Addressing Mumbai's Housing Crisis Through Self-Redevelopment

Mumbai has over 16,000 cessed and dilapidated buildings- some close to a hundred years old- that need to be redeveloped. Last year, the state government announced that it would constitute a separate authority to push for self-redevelopment of such buildings- a solution to the city's housing crisis that involves societies of residents living in these buildings undertaking the redevelopment. The government was considering constituting a self-redevelopment financial corporation, even as the Maharashtra Central Cooperative Bank and the Mumbai District Cooperative Bank have been appointed as nodal agencies to facilitate finance for such projects. Apart from this, the administration will also extend benefits and subsidies to help housing societies and their tenants get bigger houses at lower costs. These announcements would no doubt come as a relief to thousands living in buildings that are in dire need of redevelopment in the city.

A case for this model

The redevelopment of housing societies isn't a novel concept and has been promoted by successive governments over the past few decades. The traditional housing development model involved agreements between housing societies and developers to construct and hand over flats to buyers with very few added benefits. Developers utilised the balance plot potential to construct and sell additional flats and shops as per statutory body approvals. This model is lucrative for developers, but it often leads to poorly designed and constructed buildings, inordinate delays, and even abandonment of the project. These issues put housing societies and residents at risk of losing their investments with little recourse.

With the re-introduction of the self-redevelopment scheme, the aim is to empower residents to take control of the redevelopment process through its entire timeline – from commissioning a suitable architectural or contracting firm and managing construction to selling the additional real estate constructed and sharing the final profits. The autonomy of the process guarantees merit in all respects; society members would reap the benefits of good quality construction, modern amenities and infrastructure, and time-bound and cost-controlled construction.

Most importantly, however, self-redevelopment can bring down the cost of the surplus apartments built (as opposed to the price inflation that occurs when a developer who is driven by profit margins is involved), creating a ripple effect in the market and ensuring housing remains affordable to the masses.

Understanding the challenges

The first and the most challenging step in a self-redevelopment project is arranging for funds. The process of funding for self-redevelopment can be carried out through two methods: either by obtaining a loan from the Mumbai District Central Co-operative (MDCC) Bank, or by pooling contributions from members and availing personal loans to create a fund.

Several housing societies that have taken the self-redevelopment route have reaped the benefits of this democratic approach. For example, the Charkop Jin Prem Cooperative Housing Society in Kandivali was completed in two years and was self-funded by the residents. Another example is the Jayakunj CHS in Borivali, where each flat has 44 percent additional area.

By continuing to support self-redevelopment initiatives, the government can encourage a more participatory approach to housing development and help address the issues of poorly designed and constructed buildings and project delays. Such measures could lead to a more sustainable and equitable housing market, benefiting both residents and the broader community.

However, self-redevelopment also comes with its fair share of challenges. Housing societies often don't have the required documentation for redevelopment in place, which necessitates follow-ups with various authorities and the investment of funds – and becomes a time-consuming process. Additionally, non-cooperation among members or mistrust towards the managing committee or redevelopment committee members often hinders progress. In some cases, certain members have vested interests in promoting developer-driven redevelopment.

The unavailability of funds or high-interest rates for loans, particularly for initial expenses and statutory requirements before receiving the IOD (Intimation of Disapproval) from the MCGM (Municipal Corporation of Greater Mumbai) or MHADA (Maharashtra Housing and Area Development Authority), poses another challenge. Furthermore, appointing a competent team of experts to assess project feasibility realistically and oversee the entire process is crucial for ensuring success. Appointing a competent team of experts that can assess the feasibility of the project realistically and monitor the project through the entire process to ensure that feasibility is kept in check can help.

Despite these challenges, self-redevelopment projects can still thrive and deliver positive outcomes with careful management and collective efforts.