Land in Mumbai city which is surrounded by water on three sides is scarce and has a premium. Property price in some regions of the financial capital of the country is as much as Rs 1 lakh per sq ft. Yet, 5800 buildings have been lying in stalled condition for the last 18 years.
More than a year ago as per the Maharashtra government 1,25,922 families ie; 7 lakh people in Mumbai city alone have been pushed to live on the streets. And, the numbers have only increased since then.
After NCR, Mumbai has the maximum no. of stalled and incomplete projects. With builders cornering huge tracts of land, the stalemate has not only spolit Mumbai's skyline but also locked its precious land indefinitely.
Sectoral experts and stakeholders Governance Now spoke to, said that as much as the availability of finance is a problem for builders; diversion of funds and greediness on part of errant and greedy builders and residents had led to projects getting stuck indefinitely.
Former metropolitan commissioner MMRDA and former commissioner, Thane Municipal Corporation said that financial mismanagement on part of residents and developers, disagreements, different clearances and planning authorities, rent-seeking behaviour of tenants and residents and many other problems lead to projects getting stalled.
Niranjan Hiranandani, co-founder, of Hiranandani Group and vice chairperson, NAREDCO said that approvals, markets and capital are issues in most stuck projects. He said, cash flow is an issue in most stalled projects and at least 25% of such cases can be taken up by structured corporate companies provided the developer is ready and approvals are in place and there is agreement among the residents.
BJP leader Kirit Somaiya said in most cases due to fraud, forgery, wilful defaults etc, projects may land in courts. Courts put stay on such projects or in other cases investigation agencies may take up such cases. He said such cases have led to the criminal waste of assets and land.
On massive unsold inventory with the developers in South Mumbai alone advocate and consumer activist, Anand Patwardhan said, with over 90,000 unsold projects lying unsold and under the prevailing situation the builder will prefer to stall the project rather than construct free homes.
Hiranandani added, "Whenever the markets go down, requirements of capital go up." He acknowledged that the saleability of apartments with the developers has come down.
RA Rajeev said that housing is an imperfect market with a mismatch in demand and supply. Inefficiency creeps in with rent-seeking behaviour and expecting more money. He called for the direct intervention of the government in housing to resolve existing problems.
However, Somaiya countered saying the government's job is to formulate and implement policies. He said 95% of land in Mumbai is governed by BMC.
Somaiya, further said that world over rental housing is an emerging trend and added that unsold inventory of over 1 lakh homes in the city of Mumbai should be given for rental housing.
He also said that in cases of defaults by builders, financial institutions can take over such projects and give them rent.
While the RERA Law was ushered in 2017, it applies to the new sale component and does not apply to the redevelopment of old and dilapidated buildings of MHADA, SRA, cooperative housing societies and staff quarters where the residents are cheated by builders.
On this, Hiranandani said most redevelopment projects are under SRA or redevelopment under RERA and the authority is empowered to intervene and sort the issues. He observed that many problems have been sorted by conciliation panels even as he added that complex issues require the intervention of all stakeholders.
However, Patwardhan countered saying in his own experience he has seen that, unlike Consumer Protection Act, RERA is builder oriented law and does not penalise the errant builder or ever helped the consumer to get his flat for which he has already paid.
As a solution to come out of this impasse, the experts unanimously voiced for self redevelopment.
Calling it a wonderful concept, Patwardhan said with a project management consultant on board along with a lawyer, architect and a chartered accountant, the society can take all benefits which otherwise would be taken away by the developer. Now with banks giving loans to members for self redevelopment keeping the land mortgaged implementation should not be a problem anymore.
Somaiya too encouraged consumers to opt for self-redevelopment and observed that greed on part of both the consumer and developer have led to stalling of projects. He said, the legislature, judiciary, regulator and builders associations have to come together to push the concept. He assured that he will personally discuss the issue with the chief minister, Eknath Shinde and deputy chief minister, Devendra Fadnavis to formulate a policy with a time-bound action plan with a monitoring group on a war footing.
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