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Maharashtra is one of the most densely populated states in India. A large chunk of the state’s metropolitan population, unfortunately reside in old, dilapidated if not totally battered buildings (societies) that are in dire need of restoration. In 2019, Maharashtra Housing and Area Development Authority (MHADA) identified approximately 14,000 buildings in Mumbai that were in such a state requiring immediate redevelopment.
Many of these societies are often perturbed with dallying approvals, long - term delays, financial roadblocks, fraudulent developers, and several facing abandonment of the projects entirely. The rigamarole behind merely finding the right developer to take on a project for redevelopment overwhelms homeowners.
To curb this, a number of homeowner groups are now “taking matters into their own hands” by appointing their own architects, contractors and project management consultants to execute the redevelopment of their societies. These can be single stand-alone buildings or housing societies of more than one building. These are known as Self-Redevelopment projects.
Self-redevelopment is a process wherein residents shoulder the onus of revamping a society instead of the builder. The process ensures more control over the project and mitigates the risk of delays and misuse of funds. For funding self-redevelopment, the society members usually resort to bank loans. A recent report suggests that nearly 580 housing societies are accelerating towards self-redevelopment.
Self-Redevelopment outweighs the benefits that homeowners reap from an otherwise short-changed value received from a developer. These benefits include larger carpet areas and a better FSI, a surplus which can be distributed amongst society members and most importantly, total control of the entire project from top to toe.
The Government of Maharashtra recognizes the gravity of this issue and in an effort to address the challenges faced by these homeowners, has decided to set up a new authority to offer a waiver in stamp duty to encourage the self-redevelopment. In addition, they have further simplified the process with the introduction of a new policy. Under this policy, approvals for such projects will now be granted within a span of three months which aims to encounter delays due to the lengthy approval procedures, which can lead to increased project costs and an extended project- timeline.
The government has also incentivised redevelopment of old buildings through tax benefits, clearances for self-redevelopment and provision of loans through central district cooperative banks in each district. As far as the projects in Mumbai are concerned, the Mumbai Central District Cooperative Bank is assigned to provide financial assistance.
By reducing the time taken for obtaining necessary clearances, permits and licenses, the government aims to empower housing societies to take charge of their redevelopment plans. This initiative is intended to expedite the redevelopment process as means to improve the experience for housing societies looking to undertake self-redevelopment projects. The government's new policy to fast track approvals is expected to be a game-changer in India’s route to better developed infrastructure.
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