Last Updated:
The excess supply of housing in Mumbai contrasts sharply with the acute shortage of affordable options.
While affordable housing is a vital part of addressing Mumbai’s growing population, it cannot be viewed as a standalone solution. (Representative image)
Mumbai, the financial capital of India, ranks among the world’s most densely populated cities. The city’s rapid urbanisation and economic opportunities have drawn millions, resulting in a significant surge in housing demand. With a population surpassing 12.44 million, approximately 30-32% of its residents live in slums, accounting for nearly half of Maharashtra’s total slum population, which is about 11.8 million—the highest in India. This housing crisis has exacerbated socio-economic disparities and the lack of affordable housing. This situation prompts an important question: can affordable housing effectively address Mumbai’s growing population challenges, or is a more comprehensive approach necessary?
Understanding Affordable Housing and Mumbai’s Housing Market Landscape
The term “affordable” in the housing context diverges significantly from other commodities. A housing unit is considered affordable when monthly rent or mortgage payments account for 30% to 40% of a household’s income. In Mumbai, where the median household income is around INR 36,000 per month, this definition suggests a home priced up to INR 4.5 million. However, given the city’s housing market realities, achieving such affordability is increasingly elusive.
Over the years, Mumbai’s housing market has transformed from its colonial roots, which featured chawls—multi-story tenements initially designed for workers—into a landscape characterised by overcrowded living conditions. As of 2022, the city had an unsold housing stock of 291,266 units in the Mumbai Metropolitan Region (MMR) and Greater Mumbai. Ironically, much of this stock consists of larger, more expensive apartments that remain inaccessible to the lower and middle-income groups.
Government Initiatives and Their Efficacy
To combat the housing crisis, the government has launched various schemes like the Pradhan Mantri Awas Yojana (PMAY), aiming to provide housing for the urban poor by 2022. The PMAY offers financial assistance of up to INR 2.67 lakh for home construction. Similarly, the Maharashtra Housing and Area Development Authority (MHADA) conducts lotteries to allocate subsidised housing. Despite these efforts, the affordable housing available often does not meet the needs of those most in need, as it caters more to middle-income families than the impoverished.
For instance, MHADA’s 2018 offering of a 363 sq ft tenement in Lower Parel was priced at INR 14.2 million—far beyond the reach of the average family. The affordability gap is stark; only households with an income of at least INR 2.36 million would qualify for such units, leaving many still trapped in informal housing.
The Need for a New Approach
The excess supply of housing in Mumbai contrasts sharply with the acute shortage of affordable options. Slums account for 48% of the city’s housing stock, with another 17% comprising slum-like accommodations. Current initiatives fail to effectively target the lowest income brackets, leading to a continued cycle of poverty and inadequate living conditions.
A redefined approach to affordable housing must consider the realities of the local market. Suggestions include reducing the affordability threshold of monthly income and adapting to the unique economic context of Mumbai. Moreover, public land in prime areas must be utilised for affordable housing instead of commercial developments, albeit with careful consideration of the long-term implications for city revenue.
Conclusion
While affordable housing is a vital part of addressing Mumbai’s growing population, it cannot be viewed as a standalone solution. The city requires an integrated approach that considers the socio-economic context, infrastructure capabilities, and community needs. By redefining affordability and implementing inclusive policies, Mumbai can pave the way towards a more sustainable and equitable housing landscape for all its residents.
-The author is chairman and MD of Arihant Superstructures. Views expressed are personal.
Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Readers are advised to check with certified experts before making any investment decisions.
