Maharashtra's Draft Housing Policy: A Real Estate Focused Agenda

The recently released draft housing policy for Maharashtra is more of a house-building prospectus than a comprehensive housing policy. It focuses heavily on real estate interests and fails to address the broader social infrastructure needs.

Housing PolicyMaharashtraReal EstateUrban Housing ShortageSocial InfrastructureReal Estate MaharashtraOct 06, 2024

Maharashtra's Draft Housing Policy: A Real Estate Focused Agenda

Real Estate Maharashtra:For the sake of clarity, we must consider the recently released draft housing policy for Maharashtra a misnomer. It might have been better understood by citizens if it was described as a house-building prospectus. A true housing policy should recognize that housing is more than just erecting tenements. People are expected to inhabit these houses, and therefore, they require open spaces, streets, pavements, healthcare facilities, schools, public transportation, and more. Who will provide these amenities? The ‘strategic initiatives’ listed in the document, such as more incentives to private builders, promotion of public-private partnerships, reforming approval processes, and creating an investor-friendly environment, have little to do with social infrastructure creation. They also fail to address the existing issues of obsolescence, congestion, homelessness, and vacancy.\n\nThe primary goal of the 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) in Maharashtra. Since 9 lakh houses have already been built under various government schemes, the Housing Policy aims to achieve the remaining 10 lakh houses by 2027. The figure of 19.4 lakh houses comes from a report by the technical group on urban housing shortage by the housing ministry, prepared in 2012 (TGHS Report). However, the Maharashtra Housing Policy borrows this figure without incorporating the reasoning and recommendations from the TGHS report.\n\nThe TGHS report had a sensible assessment of ‘housing shortage.’ It argued that the housing shortage should be calculated by counting families living in ‘unacceptable’ houses, those that cannot be improved or are more than 80 years old. It also included families living in congested or overcrowded houses and homeless households. The report noted that the highest demand for new houses is for EWS households (56%), followed by LIG households (39.5%), and then MIG households (4.5%). Unfortunately, the new Maharashtra housing policy does not break down the 19.4 lakh target based on these categories, leading to a potential mismatch between housing provision and actual needs.\n\nThis mismatch is particularly evident when we consider the data on vacant houses in Maharashtra. 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. The policy completely ignores this aspect, which could significantly impact the housing shortage.\n\nThe TGHS report recommended four broad strategies to address the housing shortage providing newly constructed dwelling units on greenfield sites, improving and upgrading low-income housing stock, bringing vacant houses into the housing market through taxation and incentives, and facilitating the reconstruction of old and dilapidated units. The new housing policy, however, is geared towards appealing to the real estate industry. It mandates regular consultations with stakeholders, including developers, investors, and homebuyers, to ensure that policy reforms address industry needs.\n\nThe policy proposes a range of regulatory ‘reforms’ for both new developments and re-development, with a significant focus on making re-development schemes in Mumbai more attractive for developers. This is problematic because re-development primarily creates replacement houses, not new housing stock, and often caters to the luxury market.\n\nThe tendency of plans and policy documents to align with real estate interests rather than addressing the housing sector’s challenges has been noted. Even the Supreme Court has expressed concern about the independence of statutory authorities, suggesting the possibility of regulatory capture. Development authorities often prioritize making projects attractive to market actors to generate revenue or achieve policy objectives, leading to a conflict of interest. The basic rights of citizens, such as the right to voice concerns, livelihoods, a healthful environment, and public goods, are often seen as costs or impediments to development.\n\nIt is no surprise that the housing policy aims to facilitate house construction for profit rather than fulfilling the social need for homes. The entanglement of government and developer interests means that plans and policies often reflect industry aspirations rather than the public interest.

Frequently Asked Questions

What is the primary goal of the Maharashtra Housing Policy?

The primary goal is to address the housing shortage of 19.4 lakh houses for EWS, LIG, and MIG categories by 2027.

Where does the figure of 19.4 lakh houses come from?

The figure comes from the 2012 Technical Group on Urban Housing Shortage (TGHS) report prepared by the housing ministry.

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

The strategies include providing newly constructed dwelling units on greenfield sites, improving and upgrading low-income housing stock, bringing vacant houses into the market, and facilitating the reconstruction of old and dilapidated units.

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

The policy mandates regular consultations with stakeholders, including developers and investors, to ensure that reforms address industry needs, often at the expense of broader social infrastructure and housing needs.

What is the concern about regulatory capture mentioned in the Supreme Court's judgment?

The Supreme Court expressed concern that statutory authorities may be influenced by real estate interests, leading to a conflict of interest and prioritizing profit over social needs.

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