Moneycontrol
| Source: Moneycontrol.com

Your affordable home could well be built on govt’s unused salt pan or tea estate

With Prime Minister Narendra Modi's office recently asking all government departments to identify unutilised land, developers are hoping that such land will soon be made available to them

The affordable home that you are hoping to buy soon could come up in one of the many parcels of surplus land owned by public sector undertakings (PSUs) or government bodies.

With Prime Minister Narendra Modi's office recently asking all government departments to identify unutilised land, especially in developed government colonies, to plan affordable housing projects, developers are hoping that such land will soon be made available to them to enable them to lend their hand in the government’s move to push building of affordable homes.

Most developers across the country agree that getting land to develop affordable housing is the biggest challenge and are currently exploring other opportunities.

Some builders have already initiated talks with governments for acquiring their unused land of state-owned entities. “Our company is in talks with the Haryana government for a land parcel spread across 150 acres on which 20,000 such houses can be constructed. It is viable to construct affordable housing units on such lands but all depends on the terms and conditions and the revenue sharing model,” says Pravin Jain, CMD, Tulip Infratech, adding the company is planning to come up with 750 affordable housing units in Gurgaon.

Urban and Development Minister Venkaiah Naidu has also said that land remains the biggest issue that states face today to build affordable homes.

Niranjan Hiranandani, CMD, Hiranandani Communities, feels availability of cheaper land will help build more affordable homes, especially in places like Mumbai. “In Mumbai, land is very expensive. The chances of getting land from private owners at a price-point which would support an affordable housing project looks tough. So, the alternative is to convince the government to allocate some of its vast land holdings for such projects. Within the city, government land, and select locations in peripheral areas of the MMR are options where land for affordable housing could be procured by developers,” says Hiranandani.

He said his company was planning projects which will fall under the ambit of affordable housing at their ongoing projects in Thane and Panvel.

The government of Maharashtra (GoM) has decided to use the salt pan lands across Mumbai and its metropolitan region for housing projects, slum rehabilitation and infrastructure development. GoM has appointed Mumbai Metropolitan Region Development Authority (MMRDA) as the implementing agency for development of salt pan lands in Mumbai.

Mumbai has an estimated 5,379 acres of salt pan land and the CM has declared his intent to utilise around 600 acres of the said salt pans for building affordable homes.

Urban experts suggest that large tracts of land located within city limits such as unused parcels held by public sector undertakings, central authorities such as railways and defence, salt pan lands and tea estates have the potential to be repurposed for affordable housing.

Salt pan lands can be used for the purpose, subject to a change in zoning of the land by the state government. This is, of course, subject to norms and regulations (the Development Control (DC) rules and Coastal Regulatory Zone (CRZ) guidelines.

Among those considering hiving off surplus land for affordable housing is railways. “Railways is open to the affordable housing opportunity subject to feasibility and revenue potential,” says a senior railway official. It is currently planning to redevelop a railway colony in Sarai Rohilla for which bids will be invited in the next few months.

The price of land for both conventional and affordable projects is the same. It would help a lot if unused land by PSUs could be utilised for developing affordable housing,” says Pradeep Aggarwal, Co-founder and Chairman of Signature Global, that is currently developing 7,400 affordable units in Gurgaon, Haryana and recently received financing of Rs 200 crore from global investment firm KKR for its affordable housing projects.

The company plans to launch 25,000 units in this segment this year across Haryana, UP and Maharashtra and develop over a lakh affordable homes until 2022.

Tea estates, defence land

A large amount of land within city limits can be repurposed for various urban uses, particularly affordable housing. These include, salt pan lands, lands vested with tea estates that have since stopped production and which are already encroached upon (e.g. cities of Kalimpong, Kurseong and Mirik in North Bengal), land that can be reclaimed from Central or state PSU townships, which usually comprise vacant land that is either already encroached upon or unlikely to be used by the PSU for any foreseeable purpose (e.g. SAIL steel plants at Durgapur, Bhilai, BHEL plant at Bhopal).

Land vested with Central authorities such as railways or defence, or even the state forest departments, but which are not actually being used or are likely to be used for any particular purpose, says Digbijoy Bhowmik, Head Policy Affairs, South Asia, RICS.

Many of these can be used to settle encroachers on an ‘in-situ’ basis, using a more compacted form of development as governed by present day planning and architectural practices, releasing the balance land for more normative development – including, amongst other things – affordable housing, and more remunerative forms of real estate which can offset the cost of the resettlement, as well as increase the availability of serviced land for development.

Usually, exercises such as these become commercially viable with a fair mix of commercial and premium housing in addition to affordable housing, he says.

The government has set a target of 2 crore housing units by 2022 under the Housing for All mission but the biggest challenge is procuring land. Members of builders’ body the Confederation of Real Estate Developers’ Association of India, or CREDAI, have announced launching a total of 375 affordable housing projects across the country with investment commitment of Rs 70,000 crore.
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