Rethink on rents

A concerted effort by thousands of tenants’ meetings across Bombay and the threat of a morcha to the chief minister’s residence stymied the Bharatiya Janata Party (BJP) government in Maharashtra from amending the Maharashtra Rent Control Act (MRCA) to exclude residential premises larger than 862 square feet and commercial residences of more than 500 square feet. No doubt they were fearful of offending city residents in light of the impending municipal elections in the state in 2017. Citizens’ groups and politicians welcomed the withdrawal.
The chief minister Devendra Fadnavis and housing minister Prakash Mehta stated they were not going ahead alleging there was no such proposal!
The amendment would have affected hundreds of thousands of tenants in South Bombay and elsewhere, including Parsis who reside in the colonies and places such as Churchgate, Colaba, Malabar Hill and all the areas around.
While the government alleged that people who were living in large flats pay a pittance of the market rate for rents, they conveniently overlooked the fact that many tenancies legally change hands at the market rate and of which the landlord takes anywhere from 33% to 60% of the purchase price. The Bombay Parsi Punchayet while transferring tenancies takes 50 to 60% of the sale price. Ironically an earlier BJP government had legalized the system of pugree (payment for transferring tenancies) in 1999. On each tenancy transfer the government earns revenue through stamp duty and registration fees.
The government had justified the escalation noting that the guidelines specified by the central BJP government required changes in the Rent Act for states to avail of central urban development funding. They also assumed that as the number of residents affected was small in number, they could push the amendments through without suffering an electoral backlash. The opposition raised by the occupants of the Campa Cola Housing Society in Worli which despite Supreme Court orders managed to salvage their flats, however, may have forced a rethink.
Much of the opposition was fueled by What’s App groups, some of them termed SOBO Pugree Tenants with SOBO standing for south Bombay. The What’s App groups are abuzz with rumors of an impending hike of the parking charges to as much Rs 1,800 a month, without any guaranteed parking space. The plan is reportedly to be considered for the ‘A’ ward area in Bombay (which includes the Fort and Colaba areas). Expect further opposition.