Delhi To Get 1.6 Mn New Homes In Next Eight Years

Delhi has always been a hotspot when investing in real estate in India. But, due to land scarcity, the national capital now faces the challenge to overcome the growing disparity between supply and demand.

In May, the Land Pooling Policy received approval from the Ministry of Urban Development. This policy, drafted by Delhi Development Authority (DDA), might help to extend the urban limits to accommodate more people.

The Policy

In the past decade, DDA has been unable to acquire any land in the national capital due to the strict provisions in the Land Acquisition Bill. With the new land pooling policy, the body will be able to unlock about 20,000 hectare of land for urbanisation. This will allow DDA to construct around 2.5 million homes in the Indian capital over the next six to eight years to meet the demand for residences. DDA authorities have asserted that the land pooling policy will be the “turning point”, sufficing the need of homes in the capital. The implementation of the policy will translate into the availability of more affordable apartments in Delhi in over next 10 years.

The amendments

The policy focuses on these five points:

• Development of infrastructure by DDA
• Mandatory housing for economically weaker sections (EWS)
• Enabling farmers to reimburse the development charges
• Transparency in dealing with returnable land
• Efficient usage of approved floor area ratio (FAR)

The development process

The approval of the Ministry of Urban Development with respect to DDA's Land Pooling Policy will translate into unlocking more than 20,000 hectares of land for developing more that 1.6 million residential units in the outskirts of the capital. This policy approval will give DDA access to land through 95 villages that will be developed in next 10 years. These units will be utilised to accommodate the growing population of the city, which is estimated to grow from the current 17 million to 23 million by 2021. According to the Master Plan 2021, DDA plans to meet its “Housing for All by 2022” target.

The urbanisation of this allotted land will be done in association with the private sector, which will be responsible for land assembling for DDA under Category 1 (land owners with land over 20 hectares) and Category 2 (land owners with land 2-20 hectares). The returnable land for Category 1 would be 60 per cent and for Category 2. 48 per cent. The remaining of the land would be retained by DDA. Those residents who applied for re-development through this policy would also be granted an additional 400 FAR.

The amendments have also fixed an annual external development charge (EDC) for any delays in completion. The penalty for the first two years is fixed at two per cent and three per cent for every year thereafter to a maximum of five years. This will be payable by DDA to the Developer Entities (DE) such as land owners/farmers.

The clauses

• Farmers unable to pay EDC, yet willing to participate would get 35 per cent of their returnable land, instead of 43 per cent
• Participants have to engage mandatorily in the construction of independent block of residential units for the EWS
• Entire FAR should be used and the units for EWS must amount to at least 15 per cent over and above the 400 per cent, the maximum permissible FAR for residential property
• This 15 per cent would be equally divided between the developer and DDA

With this policy Delhi will provide home to EWS and will also tap the private potential, which is targeted towards building of smart city. DDA has started inviting applications under this policy.