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    Decoding the impact of the land pooling policy in Delhi

    Category : MPD-2021 News

    REALITY BITES Experts look at the impact of the policy on property prices, and also its impact on the urban landscape

    NEW DELHI: An update in the Land Pooling Policy (LPP) and the notification allows 89 villages in Delhi to become urban areas. This is expected to increase the supply of residential space. We ask experts about the impact this may have on property prices.

    “Land pooling is the need of the hour for Delhi. The city’s urban landscape was not increasing proportionately to accommodate its ever-increasing population. To address the woes of urban housing, more area is required for urban planning and usage. Delhi government’s recent declaration will help in taking the Delhi Development Authority’s (DDA) urban LPP forward. While acquiring land for urban development has become a contentious issue with the implementation of the Land Acquisition, Rehabilitation and Resettlement Act, the state government’s nod is a winwin situation for landowners and the authority. Experts believe that about 40,000 acres will be opened up for planned development, making way for construction of nearly 2.5 million housing units in Delhi,” said Sudhir Pai, chief executive officer, Magicbricks.

    “About 40,000 acres is the total size of Noida; so one can imagine the number of residential units this much area would accommodate. This would also lead to correction in realty prices in the NCR. The implementation of the policy is significant as DDA’s Master Plan Delhi 2021 proposes the construction of 2.5 million housing units by 2021, for which 10,000 hectares of land is required. However, converting village areas into planned urban spaces is a huge task for the authorities. The key to success will be good coordination between DDA, land owners and private developers.”

    “The rebooted LPP can potentially provide a solution to the problems the nodal body faces with regards to acquiring prime land in the city. The biggest issues have been fragmented land holdings and the steep compensation to original landowners as a result of increased land valuations. It can boost the availability of residential projects in the city, where a severe housing shortage exists. The policy can result in greater private participation in the creation of housing in the city,” added Ramesh Nair, chief executive officer & country head, JLL India. “It can potentially unlock land across Delhi to the tune of about 20,000-25,000 hectares. The deployment can also help in keeping residential prices under control. We are looking at a possible revamp of the dynamics governing NCR’s residential market, with an amplification of affordable housing supply. Pertinently, it should be kept in mind that while RERA (Real Estate (Regulation and Development) Act, 2016) has been notified for NCT of Delhi, homebuyers need to be aware that residential projects are not cleared for launch unless the developer has obtained all approvals and registered the project under RERA. LPP involves land being surrendered and new land allotments being made, and developers can only apply for project approvals after this. Therefore, the city’s homebuyers should be circumspect about signing up for a project by the private developers.”

    According to K. Ravichandran, senior vice-president and group head, corporate ratings, ICRA: “The operationalisation of Delhi’s LPP will result in unlocking of around 55,000 hectares of land. The decision augurs well for people looking for housing. Land pooling offers an opportunity to the landowners to deposit their smaller chunks of land in a central pool to make a bigger and more integrated land parcel. With this, affordable housing will get a fillip in the coming decade and will rationalize prices of real estate as well as rentals. With an estimated 59,835-73,750 hectares in built-up area to be developed, the land pooling will result in increased housing stock. The policy should result in supply of around 9 million dwellings, including for economically weaker sections. NCR’s real estate market is replete with dissatisfied landowners. Through this policy, the approach being adopted is of participative development. A share of the pooled land would be given back to the original landowners, who will develop it for various designated urban uses. Thus the major roadblock in development of land via land acquisition—fair compensation—is likely to be equitably addressed as people partake in the development process. The policy is likely to have a positive impact in the form of increase in housing stock, participative development of landowners, rationalization in prices and rentals and overall pickup in investment and economic activity in the sector.”

    “Delhi NCR is today a sprawling city with vast swathes of land not urbanised. Land pooling is therefore sound urban planning that should lead to a dense core and a more compact region. It will eventually lead to creation of housing stock (including affordable housing) to accommodate city’s increasing population. It will also create supply of millions of square feet of commercial space. However it is too early to analyse its impact on other parts of the NCR. Also, being dispersed across the city, each zone will have its own dynamics,” said Amit Oberoi, national director, knowledge systems, Colliers International India.

