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Land pooling policy of Delhi

LiveMint logoLiveMint 12-06-2017 Ashwini Kumar Sharma

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.

Sudhir Pai, chief executive officer, Magicbricks

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 win-win 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. 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.

Ramesh Nair, chief executive officer & country head, JLL India

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. 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.

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.

Amit Oberoi, national director, knowledge systems, Colliers International India

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.

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, Chandigarh and Bhubaneswar. Hence it is critical to have a robust plan for creating a holistic master plan for a modern mega-city. 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.

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