The 2025 Housing Policy expands the vision of affordable housing, but echoes of the past inaction raise questions about its transformative potential.
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Nearly two decades after its 2007 policy, the Government of Maharashtra’s Housing Department released its new State Housing Policy 2025 (SHP) in May 2025. The SHP covers the entire state, addressing both urban and rural housing needs. This article, however, limits its critical observations and analysis to the urban segment of the policy.
Maharashtra has one of the country’s most extensive urban profiles. Recent projections estimate its urban population at 63 million—approximately 50 percent of the total projected population of 128 million in 2025. The state has 29 municipal corporations and numerous Class I and Class II cities, with populations ranging from 100,000 to 1 million, and from 50,000 to 100,000, respectively. Maharashtra’s urban geography accounts for 6 percent of its total land area. Its elderly population is projected to rise to 13.1 percent by 2026.
The SHP presents itself as a comprehensive framework aimed at fostering affordable, inclusive, and sustainable growth in the housing sector. Its central objectives are ‘Housing for All’ and a ‘Slum-Free Maharashtra’. With an emphasis on social inclusion, the policy includes dedicated provisions for working women, students, senior citizens, and gig and industrial workers. It reiterates its commitment to a slum-free Mumbai and sets an ambitious target of constructing 3.5 million affordable homes over five years. Aligned with the ‘walk to work’ concept, the SHP also emphasises the development of housing near employment hubs. In light of climate change imperatives, the policy promotes green housing, state-of-the-art construction technology, and the use of sustainable building materials.
With an emphasis on social inclusion, the policy includes dedicated provisions for working women, students, senior citizens, and gig and industrial workers.
The SHP acknowledges a massive deficit in affordable urban housing, estimated at 1.94 million units between 2012–2017. This shortfall has contributed to the proliferation of slums, which currently house approximately 5.2 million people—18.1 percent of India’s total slum population. Maharashtra’s cost of living, which is 1.37 times higher than the national average, has aggravated the situation. Other persistent challenges include rapid urbanisation and population growth, slum proliferation, land acquisition bottlenecks, high construction costs, infrastructure inadequacies, financial constraints, and environmental pressures.
In pursuance of the 3.5 million affordable housing target, the SHP leverages the Unified Development Control and Promotion Regulations (UDCPR), which mandate the allocation of at least 20 percent of net plot area (or equivalent land) to the Maharashtra Housing and Development Agency (MHADA) for constructing 30 to 50 m2 housing units for ‘economically weaker sections’ (EWS). The policy also encourages private developers to build housing for senior citizens in proximity to public transport and civic amenities. The SHP mandates the provision of geriatric services for all such projects and offers developers discounts on property tax and stamp duty.
The policy proposes housing solutions for the 775,000 students who arrive in Maharashtra each year for higher education. These accommodations, available solely on a rental basis, offer services such as a study room, kitchen, dining facilities, and recreational areas. These would be located close to educational institutions. Private developers will build them and will be allowed in mixed-use zones. It offers several concessions in Goods and Services Tax (GST), registration, and stamp duty, as well as solar subsidies and technology grants for such projects. A similar incentive structure is proposed for housing for working women. The SHP offers MHADA and urban local body (ULB) lands for this purpose on a rental basis, equipped with the necessary conveniences.
Slum rehabilitation and redevelopment are primarily framed in the context of Mumbai and other large cities, where land is scarce.
The SHP also addresses the housing needs of industrial workers, providing affordable housing in integrated townships for the middle-income group (MIG), as well as government personnel and special categories such as patient attendants near major hospitals and housing near the newly proposed airports. It includes proposals for brownfield development in various forms—including self-redevelopment by housing societies, cluster redevelopment, redevelopment of old and dilapidated buildings, cessed buildings, and old tenanted buildings. Slum rehabilitation and redevelopment are primarily framed in the context of Mumbai and other large cities, where land is scarce. To overcome slum proliferation through slum redevelopment, the SHP enables private developers to house slum dwellers in multi-storeyed units, with cross-subsidy available through the sale component.
Finally, the SHP promotes green buildings and innovative technologies. Projects incorporating such practices are eligible for technology innovation grants. The policy also mandates the adoption of the Bureau of Energy Efficiency’s energy conservation building code, installation of photovoltaic solar panels, use of sustainable materials, energy-efficient appliances, and afforestation measures. It outlines necessary urban planning reforms, amendments to the UDCPR, and a roadmap for funding mechanisms.
The stated objectives of the SHP 2025 do not significantly diverge from those of the state’s 2007 housing policy, which asserted that affordable housing and slum eradication were its primary objectives. However, the renewed policy’s attempt to expand the broad rubric of “housing for all” into customised provisions for working women, students, senior citizens, and gig and industrial workers is a welcome move forward. It reflects the state’s understanding that urban housing demands differentiated approaches tailored to the specific needs of vulnerable groups. The further realisation that housing should be provided as close to the workplace as possible (walk-to-work culture) aligns with contemporary urban thinking. This supports the idea that cities should offer decentralised services, leading to greater convenience, better use of individual time, and lower mobility demands. This awareness is driven by the need for green buildings and technology that reduce overall energy consumption to counter the growing climate challenges.
The renewed policy’s attempt to expand the broad rubric of “housing for all” into customised provisions for working women, students, senior citizens, and gig and industrial workers is a welcome move forward.
However, despite the lofty objectives stated in the 2007 policy, the SHP admits that the state has fallen short in achieving its primary goals over the last two decades. This is particularly disconcerting given the long-standing presence of MHADA—established in 1977—with the avowed objective of creating affordable housing. Similarly, while the state established the Slum Rehabilitation Authority (SRA) in 1995, it continues to grapple with a large and persistent slum population.
A more critical and transparent evaluation of why past initiatives failed would have strengthened SHP 2025. It should have been especially alarming that a large inventory of 136,500 housing units remains unsold in the Mumbai metropolitan region alone. In the absence of such introspection, the policies adopted in SHP 2025 do not make any substantive departure from the earlier prescriptions that created the intractable housing situation.
The affordable housing deficit and the prevalence of extensive slums in the state demand radical policy shifts, including the redefinition of land use in the state’s cities. This will require the reengineering of the UDCPR and the two state agencies, MHADA and SRA. Since the SHP heavily relies on rental housing and the private sector to deliver such housing, Maharashtra must first implement the rental reforms recommended by the Government of India. Furthermore, a combination of punitive and restrictive policies to prevent speculative housing on the one hand and incentives beyond the floor space index (FSI) on the other would have to be implemented to encourage the private sector to deliver housing in the affordable and rental sectors. Anything short of such fundamental and sweeping changes would not yield any meaningful result.
Ramanath Jha is a Distinguished Fellow at the Observer Research Foundation
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Dr. Ramanath Jha is Distinguished Fellow at Observer Research Foundation, Mumbai. He works on urbanisation — urban sustainability, urban governance and urban planning. Dr. Jha belongs ...
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