Route to Shanghai starts from slums

State’s housing policy will focus on making things better for slum-dwellers

The 72 lakh strong living in the slums - 60 per cent of the city’s population - holds the key to Mumbai’s transformation into Shanghai. So thinks the state government, and consequently, the comprehensive housing policy to be announced by Chief Minister Vilasrao Deshmukh on Wednesday will focus largely on steps to offer slum-dwellers an array of housing options. 

The city development plan (2005-2025), referred to by the task force set up in October 2003 to formulate the policy, has recommended a provision of 11 lakh low-income houses (LIH) aimed at bringing the existing percentage of people residing in slums to 10 per cent.

To achieve this macro task, the government will look to increase the current land availability by 70 per cent. An increase in accorded FSI to an average of 3-4 in maximum possible zones, building the trans-harbour Nhava-Sheva link, relaxing the CRZ II and III norms and unlocking some portions of no-development zone for LIH, a repeal of Urban Land Ceiling Act (ULCA) and reduction of the transaction cost (stamp duty) are the reforms the government is deliberating to achieve the target. The investment needed for the phased development will be a $40 billion. 

The development plan has recommended a redesign of the existing slum rehabilitation policy (SRA). Plans are on the anvil to move over to market-based auctions for choosing the slum developers. Until now, the slum dwellers had approached the SRA officials for consent after selecting a developer.

But the task force members are of opinion that the current SRA initiatives, marred by lack of transparency and low incentives for developers, has failed to utilise 60 per cent of the existing slum land. Going by the current rate, they SRA can only create a supply of 1.5 lakh units - a shortfall of 9.5 lakh low income houses.

The slum dwellers, however, will not get this bonanza offer for free. The policy further recommends the disbanding of economically non-viable free housing. The new guidelines demand a slum dweller to pay a fraction of the construction cost (Rs 100 per sq.ft).

Special housing zones for low income groups will be created by auctioning public land to developers with a pre-condition that a part of it will be developed for LIH. The government plans to make 3 lakh LIHs available this way. The developers, interestingly, get tax breaks and income-tax exemptions building LIHs under the scheme.

The average monthly income of the bottom 30 per cent of the population, suggests the document, is below Rs 6000. The policy will therefore lay stress on ensuring affordable housing for this group. The government will aim at bringing the existing housing rates to 3-4 times the annual household income of this group. The thrust will also be on promoting rental housing.

The government will make housing purchase cheaper (Rs 1.5 lakh at current prices) for the lower income group.