The committee was formed in March by the Union Housing and Urban Affairs Ministry comprising officials of the Union Finance Ministry, Uttar Pradesh and Haryana state governments, the Insolvency and Bankruptcy Board of India, the National Housing Bank and the Real Estate Regulatory Authority (RERA) of Haryana and UP.
As transparency in the housing sector is a grow- ing cause of concern, the Real Estate Regula- tion and Development Act (RERA) was enacted in 2016 intended to introduce uniform and standardized transactions in the real estate sector, protect consumer interests, to encour- age investment in the sector and to promote transparency. Ministry reports disclose that till date, 1,19, 957 real estate projects and 84, 991 real estate agents have been registered in RERA and that 1,18,154 com- plaints have been disposed of by the RERA authorities through- out the country. Implementation of RERA, however, faces challenges of non-compliance, information asymmetry among the home buyers and delay in the griev- ance redressal process. Another initiative towards rescue of stalled projects which hold up housing supply, is a Spe- cial Window for completion of Affordable and Middle Income Projects (SWAMIH) for funding stalled projects. Reportedly, 342 proposals benefiting 2,18,699 cases have been unlocked with a funding of Rs 94,367 crore. One of the most critical challenges to provide affordable housing especially in urban areas is in the limited nature of supply of urban land. Urbanization has grown at a fast pace, with the proportion of urban population rising from 27.8 per cent in 2001 and is esti- mated to constitute 89 per cent of the total population in 2051. Apart from the original resi- dents in these urban areas, migrants from rural and peri- urban areas who come to the cities in search of employment, require shelter and housing. Initially settled in rental housing, a large number of these households aspire for their own dwellings. Urban development in the form of infrastructure, commer- cial and business enterprises, schools and hospitals, markets and post offices, bus terminus, railway stations and airports all make their demand on urban land which is always in limited supply. This pushes up land prices, encourages speculation and creates a shadow economy. This calls for a renewed emphasis on urban land use planning. A report of the erst- while MoUD on the draft guide- lines for land use planning was circulated in 2007 with the objective that “Land markets are to be made ef- ficient, equitable, environmentally sound and sust- ainable, to address market imperfec- tions, inequitable land distribution, undesirable land prices, stakeholder interests and gov- ernment interven- tions.” The guidelin- es recommended Review of the LA Act 1894, assess- ment of the land market through latest information on operation of the land market in terms of prices, supply of serviced land and the number of public proj- ects to be undertaken by the Urban Local Bodies. Such data was proposed to be placed in the public domain. The guidelines also suggested that incentives such as higher FSI and disincentives such as vacant land tax be introduced towards utilization of unutilized land. While emphasizing on the need to prepare and adhere to Master plans, the guidelines had called for EWS/ LIG housing to be provided for by upgradation and relocation of slums. Further recommendations were to deregulate development controls, and to review build- ing/land regulations periodical- ly so as to assess their impact on land markets. The need for a financial, institutional and spa- tial structure was highlighted. In particular, property taxes, which relate to market rents, were recommended to be reviewed to capture gains in land value over time and on account of developments in the locality. Densification of major transport corridors, decentral- ization and digitization of data of urban land right down to the ward level, optimization of FSI based on land and property val- uation data and a land and property information system were also incorporated in the guidelines. Another initiative in this direction, namely the Urban and Regional Plan For- mulation Guide- lines 2015, has dis- closed proposed land use for use of urban centers wherein the per- centage of devel- oped area for resi- dential purposes in small, medium, large cities and Metros have been identified as 45-50 per cent, 43-48 per cent, 36-39 per cent and 36-38 per cent respectively. The URDPFI guidelines also recommend that a detailed study be undertaken on the correlation of the effects of FAR/ densities in towns and that guidelines be adopted for opti- mal use of land. A recent research paper published by SPSD (Spatial planning Sustainable Develop- ment) has identified certain cri- teria to strengthen urban land use planning. Categorized as physical, social, economic and institu- tional, the paper recommends use of such criteria towards determining the process of land use allocation. The time has come for peri- odic and regular publication of master plans, city plans with suitable zoning according to land use and periodic updated disclosure of building regula- tions. These attempts would, in a large way, provide information about the quantum of land that is available city wise, and indi- cate whether there is suitable scope and need to develop satel- lite townships with good con- nectivity to the core city, and the exact permissibility of building regulations in terms of FAR, FSI etc. Such plans and regulations would require regular updates to take into account the changing demand and supply scenario for urban housing as well as other urban activities. Ward wise decentralized database, application of the BHUVAN NUIS app in prepara- tion of Master plans, adherence to categorisations as laid down in the National Land Use Policy of 2013 and reliance on the Digi- tal Land Records Modernization Programme would lead to infor- mation symmetry. Such transparency in dis- semination of land and property information would encourage new entrants into the housing sector and accord the buyers the advantage of informed choice. Development fees is anoth- er concept which the city administrators need to explore to prevent speculative pricing which, although triggering an upward movement of real estate investment, are often passed on to the consumers, which RERA needs to regulate. City administrators could also initiate reflection of devel- opment impact in the property taxes which requires to be regu- larly reviewed by the urban local bodies. In fine, structural reforms such as regular publication of land use and planning master plans, implementation of city plans, updating building regula- tions, digitized property rights, strict implementation of RERA and introduction of develop- ment fees and suitable reflection in property taxes can largely introduce transparency and reduce speculation in the sector, thereby moderating prices and making houses more affordable to the lower and middle income groups who make up most of India. Another initiative with far reaching consequences could be in the development of satellite townships with strong connec- tivity to the core cities. With assured commutable distances to their places of employment, households could continue to reside in the satellite habitations which will enable living in a conducive environment, reduce pressure on core land and ease prices in the sector, thereby ensuring sustainable urban habitat.