Maharashtra Government Proposes Reforms to Boost MHADA Redevelopment Projects in Mumbai

The Maharashtra government is planning to amend the Development Control and Promotion Regulations (DCPR) 2034 for Greater Mumbai to improve the viability of redevelopment projects undertaken by the Maharashtra Housing and Area Development Authority (MHADA). This move follows MHADA's request for modifications to make its housing schemes more financially sustainable.

The proposed amendments focus on two key regulations:

1. **Regulation 31(3):** Currently, builders receive extra 'fungible' construction area free of premium only on the existing built-up area of a project. The government wants to extend this benefit to the rehabilitation area as well, making it easier for developers to rehouse existing tenants. 2. **Regulation 33(5):** MHADA allows additional construction area up to a Floor Space Index (FSI) of 3.00 by charging a premium. The proposed amendment will clarify that this extra FSI will be calculated on the total rehabilitation entitlement, not just the existing area, helping projects balance rehabilitation needs with saleable components more effectively.

Impact: These modifications are expected to significantly improve the economics of MHADA redevelopment projects. They aim to streamline project execution by removing premium burdens on tenant entitlements and aligning fungible benefits with actual rehabilitation requirements. Industry experts believe these changes will unlock many stalled and complex MHADA colony redevelopments across Mumbai, particularly in areas with large, old housing stock needing replacement. This could lead to increased construction activity and investment in the sector. Impact Rating: 8/10

Terms Explained: * **Redevelopment Schemes:** Projects involving the demolition of old buildings and the construction of new ones to upgrade living conditions or infrastructure. * **Maharashtra Housing and Area Development Authority (MHADA):** A government agency responsible for housing development and planning in Maharashtra. * **Development Control and Promotion Regulations (DCPR) 2034:** The official rules governing land use and building construction in Greater Mumbai, updated for the year 2034. * **Fungible Construction Area:** Additional construction space developers can build, often beyond standard limits, sometimes subject to fees or premiums. * **Rehabilitation Area:** The space designated for rehousing existing residents or tenants whose properties are being redeveloped. * **Floor Space Index (FSI):** A ratio that determines the maximum permissible built-up area on a given plot of land.