FPJ Analysis: Maharashtra Housing Policy

After 18 long years during which the landscape changed dramatically across Maharashtra, the state government unveiled its housing policy that ticks off all the right boxes, such as affordability and inclusivity, and makes all the right sounds with its central slogan of “My Home, My Right”. The policy has set an ambitious target of constructing 3.5 million houses by 2030 for the low-income and middle-income groups, known in government parlance as LIG and MIG, and an additional one million in the decade after. For this, it envisages a total of Rs 70,000 crore. The policy envisions affordable rental housing, a centralised State Housing Information Portal to monitor demand, geo-tag assets, track fund disbursement, and gives a nod to the buzzwords of the day, such as data-driven decision-making, transparency, social inclusion, and so on.

On the face of it, there is little to quibble about the intentions and targets that the policy lays out. Indeed, it was more than overdue given that both the land-property market and the housing ecosystem have changed since the last policy was introduced in 2007. The points of debate are the roadmap that the policy seeks to lay out to achieve its ambitious purpose and the accrual of benefit for whom the housing policy is intended. Though state agencies have been supposedly working for decades to provide housing – the Maharashtra Housing and Area Development Authority was set up back in 1977, the City and Industrial Development Corporation in 1970, and the Slum Rehabilitation Authority for Mumbai in 1995—the policy is a tacit acknowledgement that these agencies have been unsuccessful in their purpose.

Nowhere is the housing crisis as acute as it is in Mumbai, a city with nearly 45 per cent of its population living in abject conditions of slums and informal settlements, while a whopping 291,266 units, mostly in the luxury to super-luxury categories, lay unsold in 2022. In the housing context, affordable has several meanings depending on the context, but a house is affordable when the monthly rent or mortgage payments account for about 30-35 per cent of a household’s income; in Mumbai, this would be around Rs 45 lakh, an amount so laughably small that even slum dwellers are coughing up as much in certain areas while a decent one-bedroom apartment costs not less than Rs 1.5 to 2 crores in far suburbs. If the policy makes homes truly affordable, Maharashtra would sparkle as a case study, but several aspects of the policy put land dealers and real estate developers in the driver’s seat. They are hardly motivated to build houses for all or affordable to many.