    “The magnitude of this proposed development is mostly not appreciated. The area under this development will be larger than the three new cities developed post-independence, i.e. Gandhinagar,ChandigarhandBhubaneswar.”

    It is therefore critical to have a robust plan for creating a holistic master plan for a modern megacity. Many of the tasks that DDA needs to undertake are sequential in nature, from collection of land from promoters, to undertaking the legal due diligence, survey of the land, identifying pockets not aggregated, master planning the area, seeking opinion from all stakeholders on the plan, redistributing the development to the promoters and laying out the infrastructure. DDA will need to adequately staff itself and we recommend, it act as a planning and oversight agency for smooth implementation.

    Source: HT Estates
    Dated: 17th June 2017

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    LG Anil Baijal approves infra boost in 95 villages

    Category : MPD-2021 News

    NEW DELHI: Lieutenant governor Anil Baijal on Friday approved 95 villages to be declared as developed areas. Delhi Development Authority (DDA) can now start implementing the land pooling policy and it will be responsible for development of civic amenities in these villages.

    “This is a major step in the implementation of the land pooling policy for creation of affordable housing units in the capital by harnessing private potential in land assembly and physical and social infrastructure development,” a statement issued by the LG office said.

    According to sources, once the notification is issued, DDA can start the work on land pooling. DDA officials said it would take some time, close to 6-8 months, to to operationalise the policy.
    “We will have to first prepare the standard operating procedure for the implementation of the policy. The land records have to be put in place,” said an official.

    Source: Times Of India
    Dated: 17th June 2017


    Metro Matters: Delhi must look beyond DDA for housing redevelopment

    Category : MPD-2021 News

    Delhi Development Authority, the primary landowner and developer of the city, has failed in its basic duty of providing affordable housing. Land pooling policy will enable residents to partner with private developers to build and sell homes.

    Last week, Delhi moved a step ahead in enforcing the land pooling policy by notifying 89 rural villages as urban. The residents here will now be able to pool their farmlands and partner with private developers to build and sell homes.

    This could be good news for those looking for a legitimate residential address in Delhi. Despite rising incomes, many city dwellers have already been priced out of Delhi into the National Capital Region. Many others have settled for “cheaper” illegal homes in the city’s unauthorised colonies. Clearly, Delhi Development Authority, the primary landowner and developer of the city, failed in its basic duty of providing affordable housing.

    The agency’s policy of locking up huge tracts of land and not developing them held up the housing supply. A study by K Srirangan in 1997 found that this forced buyers to shift to the illegal market where they could pick plots in different sizes, at cheaper rates, in desired time and on flexible payment and construction terms.

    To make matters worse, from 2001 onwards, the DDA stopped building big projects despite a boom in the property market. According to a 2014 working paper by Jatinder S. Bedi for the National Council of Applied Economic Research (NCAER), local builders, who didn’t have the sanction to acquire and develop large plots like their counterparts in the NCR, converted single or double storey houses into multi-storey buildings.

    This again helped property dealers more than the final users. While the share of self-owned households increased from 67.4% in 2001 to 69.2% in 2011, property prices increased more than 10 times in a span of fewer than 10 years, the study found.

    The houses under the land pooling policy may not be “affordable” either. “It would have been better for the government to have kept the main supply in its hands and allowed private sector participation to accelerate the development process,” the NCAER paper stated, adding that “the land in these zones had already changed hands before the land pooling policy was made public. The real advantage will not be given to farmers or final users, but will go to large operators.”

    For many years, the DDA was criticised for being too controlling. It now draws flak for becoming too market-oriented. A panel constituted by the NDA government for restructuring the DDA (its report is yet to be made public) recommended that its key functions be handed over to other agencies. This would not only bring back focus but also open up areas for redevelopment.

