Mumbai, the city of seven islands is India’s financial capital and also country’s most expensive housing market. Dr. Niranjan Hiranandani, CMD, Hiranandani Communities gives his perspective on Mumbai real-estate.
The consistent property price rise in Mumbai is replication of the equation – price equals demand versus supply. As supply is limited, given the island city’s space shortage as also policies that restrict how much space can be constructed on a plot of land; Mumbai has always witnessed price movement which is upward.
The maze of regulations and restrictions, from height restrictions due to Airport Authority of India to constraints and restraints due to CRZ and Mangroves (which effectively impact a large area given Mumbai and its suburbs are on the seashore) – policies that seek to enable housing, like the policy on affordable Housing allowing 60sqm carpet area for rest of the country and half that, 30sqm in Mumbai and suburbs and bureaucratic delays, are some of the reasons.
When we talk about Development Plans for a megalopolis like Mumbai – it has to come up with path-breaking new initiatives, plug some gaps that the city has been suffering from for long and create something new that is ‘iconic’.
Any move that enhances the quantum of land available for affordable housing is welcome, and the Maharashtra Government’s move to use more of Mumbai’s mill land for affordable housing (Amendments to DCR 58) is also welcome. Speedy planning and quick implementation are the keys for this to succeed.
For instance, Housing for All by 2022 is a wonderful initiative which include subvention in home loans taken for buying affordable homes. Rural fund allocation under PMAY has been raised from Rs 15,000 crore to Rs 23,000 crore, with the target to build 10mn homes by 2017-18. The actual construction of such large numbers will be possible when private sector developers join hands with the government, and work on a Public Private Partnership (PPP) model.
However, economical housing is a complicated issue, and does not have a single solution that fits all micro-markets in Mumbai, suburbs and the Mumbai Metropolitan Region (MMR). The primary challenge is availability of land at price-points. While the state and central governments both have land in Mumbai on which such projects can take place, recent efforts to identify such land have not been as successful as one would have expected. So, the workable alternatives include SRA projects, but even in such projects there are issues which need to be sorted out. For example, Dharavi is a huge swath of land, located in a central location vis-à-vis the island city and suburbs. So, any planned re-development will have a major impact, and will ensure not just proper economic growth but also planned urban restructuring, which will obviously be good for the city.
Cluster Redevelopment is another way to increase the number of individual buildings or houses in a redevelopment proposal. With larger space to develop, common utility spaces can be shared among many. It enables centralized access from a traffic perspective, higher floors as cluster increases the space for construction at ground level in effect allowing the building to soar higher. One way of looking at this is it promotes the spirit of self-help with cooperation and the process of living together in a community; from a fiscal perspective, it is about the advantages of economies of scale.
I hope that the vision for Mumbai will take cognizance for affordable housing. The first initiative has to be proper planning, beginning with the City’s Development Plan. Then, zoning of the city& the right policies that make it possible, taxation benefits, reduced time for permissions and clearances, higher FSI, single window clearances and most importantly , availability of land at an affordable price-point to enhance low and middle income housing supply.