How More Property Data Will Help Plan Our Cities Better

Home buyers in India currently do not have sufficient data to compare housing prices in various parts of the country, thanks to the absence of easily accessible statistics on real estate. The barriers that urban planners face are similar. Without much information on real estate assets in a city and data on construction, planning infrastructure and imposing regulations becomes difficult. Collecting such information was difficult in the past because the required technology was not there. But that is no longer the case.

A step ahead

The Bruhat Bengaluru Mahanagara Palike (BBMP) has decided to make information about properties available on its website soon. The basic details of assets, details on leasing, settlement and property registration of nearly 5,000 properties will be available on the website. Such information can be of great help in the government's missions of 'Housing for All by 2022'.

In the United States, for example, the American Housing Survey has generated enough data to prove that the cost of housing in most parts of the country is not much higher than the cost of construction. What does this imply? If housing prices reflect the cost of construction in most parts of the US, it is not easy to make housing more affordable without significantly lowering construction prices.

One of the reasons why the master planning methodology is looked down upon by many researchers is that this needs a lot of data and analysis. Such information is not always difficult to collect, but it soon turns outdated.

By looking at the neighbourhoods where building permits are issued, for example, authorities can keep track of the trends in market demand for housing. Such land maps can provide data on how land is used, the type of houses in which people live, and so on. Based on such information, planners could find out whether the city should be expanded into new areas, or the density of the existing areas should be increased. For example, if an area is as densely developed as it can be, this means that the demand for floor space is quite high.

Unfortunately, in many parts of the world, including India, planning departments do not have access to information on real estate prices, sorted by geographical location in which the assets are located.

It may be pointless to impose regulations on land use without knowing its current usage pattern. For example, in city-states like Hong Kong and Singapore, the strength of demand for real estate in each neighbourhood is roughly the basis to decided what should be built, where it should be built, how tall the buildings should be, and where residential and commercial buildings should come up.

Back to Bengaluru

Long ago, when information technology major Infosys was planning to expand, it realised it would not be able to do so in the downtown of Bengaluru – the company's large number of employees could not be accommodated in downtown buildings, and it was not possible to build very tall, without violating regulations. To beat this problem, Infosys built campuses far from the city. However, many employees who worked in such offices far from the city felt they would have been better off in an ordinary building in the central part of the city. This indicated that demand for floor space was much higher in Bengaluru downtown.

This also indicated that the floor area ratio – the ratio of the floor area constructed to the area of the plot – should be much higher in Bengaluru downtown. The only way to find out this is to look at the demand for real estate. By looking at the price of real estate in every part of the city, planners will be able to conceptualise better. When land is more expensive, for example, more floor space should be constructed to use valuable land as economically as possible.

This is not all. Governments, municipal corporations and planning agencies should regularly monitor the change in the price of real estate assets. This is because the demand situation changes often. If they had the data on playgrounds, open spaces & idle land, and other such spaces, governments and local authorities would be able to see whether there was space in areas where the cost of land was high. If there is enough idle land in such areas, the cost of housing could be brought down by utilising such land to a level closer to the cost of construction.