Delhi Land Pooling Policy to Boost Real Estate Market

Even if you have lived in the nations capital, there are areas which many are unfamiliar with. For example: Neb Sarai, Baprola, Bakkarwala, Goela Khurd, Neelwal, Sultanpur Dabas, Bazidpur Takran, or Mukhmelpur. Have you heard this names before. If not, do not worry. You will hear some of these names on a regular basis over next 5-10 years. These are the names of some of the villages located within Delhi NCR that have now been declared as Urban Areas by the AAP Government. Of the 89 villages that go the tag of Urban Areas, 50 are in North Delhi and 39 are in South Delhi.

The much delayed Land Pooling Policy or LPP has now been approved. Following this, the Delhi Government has declared 89 villages as Urban Areas. Under the policy framework, the land owners of these 89 villages can pool their land and give it to the Delhi Development Authority (DDA). The DDA will then develop roads, hospitals, schools and other infrastrcuture facilities and return a large chunk back to these villages. The formula for which has also been worked out. For example:

Give 2-20 Hectares of land to DDA - Post Development, DDA will return 48 per cent land back. There is a further division of what should constitute the 48 per cent of the developed land. Of the 48 per cent developed land, 43 per cent land will need to be house residential projects, 3 per cent will be commercial projects and the balance 2 per cent will be developed for public/semi-public use.

If under LPP, the villages give more than 20 hectares of land to DDA, then post development of this land parcel, DDA will need to return 60 per cent of the developed land of which 53 per cent will house residential projects, 5 per cent will have commercial projects and the balance will have public/semi-public utilities developed on it. However, there is a small catch. Along with the land parcel, the farmers/villagers will have to pay Rs 5 crore per hectrare to the DDA as External Development Charges or EDC. For some reason, if the EDC is not paid to DDA, then post development, the DDA will need to return only 35 per cent of the developed land as residential colony.

After the approval of the LPP for the 89 villages, the Delhi government won't need to buy land from the DDA for developing facilities such as electrical sub-stations, stadiums, industrial areas, old-age homes, hostels, schools, etc.

DDA or a builder in-charge of the development will need to develop it in up to 7 years. If, for some reason, DDA is not able to develop the basic infrastructure before the completion of the projects (residential/commercial), it will be required to pay to the land owners 2 per cent of the EDC in the first year and 3 per cent in the successive years.

Fifteen per cent of the residential development needs to be for the Economically Weaker Section or EWS and the maximum permissible Floor Area Ration or FAR is 400 per cent.

Boost to Real Estate
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. Now DDA has estimated that on a 1,000 hectare of land, it can construct 2.5 lakh houses of which 50,000 will be for EWS.

According to Delhi Urban Development Minister Satyendar Jain, this move will unlock almost 70,000 acres of land in the city, allowing construction of almost 20-25 lakh houses in the next five to ten years. Till date, the DDA has been able to raise only 11.69 lakh residential units. Jain said by next week, all these areas will be declared as development areas under Section 12 of the Delhi Development Authority (DDA) Act. "We can then get the work started," Jain said on Thursday. "With this, houses in Delhi will become more affordable. More and more high-rise buildings will come up on this land,"Jain added.

The Master Plan of Delhi 2021 is based on a projected population of 230 lakh by 2021. Therefore, Delhi needs around 24 lakh new housing units. Till date, DDA has built only around 12 lakh residential units in the city.

For LPP implementation, the areas housing these 89 villages have been divided in five zones — L, N, P-II, K-I and J. The land parcels for development fall west, north-west, south, south-west and north Delhi. The DDA claims it would see the emergence of new sub-cities such as Dwarka that came up in the late 1990s. Planned housing is also expected to help prevent growth of illegal colonies across the city.

With policy issue out of the way, the focus will now shift on how swiftly and ably the DDA is able to begin the actual construction and later the delivery of projects.