Builders wants clarity on reserving flats for EWS

mhada flats




By Accommodation Times News Service

The Maharashtra chapter of the Confederation of Real Estate Developers Association of India (Credai) on Thursday welcomed the state government’s notification stipulating reservation of 20% flats for economically weaker sections, in schemes on one acre land, but said the government resolution needed more clarity.

The state government has come up with an affordable housing policy. As per the notification issued on November 8 by Sanjay Banait, under secretary, urban development department, every builder having construction on one acre of land or above will have to reserve 20% of the flats of the new construction for the economically weaker section and low income groups. It said the modification would be applicable to the cities with over 10lakh population which includes Mumbai, Pune, Thane, Navi Mumbai, Nashik and Nagpur.

It said 20% would be inclusive of both the flats and plotting schemes and would not be included in the builders floor space index (FSI). The area of this single built flat should compulsorily range in between 300-500 sq. ft. On project completion these 20% flats should be handed over to Maharashtra Housing and Area Development Authority (MHADA) at the prevailing market rate of the construction cost. The flats would be allotted by MHADA strictly on the basis of special lottery method. But if the MHADA doesn’t take the possession within 6 months, which is made mandatory by the state government, then the builders can put the flat on sale but at the rate of MHADA (construction cost).

Credai Maharashtra president Anant Rajegaonkar said, “We appreciate the government’s decision for increasing the land limit to one acre. The present notification is applicable for cities having population more than 10lakh. At present, the city below the 10lakh population has been exempted, but the notification stated that it may be considered at a later stage. We feel the need for exemption in such cities as the demand for small flats is low and it would result in pilling up of inventories.”

Shantilal Kataria, vice president, Credai Maharashtra, said, “We welcome the government’s decision to provide housing facility to economically weaker section at a low cost. This may help cut down slums in the city and provide affordable housing to weaker sections. The only difficulty is its application for plotting schemes. As MHADA is going to buy the 20% flats within the period of 6 months on completion of project, it would block the investments and would also lead to increase in expenses at the builders end. This may in turn affect the rates of flats,” he said.

He suggested that MHADA should allot the 20% flats during construction itself to prevent such issues. The scheme should also exclude the application of this notification in redevelopment projects. He said Credai would follow up the matter with the chief minister.


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