Mumbai: Tata Group's realty arm Tata Housing Development Company has joined hands with the Mumbai Metropolitan Region Development Authority (MMRDA) to invest Rs 2,000-crore for a rental housing project near the metropolis.

"We plan to launch a large rental housing project near Mumbai before Diwali. We have got approvals for the project from the MMRDA," Tata Housing Development Company Managing Director and Chief Executive Brotin Banerjee told a news agency.

However, Banerjee declined to reveal the time-line and exact investment in the project.

According to sources, the investment would be around Rs 2,000-crore.

The project will come up on a 25-acre land between Thane and Bhiwandi, in the neighbourhood of the city, and is expected to be ready in three to four years, sources said.

The project is expected to come up on a land parcel owned by Tata Housing and will include a rental component of over 3 million sqft, it is learnt.

According to a human development report by the Brihanmumbai Municipal Corporation and the United Nations Development Programme, published in September 2009, as many as over 50 percent people in the island city live in the slums, primarily because of the exorbitant prices of the property in the land starved city.

These people live in three distinct habitat categories -- the chawls, which are either single or multi-storeyed hutments, single-room tenements and pavement dwellers. Against the percentage of slum dwellers in the other major metros are much lower -- in Delhi it is only 18.9 percent, Kolkata 11.72 percent and Chennai 25.60 percent, according to the same report. The global average is one-third, it noted.

Maharashtra had launched the rental housing scheme three years ago to provide low cost housing in the city is starved of proper affordable housing.

The MMRDA is expected to get around 4,000 rental housing units of 160 sqft each from the Tatas, while the rest can be sold at the market price.