Will the change in Delhi’s Land Pooling Policy affect NCR’s realty market?

For starters, let’s understand what does Land Pooling Policy mean?

How does it impact property buying and selling?

Should you invest in a property or in a pooled land?

And, most important, what is the current policy status?

These queries are likely to be raised by investors interested in buying a property in Delhi’s National Capital Territory.

Land Pooling comes into effect when small chunks of land are owned by group of owners who assemble for the development of infrastructure as per the provisions of the Delhi Development Act 1957.

After the development work is complete, the Land Pooling agency redistributes the land among the title holders (land owners) after deducting the cost of the infrastructure development. This is done to attract and infuse private capital into the under-developed housing sector in a city’s outskirts, and reduce the pressure on the land that is already saturated.

Will Delhi's Land Pooling Policy change NCR's Realty

Will Delhi’s Land Pooling Policy change NCR’s Realty

What’s in it for the buyers?

Under the law, while land owners offering between 2 and 20 hectare of land for development are entitled to receive at least 40 percent of their land back, after the development work is complete, those who give up the maximum (20 hectare) stand to gain 60 percent of their pooled land back once the work on the infrastructure (roads, drainage system, electricity poles etc.) development is complete. The remaining is claimed by the Delhi Development Authority (DDA) and subsumed under the Master Plan 2021. The changes clearly spell out the new land use policy – about 55 per cent for residential construction, five percent for commercial/industrial and 20 percent for open, green areas, and the rest would be reserved for common public facilities, such as educational institutes, hospitals, police and fire stations etc.

The following table gives a picture of the present land use under Delhi’s Master Plan

Land use

% of Land

Residential

45-55

Commercial

4-5

Industrial

4-5

Green/ Recreational

15-20

Public & semi public Facilities

8-10

Circulation

10-12

Delhi Government’s most recent notification declares 89 out of 95 rural villages as urban villages, which puts more land at the disposal of the builder community for development, under the Land Pooling Policy provisions. With an estimated 55,000-57,000 hectares of land expected to get unlocked, as per this notification, there is room for building around 2.9 million new dwellings for the economically weaker section (EWS) of our society, of an average size of 30 square meter.

This will not just accelerate construction activity but also create more jobs in the civil and construction sector. Further the influx of such a huge inventory of affordable houses is likely to keep property prices under check for the common man.

How will it work?

Landowners living in the notified areas, who want to gain from this change should pool up their holdings and offer them to DDA for development that can be phased out in a planned manner. DDA can develop all the basic amenities in partnership with private, RERA-accredited developers under the Public Private Partnership (PPP) model.

How will it help homebuyers?

Middle-income families that are unable to afford a house in Delhi, can easily book one in the NCR, within easy commuting distance of the metropolitan city. With less pressure on the land, there is also the additional attraction of constructing world-class amenities in the NCR.

“All manner of housing units, from the ultra-modern to medium-class and affordable will now be available to suit every budget and lifestyle need,” says Honey Katyal, the founder-chairman of Investor’s Clinic, a realty consultancy with a pan-India presence.

“We foresee around 25 to 30 lakh new units coming into the inventory over the next five to 10 years on around 40,000 acres of land in an around the NCR,” says Sakshi Katyal, Chairman of Home & Soul, a land development company with several completed projects in the NCR, under its belt.

How does it help land owners?

Providing a lot of relief to small land-owners, who are mainly farmers, there is a self-penalty on DDA for delays, and flexibility to them to instead take their projects to private developers. The penalty on DDA amounts to two per cent of the External Development Charges (EDC) for the first two years and three percent for the period thereafter in case of delay beyond the completion of the project or five years, whichever is later.

And now, with RERA notified for NCT of Delhi, it will be extremely difficult for private builders to delay projects or make investors wait for approvals and sanctions.

So what are you waiting for? Log in or call Investor Clinic for further help on advice on new changes in the Land Pooling Policy.

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