Redevelopment projects are one of the biggest victim of the lockdown. Many builders unable to pay rent, may not take new projects either.
By Varun Singh
Mumbai as a city has close to 40,000 active cooperative housing societies and almost 50 per cent of them need redevelopment.
This doesn’t include the figures of the cessed dilapidated buildings of South Mumbai which also stands at a tall figure of 14,000 and above. Most of them are 100-year-old and also need urgent redevelopment.
Most real estate projects in the city of Mumbai are redevelopment projects, very few are those which are green field.
From South Mumbai to suburbs are filled developers acquire old buildings, demolish them and carry out the work of new buildings.
However, not much is happening on the front of construction work post the lockdown that was imposed because of the pandemic.
To carry out a redevelopment project, the most important aspect is that the builder should be financially sound.
CA Ramesh Prabhu, Chairman of Maharashtra Societies Welfare Association says that it is difficult that builders will take any new project post lockdown.
Under redevelopment of old buildings the existing tenants get larger space as well as rent for the period of the time the developer takes to complete the project and handover the flats to tenants.
“New projects would be impacted for sure, but even the existing ones are facing a problem. Many builders have informed societies that they won’t be able to pay the rent to the tenants, but will try to complete the project,” said Prabhu.
According to Adv Vinod Sampat, an expert in housing matters, it is time that developers and even tenants of the old building wanting redevelopment need to get realistic.
The developer community has been trying to lobby with the central government to get packages that can help them financially.
Sampat says, “Redevelopment projects both the future one and the ongoing one are the biggest victim of the lockdown.”
He pressurizes the point that tenants of old buildings who are seeking redevelopment before going ahead with any developer should first check the financially stability of the builder. He suggests society should even take some deposits from developer as security so that, the developer doesn’t run away leaving the project midway.
“Don’t fall for promises that are unrealistic, the society should instead seek a proper clarity on the financial and should pose demands that are possible to be carried out,” said Sampat.
Builders claim that real estate industry is on ICU and needs immediate intervention from the government.
Harish Jain, Vice President, Brihanmumbai Developers Association (BDA), underlines that “Mumbai has more than 40000 Cooperative Housing Societies out of which 20000 societies need redevelopment. The city has more than 20000 dilapidated buildings, which need urgent redevelopment and 45% of Mumbai stays in slums, most of which are unhygienic with unliveable conditions. All of these need to be given priority and urgent attention by MCGM, State and Central Government.”