    Unlike common perception, Delhi doesn’t have too much vacant land to develop new housing units. At least 60% of the city’s area is already built-up. Of the rest, sizeable portions are natural conservation zones and not available for urbanisation.

    Much of Delhi has, anyway, spilled over to the NCR towns. But suburbanisation is problematic if most residents are commuting long distances for work and education. It demands heavy investments in flyovers, expressways and mass-transit, and also leads to increased dependence on private cars.

    The zones identified for land pooling are also on Delhi’s periphery. Some of these areas are not connected to the mass-transit yet. Many others are already water stressed. Not so long ago, the DDA built Vasant Kunj and Dwarka, which got their piped water supply much after they got inhabited. Narela remained a ghost town in the absence of connectivity and other civic facilities.

    To counter suburbanisation, many cities are opting for redevelopment and densification. The current Master Plan also calls for transit-oriented development, dense commercial and residential growth along the new metro corridors, so that people work, live and shop in the same neighbourhoods. This could cover 40% of Delhi’s housing and commercial needs.

    Similarly, illegal colonies and urbanised villages could create 15% additional housing if made liveable. At least 40% of Delhi’s housing needs could be met through the renewal of old areas that are long past their expiry.

    Reviving Delhi is a professional’s job. Instead of leaving it to DDA, the restructuring panel suggests hiring experts and appointing a special purpose vehicle. Now that the land agency is itself in withdrawal mode, it’s time the government made some bold administrative overhaul. Unless it believes that the good, old promise of Roti, Kapda aur Makaan has lost political currency.

    Source: Hindustan Times
    Dated: 22nd May 2017


    Invested in a flat in Delhi’s new zones? Check if your society is legal under RERA

    Category : MPD-2021 News

    Many housing societies may not own land in Master Plan of Delhi’s new zones and may have sold apartments in the garb of society membership and collected over Rs 1000 crore.

    Can housing societies ‘registered’ under land pooling policy qualify as a ‘developer’ under the Real Estate (Regulation and Development) Act? Real estate experts say that many of them may not own land in Master Plan of Delhi’s new zones and may have sold apartments in the garb of society membership and collected over Rs 1,000 crore.

    With RERA notified for NCT of Delhi, projects cannot be launched without complete approvals and sanctioned plans and project registration with the regulatory authority. “Since the policy involves surrendering of land and fresh allotment of land, buyers should be careful in committing any money to project announcements under this scheme by private development companies,” warns Rohan Sharma, associate director – Research & Real Estate Intelligence Service, JLL India.

    Hundreds of homebuyers who invested in ‘dwelling units’ that were sold to them for as little as Rs 12 lakh were perhaps not aware of the fact that no cooperative society has been registered or allotted land by the Delhi government after 1992. Many of these 40 societies have been registered outside Delhi or as multi-state, multi-purpose cooperative societies.

    Experts estimate that the total amount collected fraudulently so far from homebuyers, going by the Rs 8 lakh to Rs 15 lakh paid per apartment, could be around Rs 1,000 crore.

    Under Delhi’s land pooling policy 10 lakh dwelling units are expected to come up in  Delhi’s new zones – J, K (I and II), L, N and P (I and II). These will be in areas such as Kanjhawla, Madanpur Dabas, Jatkhor and villages around Najafgarh, Chhawla and Kadipur.
    By notifying 89 rural villages as urban areas this month, the Lt Governor of Delhi Anil Baijal has removed a major bottleneck and paved the way for operationalisation of the long-pending land pooling policy. Implementation on the ground may take another year as it involves coordination between multiple agencies.

    The LG’s office and Delhi government have only notified these villages as urbanisable areas over the past two days but some of these 40-odd societies have been selling membership since the past three to four years, say experts.

    Under RERA guidelines they cannot sell without a sanctioned building plan. Showcasing agriculture land and selling apartments are an exercise in paper sales and illegal in nature, they say.

