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MHADA recommends changes in the existing development control regulations

Lakhs of tenants living in old cessed buildings in the island city will have less say in the redevelopment of their properties by landlords and builders if the state housing authority (Mhada) has its way.

Mhada has recommended changes in the existing development control regulations; it wants to curb tenants’ rights during redevelopment and offers far greater leeway to developers to take over such projects, many of them located in prime areas of south Mumbai where property rates are some of the highest in the world. Last month, Mhada CEO S S Zende sent a proposal to the BMC to incorporate its views in the city’s new development plan.

According to the proposal, the mandatory 70% consent required from tenants to allow redevelopment has been brought down to 51%. If two or more buildings are proposed for redevelopment, then 51% consenting tenants of both properties will be sufficient. For instance, if a chawl has 50 consenting tenants and the adjoining building has 10 large flats, then 51% of tenants of both the buildings works out to 31 tenants.So even if all the tenants occupying larger flats dissent, they will still be forced to join the redevelopment.

Under the new proposal, if a builder builds a rehab flat for a tenant occupying 1,500 sq ft, he gets 750-1,050 sq ft for free sale. Taking construction cost to be Rs 2,500 per sq ft and by investing Rs 65 lakh on building rehab and free sale of one flat, the developer can easily make a profit of Rs 10 crore per flat in Nepean Sea Road and Worli Sea Face, and minimum Rs 5 crore per flat in other areas of the island city . The earlier DCR would have given him half the revenue. “Mhada has officially requested the government to include these proposals in the new development control rules,” said an official.
The proposal has agitated tenants’ associations in the island city, who have called it “pro-builder”. The Federation of Tenants Associations has condemned the move. FAM, the apex body comprising 700 associations of traders in Maharashtra, and the Ahar, the association of hotel and restaurants, plan to protest against the proposal. The Shiv Sena, sensing an opportunity , may turn it into an election issue on the eve of the civic polls in February next.
Mhada, on the other hand, said it is the only way to speed up redevelopment of cessed buildings. There are 14,375 old cessed buildings in the island city as of March 2016. Of these, 12,229 were built prior to September 1, 1940.

The remaining came up between 1940 and 1969. So far, only 672 buildings have been redeveloped while work on 1,261 buildings is either in progress or waiting to commence.
“Due to the Rent Control Act passed by the government, the rents of these buildings were frozen. As a result, the landlord stopped maintenance of these buildings resulting in their structural deterioration. Only structural repairs have not yielded expected results, hence it is necessary to reconstructredevelop them on a war footing to avoid loss of lives and property,” justified Mhada.

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