Maharashtra’s Draft Housing Policy: A Real Estate Bias

The recently released draft housing policy in Maharashtra seems to prioritize real estate interests over the actual needs of its citizens, particularly the Economically Weaker Sections (EWS), Low Income Groups (LIG), and Middle Income Groups (MIG).

Maharashtra Housing PolicyReal EstateEws Lig MigHousing ShortageUrban HousingReal Estate MumbaiOct 06, 2024

Maharashtra’s Draft Housing Policy: A Real Estate Bias

Real Estate Mumbai:For the sake of clarity, the recently released draft housing policy for Maharashtra should be considered a misnomer. Instead of a housing policy, it reads more like a house-building prospectus. A comprehensive housing policy should recognize that housing is more than just erecting tenements. Houses require open spaces, streets, pavements, healthcare facilities, schools, public transportation, and more. But who will provide these essential amenities? The document lists several strategic initiatives, such as more incentives for private builders, promotion of public-private partnerships, and reforming approval processes, all of which prioritize an investor-friendly environment. However, these initiatives have little to do with social infrastructure creation or addressing existing issues such as obsolescence, congestion, and homelessness.\n\nThe primary goal of the policy is to overcome the housing 'shortage' of 19.4 lakh houses for EWS, LIG, and MIG in Maharashtra. Since 9 lakh houses have already been built under various government schemes, the policy aims to achieve the remaining 10 lakh houses by 2027. The figure of 19.4 lakh houses comes from a 2012 report by the technical group on urban housing shortage by the housing ministry (TGHS Report). However, the Maharashtra Housing Policy borrows this figure without considering the underlying reasoning and recommendations.\n\nThe TGHS report provided a sensible assessment of 'housing shortage.' It recommended counting families living in 'unacceptable' houses, those that cannot be improved or are more than 80 years old. It also considered families living in congested or overcrowded houses and the homeless. The report showed the highest demand for new houses is for EWS households (56%), followed by LIG households (39.5%), with a minimal demand for MIG and above (4.5%). The report emphasized the importance of avoiding a mismatch between those for whom houses are being built and those who actually need them.\n\nUnfortunately, the new Maharashtra housing policy does not break down the 19.4 lakh target based on EWS, LIG, and MIG shares. It simply states that the housing shortage is for all three categories, without assessing the demand or targets for each. This mismatch is evident when considering the data on vacant houses in Maharashtra, which the policy completely ignores. According to the 2011 Census, Maharashtra has 37.68 lakh vacant houses, with Mumbai alone having 4.79 lakh. This number is 3.7 times the target that the policy aims to achieve.\n\nBy ignoring the TGHS report's recommendations, the new housing policy fails to incorporate its four broad strategies providing new dwelling units on greenfield sites, facilitating improvement and upgradation of low-income housing stock, bringing vacant houses into the market through taxation and incentives, and facilitating the reconstruction of old and dilapidated units.\n\nThe new policy instead focuses on appealing to the real estate industry. It mandates regular consultations with stakeholders in the housing sector, including developers, investors, and homebuyers, to ensure that policy reforms address the industry's needs. The policy proposes various regulatory 'reforms' for new developments and redevelopments, but it lacks details on how these will address housing demand. A significant focus is on making re-development schemes in Mumbai more attractive for developers, which is counterproductive since redevelopment primarily creates replacement houses, not new housing stock. It primarily benefits the luxury housing market.\n\nThis bias towards real estate interests raises questions about why plans and policies seem to cater to the industry rather than the housing sector's challenges. Even the Supreme Court has expressed 'serious concern' about the independence of statutory authorities, suggesting a potential 'regulatory capture.' Development authorities often prioritize making projects profitable rather than enforcing social infrastructure norms and ensuring quality construction.\n\nCitizens' basic rights, including the right to voice concerns, livelihoods, a healthful environment, and public goods, are often seen as costs or impediments to development. Plans and policies, often prepared by private consultants, reflect industry aspirations rather than public interest. It is no surprise that the housing policy aims to facilitate house construction for profit rather than homes for people.

Frequently Asked Questions

What is the main goal of the Maharashtra Housing Policy?

The main goal of the Maharashtra Housing Policy is to overcome the 'shortage' of 19.4 lakh houses for Economically Weaker Sections (EWS), Low Income Groups (LIG), and Middle Income Groups (MIG) by 2027.

Where does the figure of 19.4 lakh houses come from?

The figure of 19.4 lakh houses comes from a 2012 report by the technical group on urban housing shortage by the housing ministry (TGHS Report).

What are the four broad strategies recommended by the TGHS report?

The TGHS report recommended: 1) Providing new dwelling units on greenfield sites, 2) Facilitating improvement and upgradation of low-income housing stock, 3) Bringing vacant houses into the market through taxation and incentives, and 4) Facilitating the reconstruction of old and dilapidated units.

Why is the new housing policy criticized for its focus on real estate?

The new housing policy is criticized for its focus on real estate interests, such as more incentives for private builders and making re-development schemes in Mumbai more attractive for developers, without addressing the actual housing needs of EWS, LIG, and MIG.

What is the number of vacant houses in Maharashtra and Mumbai?

According to the 2011 Census, Maharashtra has 37.68 lakh vacant houses, and Mumbai alone has 4.79 lakh vacant houses.

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