Mumbai: Are BMC’s ‘Affordable’ Homes Really Affordable for EWS, LIG Buyers?

The Brihanmumbai Municipal Corporation’s (BMC) latest batch of 426 inclusive homes has turned out to be unaffordable for the very groups they were supposed to serve, which is Economically Weaker Section (EWS) and Low Income Group (LIG).

The most expensive EWS units, located in Majas, are priced close to INR 6 crore. To buy one, applicants would need to have at least INR 5.5 crore in savings. Even the cheapest EWS flats in Bhandup, costing INR 62 lakh, are beyond reach for most eligible buyers.

According to official definitions, the EWS category includes families with an annual income of up to INR 6 lakh, while the LIG category covers those earning up to INR 9 lakh. Of the 426 inclusive homes, 358 are meant for EWS buyers and 68 for LIG buyers. The carpet area for EWS units is up to 323 square feet, while LIG flats go up to 646 square feet.

Under current home loan eligibility rules, a person earning INR 50,000 a month can get a maximum loan of around INR 31 lakh. This assumes a good CIBIL score, a 7.9% interest rate, and a 30-year repayment period. The monthly instalment for such a loan would be about INR 22,500, which is nearly half of the borrower’s monthly income.

Even with this loan, EWS buyers would need to arrange the remaining INR 31 lakh to purchase the cheapest flat in Bhandup. Additional costs such as stamp duty, registration, and maintenance charges would add several more lakhs.

As per sources, the civic body had not set the prices. The prices were fixed at 10% above the ready reckoner rate for each location. As per a report by HT, the civic body may consider reducing prices if there are no buyers but would first review the available housing stock in the market.

The civic body opened online applications for these inclusive homes on October 16. The last date to apply is November 14, and buyers will be selected through a lottery on November 20.

Earlier this month, the BMC also announced an auction of four properties in Chunabhatti, Chembur, Kalbadevi, and Kandivali to raise at least INR 120 crore. The final date for registration for the online auction has been extended from October 29 to November 6.