Delhi villages' upgrade to boost housing supply

The Delhi government’s notification to declare 89 rural villages of 95 as urban areas will help to operationalise the land pooling policy in the national capital and pave the way for affordable housing for the mid-segment and economically weaker section. 

“The decision will open up land parcels in areas such as Dwarka. Over the next 12 months, we expect a number of housing projects for both the mid-segment and economically weaker section to come up in the city, which will also control residential prices,” said Rohan Sharma, associate director (research & real estate intelligence service) at JLL, a property consultant. 

With an estimated 57,000 hectares (140,000 acres) of land to be unlocked, rating agency Icra expects the policy to create around 2.9 million houses with an average size of 30 square metres (322 sq ft) for the economically weaker section.

“The move will boost the land pooling policy. Such a development in turn will result in a healthy availability of residential dwelling units,” said Rajeev Talwar, chief executive officer at DLF, the country’s largest property developer. 

According to the land pooling policy, a group of owners with small chunks of land come together and give their pooled land to the Delhi Development Authority (DDA) to form a bigger and more integrated parcel. Basic infrastructure facilities are developed on this land through private participation, within the framework of the Master Plan of Delhi, 2021, and respective zonal development plans. A part of the land is returned to the owners who can partner with real estate developers to build apartments and residential properties. The rest is retained and developed by DDA. 

According to the policy two categories of land pooling exist — category I includes owners with land parcels of over 20 hectares and above, and category II, with holding between two hectares and 20 hectares.

The ministry of urban development and DDA had notified the operational guidelines to implement the land pooling policy in May 2015. DDA was awaiting notification from the government of the national capital territory of Delhi to classify the agricultural area within the proposed extensions as ‘urbanisable’. With this, DDA will be able to operationalise the land pooling policy, Icra said. 

Icra said the notification would have several positive impacts. First, the participatory nature of the policy. Litigation on account of issues like compensation has gained ground over the last decade, which the land pooling policy intends to address equitably for stakeholders.

The policy is expected to boost housing construction, which will create significant jobs in the sector. There is a huge potential for growth in housing construction, with around 59,835-73,750 hectares in built-up area expected to be developed over the medium-to-long-term. 

Shubham Jain, vice-president and sector head of Icra, said, “With many positive facets like participative development, employment generation, increase in housing stock and rationalisation of real estate prices, the land pooling policy is a thumbs-up for the real estate sector in the capital. Given the multiplier impact, we expect an overall pickup in investments and economic activity. It will also help to achieve the Centre’s vision of ‘housing for all by 2022’.”

However, some developers said the Delhi government’s move would take a lot of time to see desired results. 

“First, land has to be pooled. Then, infrastructure has to be built. It will take a lot of time,” said Getamber Anand, chairman and managing director of ATS Infrastructure.