    RERA also calls for setting up of a real estate regulator and developers have to furnish authenticated copies of the title deed of a property reflecting the title of the promoter to the land on which the project is to be developed and show original sanctioned plans and layout plans. They also have to make disclosures of the total amount of money collected from allottees.

    “Societies, in their capacity as promoters, will need to register under the RERA. Since non-registration (after the setup of the regulator) is a punishable offence, societies have to continue to have to abide by this requirement. This is likely to create a transitional problem,” says a lawyer with a leading legal firm.

    “Under LPP, land can be allotted anywhere within a radius of 5 km radius after the land pooling exercise is complete. Therefore, the land most buyers have been shown may not be where their housing complex may come up,” says Ramesh Menon of Certes Realty.

    Even if some of these societies own land, it is still agricultural in nature and barred from collecting money against it. Once a regulator is appointed, these societies may or may not qualify as developer entities as per the RERA guidelines and that may jeopardise investments made till date, say experts.

    Only those societies who have construction experience, may have a combined turnover of a few crore rupees and are loan worthy to receive financial support from banks can qualify as a developer.

    Therefore, if your society does not meet these criteria, you should seek a refund.

    vandana.ramnani@nw18.com
    Vandana Ramnani

    Moneycontrol News


    Delhi land pooling: Your dream to buy an affordable house may finally come true

    Category : MPD-2021 News

    AAP minister Satyendar Jain has said that 95 urbanised villages will be declared as development areas under the Delhi Development Authority Act as part of land pooling policy.

    Removing the final bottleneck in implementation of the land pooling policy, Delhi urban development minister Satyendar Jain said on Thursday that the Delhi government will, within days, notify the 89 villages — declared as urbanised on Tuesday — as ‘development areas’.

    “A total of 95 urbanised villages will be declared as development areas under section 12 of the Delhi Development Authority Act within two-three days. While 89 villages were notified as urbanised on Tuesday, six other urbanised villages (from previous notifications), will also be notified as development areas. Once notified the DDA can start implementation of the land pooling policy,” Jain said.

    The minister also denied media reports that the Lieutenant Governor Anil Baijal’s office has bypassed the Delhi government in getting the notification issued by the urban development department.

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    Implementation of the policy will be a gateway towards availability of affordable housing in planned pockets of the city.

    With the DDA having failed in meeting the housing demand in the capital, the city has witnessed mushrooming of unauthorised colonies across the city.

    As the acquisition of land has become a controversial subject, planned urban growth had become even more difficult. With the land owner being in direct control of the development, the land pooling policy is being seen as the future of urbanisation in the capital.

    The matter had been pending for more than two years as the Delhi government had been demanding the DDA to introduce a clause in the policy that 10% of the developed land will be allocated to the Delhi government in order to carry out social sector services like construction of schools and hospitals.

    Source: Hindustan Times
    Dated: 19th May 2017


    Delhi to unlock nearly 57,000 hectares for housing: Here’s what it means

    Category : MPD-2021 News

    The land pooling policy, which is set to expand the urban limits of Delhi, was notified by the Ministry of Urban Development (MoUD) in September 2013 while the regulations for operationalisation of the policy were approved in May 2015 by the Ministry

    In a move that could unlock 57,000 hectares of land for development in Delhi and boost housing supply that would keep prices under check, Lt Governor of Delhi Anil Baijal has notified 89 rural villages as urban areas. The move would pave the way for operationalisation of the long-pending land pooling policy.

    “Land pooling is a viable alternative to land acquisition primarily due to the difficulty faced in acquiring clear, marketable and litigation-free appropriately sized contiguous land parcels for development. The decision to declare 89 villages as urban areas under land pooling in Delhi is a step in the right direction. This will lead to the availability of large land parcels to meet the shortage of housing in Delhi as well as give the much needed boost to creation of public infrastructure,” says Rajeev Talwar, chairman, NAREDCO.

