In the biggest public rental housing scheme in the Mumbai metropolitan area since 1947, real estate developer Housing Development & Infrastructure Limited (HDIL) and Mumbai Metropolitan Region Development Authority (MMRDA) have signed a joint venture deal for developing 525 acres of land in Virar, the northern suburb of Mumbai, to build rental houses for about 43,000 low-income families.

With the total cost based on current prices and calculations, HDIL will be spending between Rs6,500 crore to Rs7,000 crore on this project, under which it will build 43,000 houses under the rental housing scheme and hand it over to MMRD free of cost, which in turn will rent it out to the needy at its terms and conditions.

HDIL will be free to build another 90,000 houses, which it can sell at market prices to recover costs. It expects to make margins in the range of 30-35 per cent from this project.

Speaking to reporters at a joint conference today, Ratnakar Gaikwad, metropolitan commissioner, MMRDA said, ''The rental housing project is in line with the state government's housing policy of facilitating affordable housing in urban areas for the low-income and economically weaker sections, and shelter for the poorest of the poor.''

''Through such schemes with leading developers like HDIL, we seek to ease the housing shortage in Mumbai significantly, by enhancing the standard of living for the less privileged sections,'' he added.

The site, which is located just two kilometers from Virar station, will be built in four phases and is expected to be completed by 2015. The first 10,000 units will be ready by March 2011.

Each house will be of 160 sq.ft. carpet area and be built in self-contained units in 14-storeyed quake-resistant buildings in CIDCO-approved layouts that meet all standard norms for high-rise structures.

 Sarang Wadhawan, managing director of HDIL said, ''The benefit of such schemes is not just affordable housing, but a transformation in the minds of people and the communities, through enhanced possibilities for education, income-generation and better health for residents.''

MMRDA says it will construct 4-lane roads from the highway to the site, skywalk from the station to the site, ensure regular water supply and electricity and all other off-site infrastructural requirements.

The project will also have all other facilities like school, banks, shops, hospital, police stations among others.

In 2007, HDIL had won the bid to develop 276 acres of slum land belonging to Mumbai's Chhatrapati Shivaji International Airport (CSIA) for executing the largest slum rehabilitation project for about 85,000 slum dwellers for the expansion and renovation of Chhatrapati Shivaji International Airport. (See: Housing Development & Infrastructure to rehabilitate slums around Mumbai airport, to develop airport land)

Last month, Tata Housing Development Co, a Tata Group company, had joined the low-cost housing bandwagon with a project 'Shubh Griha' in the developing suburb of Boisar, near Mumbai. (See: Tata Group launches low-cost housing project near Mumbai)

Tata Housing said it will invest up to Rs100 crore in the 1,200-apartment township. The apartment size will range between 283 sq ft to 465 sq ft each and prices will range between Rs390,000 and Rs670,000.

Last month, HDIL said that it intends to sell shares to raise up to $600 million through a qualified institutional placement.

The second largest private sector home financier Dewan Housing Finance Corp Ltd also plans to raise Rs3,500 crore through debt in the current financial year to meet growth in lending.