CM Prithviraj Chavan on Friday reiterated that the government would discontinue the premium system that was being followed in redevelopment schemes and replace it with a flat-sharing system.
The decision has been prompted after it came to light that the builder lobby was taking advantage of the additional FSI they were being given in the premium system, to make huge profits even as the Mhada struggled to provide affordable housing.
Justifying the decision of replacing the system, Mr Chavan in a reply to a question by Shiv Sena leader Subhash Desai said, “Mhada is running short of land, resulting in non- availability of new flats for affordable housing through the lottery system. In the new system, redevelopment of the Mhada colony would help us create fresh housing stock, which will be disseminated through the lottery system.”
Mr Chavan, who also heads the housing department, has been inundated by demands from the Sena and the builders’ lobby to retain the premium system instead of the flat-sharing system, which was launched in September 2010.
Under the premium system, developers would get additional FSI against the premium of 40 per cent, for redevelopment of colonies that are in a dilapidated condition. The builders would get to sell the additional flats at the market rate.
However, after the government realised that the builders were minting money at the cost of affordable housing for the poor, it made it compulsory to share the tenements built out of the incentive FSI.
There are 56 Mhada colonies comprising 3,701 buildings with over 1.11 lakh tenants in Mumbai. To keep the ill-practices by the builders under check, the government also announced to allot FSI based on the flat size offer to the existing tenants of the Mhada colonies.
Mr Chavan said that the builders have been offering unreasonable flat size to pocket the projects from other developers and this has resulted in halting redevelopment.