Mumbai: After receiving the planning authority status in May 2018, the Maharashtra Housing and Area Development Authority (MHADA) had set up a dedicated cell for the self-redevelopment proposals.
Since then, it has sanctioned no objection certificates (NOCs) to 14 housing societies located on MHADA layout. It had received total 16 proposals, said Bhushan Desai, MHADA’s resident executive engineer in charge of the self-redevelopment.
Besides, other 18 private co-operative housing societies are opting for self-redevelopment, according to the data accessed by this newspaper.
The Mumbai District Central Co-operative (MDCC) Limited Bank, which is providing loans to undertake self-redevelopment projects has already allocated a fund of Rs62.87crore to nearly five co-operative housing societies.
While other 26 self-redevelopment proposals have been given in-principle approval wherein a total Rs1,349.13 crore will be disbursed as loan if approved, said the bank officials.
Speaking to the ‘Free Press Journal’, MDCC chairman and BJP legislator Pravin Darekar said, “The response from societies opting for self-redevelopment is good now as compared to earlier.
Former chief minister Devendra Fadnavis introduced various incentives to boost self-redevelopment. As a result, tenants of dilapidated buildings are now more keen on self-redevelopment instead of handing over the project to the developer.”
Asked why there are fewer MHADA layout buildings self-redevelopment proposals, Darekar replied, “Any bank requires a letter of intent (LOI) to approve the loan. Since MHADA issues an LOI only after receiving the premium money, those proposals are taking time.”
Another MDCC bank official explained, “The premium money is usually in crores for tenants to afford, though there is a provision to pay the amount in installment.
Private building tenants somehow manage the initial payments to get the LOI, but for MHADA building tenants, the payment seems to be a task. Therefore, in such cases, we have suggested the MHADA to give a conditional LOI so the loan process can be expedited.”
So far, the MDCC Bank is claimed to be the only financial institution which is in the forefront providing loan facility to cooperative housing societies to undertake self-redevelopment.
The bank bears 95 per cent project cost with 12.50 per cent rate of interest, and the society seeking loan is expected to afford the remaining 5 per cent cost.
Housing expert Chandrashekhar Prabhu said: “More than 790 housing societies have decided that they will go for self-redevelopment. They passed such resolution in the general body meeting. In fact, banks won’t have money to give loan if all come together.
For instance, if one project costs Rs100 crore and if 790 projects together go for self-redevplopment, then about Rs70,000 crore would be required, and the bank may not have that much money.
Besides, ‘society members’ take their own time, and they won’t do it in hurry just because we want them to do it. Also, the market is down, so they have to worry about the salable portion. They have to think on aspects like when the saleable portion will be sold.”