Navigating Mumbai's Housing Society Redevelopment: A Cautionary Tale
Explore the challenges and pitfalls of housing society redevelopment in Mumbai, and learn how to make informed decisions.
Mumbai Real EstateHousing Society RedevelopmentReal Estate ConsultancyRedevelopment ChallengesDeveloper AgreementsReal EstateSep 14, 2025
The developer gave no proper information for the next two years, and residents were left to pay rent on their own, even though their building had already been demolished. By 2016, the developer cited financial troubles and sought to renegotiate the agreement, reducing the promised 40% extra space to 20%. The members reluctantly signed a supplementary development agreement, but progress stalled again after Demonetisation.
In 2018, the developer admitted he could not complete the project and promised to help find a replacement. After years of uncertainty, the society finally brought in another developer in 2023, and work resumed in 2024, but with a much-reduced offer of just 10% additional space. “We have suffered huge losses, not only the 30% extra area that was denied to us, but also ten years of paying rent on our own, along with many other hardships that cannot even be quantified,” a society member said.
Real estate consultants and developers advise that society members should be offered only moderate increases in their flat area to ensure the long-term viability of redevelopment projects. According to Gulam Zia, Senior Executive Director - Research, Advisory, Infrastructure and Valuation at Knight Frank India, some societies in Mumbai, such as in Juhu or Bandra, have been offered additional area, ranging from flats 50% to up to 155% larger. However, Zia noted that deals have become irrational in some cases, especially when developers push prices beyond ₹1 lakh per sq ft, and homeowners need to be cautious.
According to a report titled 'Upgrading Mumbai- The redevelopment story' released by Knight Frank India, in locations where sale prices are below ₹40,000 per sq ft, developers ideally cannot share more than 30–35% of the total area with the society. This ratio moves up to 35–40% in markets priced between ₹40,000 and ₹60,000 per sq ft. However, even in locations as premium as ₹75,000 per sq ft, the share to society members cannot practically exceed 50% of the total built-up area.
Developers say that redevelopment has turned into a numbers game, especially in areas like Andheri, Bandra, and Khar. A Bandra-based developer, who wished to remain anonymous, said, “I recently walked away from a deal after offering 75% additional area to a housing society seeking redevelopment. That was the maximum I could offer, but the society is now negotiating with two other developers promising nearly 100% extra area. I’m very clear that I don’t want to overtrade right now.”
Sharan Babani, promoter of Satguru Builders, a boutique developer with projects in Mumbai's Bandra and Khar, noted that most redevelopment society committees tend to focus on getting the 'best deal.' This usually means negotiating for the highest rent during construction, the biggest corpus, and the most additional area per flat. However, Babani emphasized that choosing a developer based on slightly better figures instead of capability and track record is like choosing a surgeon based on price. It might seem like a win today, but it can turn into a lifetime regret.
Efficient, well-planned layouts are often overlooked. Construction quality and workmanship get diluted. Long-term durability takes a back seat. Aesthetic value is ignored. And timeliness, along with professional execution, is frequently sacrificed. “Choosing a developer based on slightly better figures instead of capability and track record is like choosing a surgeon based on price. It might seem like a win today, but it can turn into a lifetime regret,” Babani said.
According to the Knight Frank India report, as many as 44,277 apartments worth ₹1.30 lakh crore are expected to enter Mumbai’s real estate market through the redevelopment segment by 2030. The free-sale component from society redevelopments is projected to generate around ₹7,830 crore in stamp duty and ₹6,525 crore in Goods and Services Tax (GST). The report notes that Borivali, Andheri, and Bandra micro-markets emerge as the top three redevelopment hotspots, together contributing over 139 acres of activity. By contrast, Central and South Mumbai recorded just 43 redevelopment agreements, underscoring the challenges of fragmented ownership, legacy tenancies, and higher entry costs.
According to the report, a total of 910 housing societies have signed development agreements (DA) since 2020, unlocking nearly 326.8 acres (1.32 mn sq m) of potential land area in the Mumbai limits, based on Floor Space Index (FSI) utilisation norms and average unit sizes across the regions. The report notes that, according to 2017 estimates of the Mumbai Civic Body, also known as Brihanmumbai Municipal Corporation (BMC), an estimated 160,000 societies were over the age of 30 and eligible for redevelopment.
Frequently Asked Questions
What are the main challenges faced by housing societies during redevelopment?
Some of the main challenges include financial troubles from developers, delays in project completion, and the need to pay rent for temporary accommodation. Additionally, renegotiating agreements and finding reliable developers can be difficult.
Why do developers sometimes reduce the promised additional area?
Developers may reduce the promised additional area due to financial difficulties or market conditions. They may also face challenges in meeting the initial commitments, leading to renegotiations with the housing societies.
What should housing societies consider before signing a redevelopment deal?
Housing societies should consider the developer's track record, financial stability, and the terms of the agreement. They should also seek moderate increases in flat area to ensure long-term viability and avoid overly ambitious promises.
How can housing societies ensure the quality of construction in redevelopment projects?
Housing societies can ensure quality construction by choosing developers with a proven track record, conducting regular inspections, and involving independent quality assurance experts. Clear and detailed contracts can also help in maintaining standards.
What is the projected impact of redevelopment on Mumbai's real estate market by 2030?
By 2030, it is projected that 44,277 apartments worth ₹1.30 lakh crore will enter Mumbai’s real estate market through the redevelopment segment. This will generate significant revenue in stamp duty and GST, and contribute to the city's urban development.
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