    What is the land pooling policy

    Under the land pooling scheme, 10 lakh dwelling units are expected to come up in  Delhi’s new zones – J, K (I and II), L, N and P (I and II), that include places such as Narela, Bawana, Dwarka, parts of Rohini and even some villages near Chattarpur. Out of these 2.5 lakh units will be in the affordable housing segment.

    Impact on realty prices

    “The policy will go a long way in bringing about price efficiency and speculative prices will correct by almost 20 to 25 percent. But all will depend on how and at what pace the supply of land is released by DDA,” says Pankaj Kapoor of Liases Foras, adding if the land is released at a slow pace, prices will continue to remain speculative. The unsold inventory in Delhi-NCR currently stands at 2.6 lakh units.

    “The government should work towards imposing a vacant land tax that will ensure more land is released for development and people don’t choke land supply leaving room for prices to escalate,” he says.

    But the impact of the scheme on Delhi-NCR markets will not be immediate. Investors and homebuyers in NCR will start to feel the change once housing stock takes shape in Delhi which may take another three to five years from now, say real estate experts, adding everything will depend on the speed at which the scheme is executed, land released and prices at which these projects are launched.

    But will the land pooling policy play spoilsport for potential investors in NCR? “It is expected that residential supply will mute investor sentiments as he may not be able to make huge profits by putting in money in these markets as the choices available in the residential segment will be huge,” Kapoor says.

    While those working in Gurgaon or Noida may not suddenly decide to relocate to Delhi and purchase property there, others who have a job a Delhi may now think about deferring their purchase in NCR. But again all depends on for how long they are willing to wait.

    “There will not be any impact on residential prices in NCR towns immediately as the market is in any case dominated by end-users and less by investors. In the long run, when there is more clarity, real estate funds and even private developers will evaluate the opportunity in Delhi more seriously and they have already started doing so,” says Anckur Srivasttava of GenReal Advisers, adding all depends on how soon the policy will get executed.

    As for prices, there may not be a significant run-up in the next few years. They are likely to remain soft and just about keep pace with inflation due to the increase in housing options across Delhi-NCR, he says.

    Agrees Pravin Jain, president National Real Estate Development Council (NAREDCO). “There will be no immediate impact of the policy on Delhi NCR markets till the time projects actually get launched on the ground. At best, prices of these agricultural lands will increase. Also, demand for these properties will depend on the price at which these projects are finally launched in Delhi. If these are around Rs 5,000 per sq ft, buyers may still consider investing in the Capital but if they are far too expensive, they may continue to explore options in Haryana and Uttar Pradesh.”

    “Once there is more clarity, we will explore projects under the joint venture model,” says Jain, who is also CMD at Tulip Infratech.

    Success of the policy will depend on implementation

    The success of the land pooling policy will depend on the intent, time bound execution and coordination between the multiple agencies involved in the policy’s implementation, say experts.

    “State governments of Haryana and Uttar Pradesh will have to revisit their strategy and develop each of their markets as self-contained micro markets. Until now 40 percent of people who invest in these markets are from Delhi. Going forward, these markets will compete with the Delhi housing market and those that are able to generate jobs and create economic opportunities will score,” says Ramesh Menon of Certes Realty.

    The land pooling policy, which is set to expand the urban limits of Delhi, was notified by the Ministry of Urban Development (MoUD) in September 2013 while the regulations for operationalisation of the policy were approved in May 2015 by the ministry.

    However, the policy was stuck over a few demands by the Delhi government on getting 10 percent of the pooled land to develop hospitals, schools, etc.

    Vandana Ramnani

    Moneycontrol News
    Dated:19th May 2017
     


    L-G Anil Baijal clears way for implementation of land pooling policy in Delhi

    Category : MPD-2021 News

    The land pooling policy, which is set to expand the urban limits of Delhi, was notified by the ministry of urban development (MoUD) in September 2013 while the regulations for operationalisation of the policy were approved in May 2015 by the ministry.

