Rohan Sharma, Associate Director – Research & Real Estate Intelligence Service, JLL India:
The Delhi Development Authority (DDA) had approved the policy in the last week of July 2013. Realizing the issues faced by the nodal body in acquiring land in the prime city, in terms of demand or higher compensation in the wake of increased land valuations, this policy has been executed. The DDA has created two categories – one for land pooling above 20 hectares and the other for land pooling between 2 and 20 hectares. Under this policy, the ground coverage has also been increased from 33% to 40%. The idea behind the policy is to have private sector participation in land consolidation and development while DDA assumes a larger role of a facilitator.
Landowners would receive between 48-60% of the developed land back from the DDA in lieu of compensation and they can use that developed land in any way they desire. The DDA would use the remaining portion of the pooled land for creating the associated infrastructure as well as for public and semi-public areas.
This policy is likely to result in residential development projects across the prime city, which has an acute shortage of housing and where most of the housing needs are fulfilled by the DDA. This policy is likely to lead to an increase in private participation in housing development across the city.
The Urban Development Ministry approved the Land Pooling Policy of the DDA yesterday. The approval is accompanied by five amendments made to the policy. These are:
- In case DDA delays the development of the pooled land, it will pay penalty to the landowners/farmers of 2 per cent of the External Development Charges (EDC) for the first two years and 3 per cent for the period thereafter in case of delay beyond the completion of the project or five years, whichever is later.
- If farmers/landowners are unable to pay the EDC, they can give up a larger portion of the land to the DDA, and in this case they shall get 35% of the returnable residential land back for their use.
- The Development Companies shall have to compulsorily construct houses for the EWS (Economically Weaker Sections), which will amount to 15% of the FAR over and above the permissible FAR of 400.
- Transparent system for prioritizing the allocation of returnable land based on a computerized monthly-grouping system.
- Complete utilization of the FAR meant for residential purposes.
The policy is estimated to unlock around 20,000-25,000 hectares of land across Delhi, primarily in the urban villages and smaller towns at the city’s peripheries. Such development is likely to result in a healthy availability of residential dwelling units which will not only enable availability but also help in keeping a control on residential prices.