Delhi villages’ upgrade to boost housing supply
The Delhi government’s notification to declare 89 of its rural villages as urban areas will help to operationalise the land pooling policy in the national capital.
“The decision will open land parcels in areas such as Dwarka. Over the next 12 months, we expect a number of housing projects for both the mid-segment and economically weaker section to come up, which will also control residential prices,” said Rohan Sharma, associate director (research & real estate intelligence service) at JLL, a property consultant.
With an estimated 57,000 hectares (140,000 acres) to be unlocked, rating agency ICRA expects the policy would result in creation of around 2.9 million houses with an average size of 30 square metres (322 sq ft) each for poorer section.
“The move will boost the land pooling policy. Such a development in turn will result in a healthy availability of residential dwelling units,” said Rajeev Talwar, chief executive officer at DLF, the country's largest property developer.
According to the pooling policy, owners with small chunks of land come together and give their pooled land to the Delhi Development Authority (DDA) to form a bigger and more integrated parcel. Basic infrastructure facilities are developed on this land through private participation, within the framework of the Master Plan of Delhi, 2021, and respective zonal development plans. A part of the land is returned to the owners, who can partner with real estate developers to build apartments and residential properties. The rest is retained and developed by DDA.
Two categories of land pooling exist. Category I covers owners with land parcels of 20 hectares and above. Category II is of holding between two and 20 hectares.
The ministry of urban development notified the operational guidelines to implement the land pooling policy in May 2015. Apparently, DDA was awaiting a notification from the government of Delhi to classify agricultural areas within the proposed extensions as ‘urbanisable’. With the latest notification, DDA will be able to operationalise the land pooling policy, ICRA said.
ICRA said the notification would have several positive impacts. First, its participatory nature. Litigation on account of issues like compensation has gained ground over the past decade, which the pooling policy intends to address equitably for stakeholders.
The policy is expected to boost housing construction, which will create significant jobs in the sector. There is huge potential here, with 59,835-73,750 hectares in builtup area expected to be developed over the medium to long term.
Shubham Jain, vice-president and sector head of ICRA, said, “With many positive facets like participative development, employment generation, increase in housing stock and rationalisation of real estate prices, the land pooling policy is a thumbs-up for the real estate sector in the capital. Given the multiplier impact, we expect an overall pick-up in investments and economic activity. It will also help to achieve the Centre’s vision of ‘Housing for All by 2022’.”
However, some developers said the Delhi government’s move would take a lot of time to see desired results.
“First, land has to be pooled. Then, infrastructure has to be built. It will take a lot of time,” said Getamber Anand, chairman and managing director of ATS Infrastructure.