    NEW DELHI: Lt Governor Anil Baijal has paved the way for operationalisation of the long-pending land pooling policy in Delhi by notifying 89 rural villages as urban areas.

    The land pooling policy, which is set to expand the urban limits of Delhi, was notified by the ministry of urban development (MoUD) in September 2013 while the regulations for operationalisation of the policy were approved in May 2015 by the ministry.

    However, the policy was stuck over a few demands by the Delhi government on getting 10% of the pooled land to develop hospitals, schools, etc.

    Baijal in a notification issued yesterday, the copy of which is with ETRealty, has cleared the way for the implementation of the same.

    Ramesh Menon, director, Certes Realty, however, feels it’s the first of the many steps that need be taken by the multiple authorities to actually operationalise it.

    “The cohesiveness and preparedness of DDA, Delhi government departments, MoUD and other agencies is yet at preliminary stages. Institutional investors would seek the opportunity at a much later stage,” he said.

    Menon also warned homebuyers to exercise caution and not fall prey to the euphoria being dealt by vested interests.

    According to Ashok Atri, director, Delhi Infratech, the land pooling policy is not only beneficial for home buyers but also for land owners, as they will get developed land along with the development near by.

    Under the land pooling policy, individuals or a group of land owners living in villages located on the outskirts of Delhi can pool their land and hand it over to the Delhi Development Authority (DDA), which will develop basic public infrastructure like roads, before returning a substantial portion back to the owner.

    The land owners offering between 2 and 20 hectares of land for development will receive 48% of their land back, while those giving away 20 hectares of land would get 60% of their pooled land back after development.

    The remaining land will become a property of DDA, under the Master Plan 2021.

    After the pooling exercise, the land owners can bring in real estate developers to come up with affordable residential properties.

    Majority of lands falling under this policy are in Narela, Najafgarh and Bawana.

    Source: ET Realty
    Dated: 18th May 2017

    http://realty.economictimes.indiatimes.com/news/regulatory/l-g-anil-baijal-clears-way-for-implementation-of-land-pooling-policy-in-delhi/58721973


    Rules changed to use farmland for housing

    Category : MPD-2021 News

    NEWDELHI: Paving the way for the implementation of Land Pooling Policy, the urban development department of the Delhi government on Wednesday declared 89 villages in the city as urbanised.

     The move will allow the development of these land patches under the land pooling scheme aimed at providing affordable housing to city residents.

    The villages declared urbanised are spread across the North and South Municipal Corporations. While 50 villages are under North MCD, 39 fall under the jurisdiction of the South MCD.

    As per the Master Plan of Delhi (MPD) 2021, based on a projected population of 230 lakh by 2021, Delhi would require an about 24 lakh new dwelling units.

    Till date, the Delhi Development Authority has been able to raise only 11.69 lakh residential units.

    The policy allows the land owners in these villages to surrender their land and give it to the DDA along with a development charge. The DDA will give the land to real estate developers.

    Once developed, the developer entity or land owners who surrendered their land will get back 48% or 60% of what they pooled in. The rest of the developed area — 52% and 40%, respectively — will be retained by DDA or the private builder who can put it on sale. The housing and commercial projects will have to be developed within seven years. Additional time will be given only on payment of a penalty.

    A senior official of DDA said that the role of the land development agency will be mainly of a felicitator in these areas.

    “People will have to pool the land and come to DDA. We will examine the proposal and check whether they have been adhering to the rules and guidelines or not. We will also explore the option of how to provide infrastructure such as roads, drainage and sewage system in the area,” he said.

    Leader of opposition in Delhi Assembly, Vijender Gupta, said the move will pave way for providing affordable housing to at least 20 lakh families.

    “We have been raising this issue in the DDA authority meetings and demanding lieutenant governor to intervene in the matter and issue notification as soon as possible,” he said.

    He said that this was a major roadblock in implementing the land pooling policy.

    Source: Hindustan Times
    Dated: 18th May 2017


 

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