Delhi’s Lieutenant Governor Anil Baijal’s nod to the Delhi Development Authority’s Land Pooling Policy (LLP) and declaration of 89 rural villages as urban areas are set to fill up the state’s infrastructure deficit and may lead to correction in NCR’s realty prices. In fact, DDA’s Land Pooling Policy was gathering dust for nearly two years now, despite being notified by the Union Ministry of Urban Development a long time back. The dispute between the Delhi government and DDA on certain rule amendments saw the policy go nowhere.
However, with the latest notification by the L-G, things are likely to change for the better. “The approval of the land pooling policy would improve the supply of commercial and residential segment in the city. The policy operational guidelines were issued in 2015 and this is a positive step especially when the country is looking forward for ample land to achieve the objective of Housing for All by 2022,” says Surabhi Arora, Senior Associate Director-Research, Colliers International India.
As per the provisions of Master Plan 2021, development in urbanisable area of planning zones J,K,L,N & PII is to be taken up through the new land policy based on the concept of land pooling. According to this policy, the land parcels owned by individuals or group of owners are legally consolidated by transfer of ownership rights to the designated land pooling agency/DDA, which later transfers the ownership of the part of land back to the land owners for undertaking development for such areas as per the defined norms and categories.
“The landowners would receive between 48% and 60% of the pooled land for development purposes back from DDA in lieu of compensation and they can use that developed land in any way they desire. DDA would use the remaining portion of the pooled land for creating the associated infrastructure as well as for public and semi-public areas,” says Rohan Sharma, Associate Director-Research & Real Estate Intelligence Service, JLL India.
According to Sharma, this policy is likely to result in residential development projects across the prime city, which has an acute shortage of housing and where most of the housing needs are fulfilled by DDA. The policy is estimated to unlock around 20,000-25,000 hectares of land across Delhi, primarily in the urban villages and smaller towns at the city’s peripheries. Such development is likely to result in a healthy availability of residential dwelling units which will not only enable availability but also help in keeping a control on residential prices.
A PTI report said that the policy’s implementation assumes significance as the DDA’s Master Plan Delhi (MPD) 2021 proposes construction of 25 lakh housing units by 2021, for which 10,000 hectares of land will be required. As per DDA estimates, 2.5 lakh houses, including 50,000 EWS (Economically Weaker Sections) units, will require 1,000 hectare of land.
The policy, thus, has the potential to change the dynamics of the residential market in the NCR with supply of affordable apartments within the geography of Delhi. The NCR-based developers too seem to be excited over the prospects of land pooling and its impact on the NCR markets.
Abhishek Goyat, Managing Director of the Antriksh Group, says, “Land pooling as notified by Delhi’s Lt Governor will help people realise their dream of having house in Delhi. With option now open for affordable houses and homes for EWS, Delhi will have less slum area and thus a better outlook for a capital city of the country. This step will help mobilise the real estate market of Delhi NCR also as these areas will try to compete with the new real estate market of Delhi.”
Others feel that the implementation of land pooling will bring about a lot of uniformity in the region’s real estate sector. “After prolonged research works, it has been observed that land pooling might solve a lot of problems while procurement. There have been many infrastructure projects which are aimed at changing the landscape of a real estate destination, but get stuck because land procurement hits a roadblock in the absence of a land pooling policy. We can hope that this policy is soon implemented in other states across the nation and various projects which got delayed because of this might be started again,” says Avneesh Sood, Director, Eros Group.
Abhishek Bansal, Executive Director, Pacific Group, says, “Land pooling is a major factor which will be influential towards Transit Oriented Development (TOD) in the country. TOD will be a major factor in Smart Cities’ development and huge land parcels would be required next to each other to carry out these vast planned developments. In the absence of a land pooling policy, land procurement itself will be a very tedious task and end up taking a substantial time out of the stipulated time for the project.”
Some developers believe that the absence of a land pooling not only affects the development prospects of the government or developers alone, it somewhere affects the buyers as well. “Infrastructure projects getting delayed in the vicinity of real estate projects not only delays a project, but even after completion, the amenities which a buyer might have considered while finalising the purchase would be missing at the time of possession. In some cases, transportation can be a big issue as well if connectivity projects are delayed,” says Rakesh Yadav, Chairman, Antriksh India Group.
Whatever be the case, industry experts don’t expect land pooling to start soon or property price correction to take place in the short term. However, it may lead to correction in NCR’s realty prices in the long term. “Even if implemented at a good pace, it would take about 4-8 years before the supply starts hitting the market. We do not expect any price correction in the short term. However, it may affect the demand in the satellite city for new projects as Delhi being the national capital has its own magnetism when it comes to preference for home buying,” says Arora.
Some developers, however, don’t see the DDA’s land pooling policy affecting the NCR market much. “The land pooling policy will resolve the problem of scarcity of land in Delhi. However, it is not going to create a huge impact on the NCR market for several reasons. First of all, the basic land price of Delhi will always be high than that of the NCR and there is a huge demand of homes in Delhi because of its location due to which the price of property in Delhi will remain high. Hence it will be difficult to cater to the affordable and lower mid segment group there. Secondly, a large number of office and commercial spaces are being developed in NCR, resulting in more and more MNCs shifting to these areas. Hence people who want to be closer to their offices would like to remain in the NCR only,” says Suresh Garg, CMD, Nirala World.
Dinesh Jain, MD, Exotica Housing, is of similar opinion. “It is too early to predict, but I feel there is no comparison between the property of Noida, Greater Noida and the land bank available after land pooling on the outskirts of Delhi. At a time when ready-to-move-in properties are available at pocket-friendly prices at prime locations in Noida, Expressway and Greater Noida with excellent facilities, connectivity, amenities and developed infrastructure, then it will be very tough for a home buyer or end user to wait for a property that may command a premium for being a part of the Capital,” he says.