October 07, 2025: In a move aimed at making redevelopment projects across Mumbai more viable, the Maharashtra Housing and Area Development Authority (MHADA) has revised its 2007 redevelopment policy, easing both premium charges and payment terms for developers and housing societies.
Under the updated policy, MHADA has modified the calculation of premiums for commercial floor space in projects under Regulation 33(5) of the Development Control and Promotion Regulations (DCPR) 2034. Earlier, developers had to pay 1.5 times the residential rate for commercial space — a formula that many said rendered redevelopment financially unfeasible. The premium will now be determined using a formula that factors in land rates, market values, and intended usage, ensuring parity between residential and commercial components.
Officials said this revision follows representations from CREDAI–MCHI, which sought a fairer structure to promote balanced growth in redevelopment projects. MHADA stated that the revised policy “balances residential and commercial market rates to arrive at a more equitable premium structure.”
The second key change allows phased premium payments for the additional built-up area, aligning MHADA’s norms with those of the Municipal Corporation of Greater Mumbai (MCGM). Developers can now pay premiums in installments, easing liquidity pressure. For plots below 4,000 sq. m, payments can be made in five installments, and for larger plots, in six installments, all with applicable interest.
MHADA stated that this staggered payment structure will reduce financial strain and enable smoother project execution, thereby accelerating redevelopment across the city’s aging housing stock.
These policy changes are expected to encourage more societies to opt for redevelopment, helping modernize Mumbai’s older neighborhoods while supporting the city’s broader urban renewal goals.
Source: Hindustan Times
