“In many cases, rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”
Assar Lindbeck, Swedish economist (1972)
Well written Parag. Cant see any see any logic for rent control especially when everyone insisits on leave and license arrangements just to get out of the purview of the act anyway, and only those who have leases enjoy the benefit of the act. Perhaps, fixing an income limit cut-off for tenants should be thought of. There are many other things that come to mind. But the enduring question being- why doesnt anyone make a political issue out of this. I mean, here is an actual issue that hits pretty much everyone from the CEO to his peon, and yet I dont see any party go on hartal mode for it.
Hoshi, if, along with increasing FSI levels, stipulations are put regarding adequate space for parking, either basement or elevated, wont it work? Say, for every building, like they have refuge areas, there must be minimum of 2 cars paring space per apartment or something? I mean isnt increasing the FSI really the best way to deal with the parking woes in the city?
This is one of the best articles I read recently. V good.
Parag, while I agree with most of the arguments you've made, I'd question some of the figures you've mentioned. Numbers such as 8,200 per cent inflation between 1940 and 2000, and inflation adjusted market rates of those flats being only Rs. 5,000/- to Rs. 6,000/- per month (even in 2000), are much lower than the real numbers.
Also, I strongly disagree with relaxing the FSI norms as a one of the solutions to Bombay's property woes. Bombay doesn't have the infrastructure (parking, open spaces, water supply, sewerage, etc.) to support clusters of very tall buildings in close proximity, as evidenced by the problems faced by the swanky high-rises in the Tardeo-Nana Chowk belt. Further, the existing FSI norms are more than enough to redevelop existing rent controlled buildings into at least twice their current number of floors. Relaxing the extant FSI norms any further would render an unsustainable burden upon the city.
Great Article.Well said.Most of us know that for lack of tenants, housing was given on meagre rents and no pugree was taken as alleged by tenants.Landlords bent over backwards and gave in to many of tenants demands like free water connection,free maintenance etc.Thee is no way that a landlord can maintain a 1800 sq ft apartment with a monthly rent of rs.300 inclusive of taxes.The price of one cement bag is Rs.350.Abolishing the Maharashtra rent act will change Mumbai tremendously.But it will not happen as the politicians control the slums where a 60 sq ft room is given for Rs.3000 a month.
Mr .Parag,You have forgotten to mention that several Mumbai tenants had paid huge sum of money as deposit to Landlords (known as "Pagri") and that there was trust between the landlord and the tenant regarding that the tenant had paid the huge deposit money almost equivalent to those times market value of the property and on top of that the landlord used to charge a nominal rent as well,and the landlord assured the tenant as long as they continue to pay the rent there will be no eviction.So the poor tenant on the basis of trust paid the huge deposit and still had to continue to pay rent as well and still wasn`t given an owner`s status in spite of paying the market value of the property.landlord in these cases got the market value of their properties in the form of pagri which was non refundable and plus they enjoyed the extra rent as well and plus they didn`t lose their right over the property.All this hue and cry over property disputes are because Rs 100 has no value in todays time,If 100Rs had value equivalent to Rs 1crore in todays world,No landlord would have evicted his tenant and would have continued the luxury of keeping his property even though he has taken the market value of the same property.I am not saying the tenants are right.The new rent control act should be a must win win situation for both the landlords and the tenants.In several cases the tenants are willing to maintain the property and go in for re development but are objected by the landlords.There should be a provision in the new law that the tenant can transfer the tenancy to a new party and the new party has to give a certain percentage to the landlord and the new tenants has to start paying the rent at the current market rates.Else if the tenants don`t want to sell/transfer they should be allowed for sub-letting but a certain amount of rent must be given to the landlord as well.
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