iv), shall be in addition to that provided as per DCR 23.

The second proviso to DCR 43(1) (A), concerning fire protection requirements, is held to be bad in law. We hold that even for the reconstruction proposals of plots up to the size of 600 sq. meters under DCR 33(7), open space of the width of 6 meters at least on one side at ground level within the plot, accessible from the road side will have to be maintained for the maneuverability of the fire engine, unless the building abuts two roads of 6 meters or more on two sides, or another access of 6 meters to the building is available apart from the road abutting the building.

The decision as contained in Clauses 2 (i) and 2 (iv) of Para 60 of the said judgment, will apply to those constructions where plans are still not approved, or where the Commencement Certificate (CC) has not yet been issued. All authorities concerned are directed to ensure strict compliance accordingly."

In view of the above, you are hereby directed to instruct all concerned officials to ensure strict compliance of the orders passed by Hon'ble Supreme Court of India, while processing the development proposals. Further, you may study the said order in detail, for any other actionable points at your end.

S. Kunte
S/d
20/12/2013
MUNICIPAL COMMISSIONER

Copy to: - Ch.E. (DP)/ C.F.O

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