Mumbai, the city that never sleeps, is facing a silent crisis: a large number of its older buildings are aging, making redevelopment a necessity. However, getting these projects off the ground has often been difficult, especially for those managed under the Maharashtra Housing and Area Development Authority (MHADA). These massive schemes, involving thousands of families, frequently stall because the math simply doesn’t add up for developers.
The good news is that the Maharashtra government has stepped in with a plan to change the rules of the game. They have proposed key adjustments to the city’s main building guidelines, known as the Development Control and Promotion Regulations (DCPR), specifically to make MHADA redevelopment financially attractive and feasible. The goal is clear, to accelerate the process of replacing unsafe, old structures with modern and safe homes.
Making the numbers work, two major changes
The core of the issue lies in incentives. Developers only take on a redevelopment project if the revenue generated from selling new, free-market flats is enough to cover the cost of construction and the free, new homes provided to the existing tenants. The proposed changes directly improve this financial equation in two ways:
1. The fungible area boost
One of the most important changes relates to the “fungible” construction area. Think of a fungible area as a premium bonus of extra construction space that a developer can utilize. Currently, developers are given this premium space, free of charge, based only on the area of the old building they are tearing down.
The proposed amendment is a major expansion: the fungible area benefit will now be extended to include the entire rehabilitation area, that is, the total new living space constructed for the existing tenants. By linking the bonus to the size of the new homes given to residents, the government is providing a much larger, more valuable incentive. This makes big, complicated projects far more appealing to developers, ensuring that they have enough extra space to sell and make a profit.
2. Clarifying the building allowance (FSI)
The second change deals with the Floor Space Index (FSI), a critical term that dictates how much total area a builder can construct on a given plot of land. Under the current rules, MHADA projects can get an additional FSI (building allowance) by paying a fee (a premium).
The government is clarifying that this extra FSI will be calculated based on the total entitlement required to rehouse the existing tenants. Previously, the calculation was less generous. By basing the building allowance calculation on the full required housing needs of the residents, the government is making the fundamental foundation of the project’s size stronger. This adjustment balances the necessary space for the tenants with the space required for the developer’s sale component, leading to more efficient project execution.
Why this matters for Mumbai?
These seemingly technical adjustments are crucial for the city’s progress. They directly address the financial gaps that have kept many MHADA housing schemes stalled for years. Redevelopment is not just about new construction; it is about providing a safer, better quality of life for long-time Mumbaikars, often in core areas of the city.
Industry experts believe these changes will act as a significant catalyst, unlocking redevelopment across many large, aging MHADA layouts. It streamlines the business model, ensures tenant housing is prioritized and pushes forward the vision of a safer, more modern Mumbai.
The Urban Development Department has now officially invited the public and all concerned parties to submit their objections and suggestions on these proposed rules within one month. This public consultation is the final step before the modifications are officially implemented, paving the way for a major acceleration in the city’s housing transformation.
Also Read – The broken promise: Mumbai developer arrested in massive ₹10 crore contractor fraud
Disclaimer – This article is for informational purposes only and does not constitute legal or financial advice. Consult an expert for specific guidance.
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