The government of Maharashtra is inviting private real estate developers to partner with its housing agency Maharashtra Housing & Area Development (MHADA) to build affordable residential projects across the state, said Jitendra Awhad, state housing minister.
This model has already been explored by the state governments of Uttar Pradesh, Haryana and West Bengal.
“We (MHADA) will be happy to tie up with private developers, we will be equity partners in the project and are willing to take risks,” the housing minister said. “The day I took charge, I announced that I am pro-builders. I will do whatever it takes to build affordable homes. So far, we have been only facilitators and now I feel we need to change our approach. I want builders to join hands with us.”
MHADA will be picking up equity in these projects and facilitate faster approvals apart from additional support to the project. The modalities for these alliances will be finalised soon, he said at the CII real estate conference.
Dubai-based listed realty developer Emaar Group has reached out to the government showing its interest in developing projects in Mumbai Metropolitan Region (MMR). A meeting between the minister and Emaar’s representative is expected to take place in two weeks’ time.
According to industry experts, the government and private developers’ joint ventures for affordable housing projects will receive a good support both from the developers as well as homebuyers.
“This will be a lethal combination as MHADA will bring credibility, assurance and faster approvals to the table, while private developers will get design, efficiency and agility making it a win-win for all. As the state government body is getting involved at the project level, financing terms can also be easier,” said Anuj Puri, Chairman, Anarock Property Consultants.
The government is planning to take away some part of land that is lying unused in Special Economic Zones (SEZs) and that will be used for building affordable housing projects. The government will pay these SEZ developers the same price that they had paid while getting the land from the government, he added.
“This provision was introduced by previous Chief Minister Devendra Fadnavis in Maharashtra State Housing Policy and action plan 2015. However, this draft policy was not tabled in the assembly, and we plan to take it forward,” Awhad said.
To assess the financing scenario for realty sector, the minister has recently met the State Bank of India’s Chairman and is planning to meet representatives of Indian Banks’ Association (IBA) soon.