The suburb of Gurgaon has again stolen a march over its neighbour Delhi. Always a hotbed of activity, Gurgaon has seen a frenetic pace of construction which has now resulted in the latest master plan encompassing newer areas, much farther away from the city centre. This, in a city which started witnessing development only over the past two decades or so, has led to town planning challenges and steep price appreciation in certain areas over others.
Also, the licencing mechanism of ‘first come, first serve’ – in use before this policy was introduced – has led to inefficient utilisation of land. To reiterate, out of a residential-use designated sector, only 20% of the net planned area of the sector was allotted for group housing licences. This kept large lands within such areas under-utilised.
To overcome such issues while also ensuring that smaller landowners do not feel crowded out while prime licences get awarded to larger firms, the government of Haryana has come out with a new policy titled ‘New Integrated Licencing Policy 2015’ (NILP).
Small landowners to benefit
The New Integrated Licencing Policy 2015 will not only set aside anomalies of the past but will also recognise unused land parcels that can unlock a significant development potential. This policy now empowers every landowner holding more than one acre of land by awarding him a flat transferable development right (TDR) of 1.0, which he can sell to a third party, even in cases where land is acquired by the government for sectoral development works.
The policy will enable small landowners to voluntarily monetise their land by participating in the entire process of licencing, real estate development and marketing and sale of TDR. Previously, there were issues like inadequate compensation against land acquired by the government for external development work. That has been taken care of, as small land owners can sell TDRs at market prices now.
Level playing field for smaller developers
NILP 2015 also recognises the pitfalls that exist in consolidating the minimum of 100 acres of land that are required for integrated residential townships. Hence, the limit has been reduced to 25 acres. This will allow more developers to enter the market. It has become a level-playing field for smaller developers.
Boost to affordable housing and community services
Rules regarding the development of affordable housing on a certain percentage of every developer’s land parcel were under-serving the said sector. NILP 2015 now ensures that 12% of the total area of any colony licenced under this policy shall be directly transferred to the government housing board on subsidised prices for creating affordable housing and housing for economically weaker sections.
A further 10% of the area shall be transferred free of cost to the government for creating community facilities. The developer shall be able to utilise the FAR against the transferred area within the existing licenced colony.
Further changes have been made towards grant of commercial licences in commercial belts beyond the 50% limit of net planned area, which will fuel associated commercial development within the hyper-potential urban complex of Gurgaon-Manesar. Similar changes are applicable to the other urban complexes of Sohna, Faridabad-Ballabhgarh and others in the rest of the state.
Better utility of land
The earlier rule meant that only 20 acres in a sector of 100-acres could be used for group housing. This kept a lot of land unutilized as it was meant for commercial or plotted development but did not have enough takers. Now, with NILP, any entity with land area more than 25 acres can avail of a global FSI of 1.0 and density of 250 PPA (persons per acre) for the project and is free to use the residential component of a licenced colony for group housing projects as well. This can be undertaken even after the 20% group housing quota has been met in that particular sector.
This will not only lead to a more balanced development with lower density but also has the potential to allow development of over 2.7 lakh new apartments besides leaving more than 1,400 acres for the government to build low-cost housing stock.
Authored By: Rohan Sharma – Associate Director, JLL Research & REIS
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