DDA to allow private players to buy land for housing
The auction will be of plots that were earmarked as residential zones as per the Master Plan of Delhi, 2021, and the process could start as early as October, according to DDA officials.
The Delhi Development Authority (DDA) has decided to auction land for residential projects to private developers for the first time, in an attempt to meet growing demand for housing in the national capital at a time when some of its more recent projects have drawn a tepid response.
The auction will be of plots that were earmarked as residential zones as per the Master Plan of Delhi, 2021, and the process could start as early as October, according to DDA officials. Such plots were previously meant for Cooperative Group Housing Societies (CGHS) but allotments had been halted since 2005 following irregularities in the process. Bids will also be accepted from CGHS applicants.
The decision was taken at a meeting chaired by Delhi’s lieutenant governor Anil Baijal (DDA comes under him) on August 13. DDA is in the process of compiling a list of land parcels that will be put on auction, starting with a pilot project in Rohini. The same model will then be followed in Dwarka and Narela.
DDA vice-chairman Tarun Kapoor said: “The idea is that DDA should gradually allow private developers or group housing societies to develop housing in the city. It will result in better quality of flats at competitive prices and meet housing needs. We plan to auction residential plots measuring 2-3 acres or 5,000 square metres or more. To begin with, we plan to auction 10-odd plots to assess the market response and gradually auction up to 50 or more plots.”
Experts and developers welcomed the plan but said a lot depends on the amount of land at DDA’S disposal and their location. At present, there is no figure for how much land DDA has — especially plots that can be offered for residential development. Rough estimates suggest the agency has 5,000 acres of land in the national capital but this includes commercial and ecological zones.
Delhi is woefully short of housing; most buyers end up buying houses in projects in Noida or Gurugram. DDA, too, hasn’t had much luck in selling houses in its own projects. In Narela, where the agency has invested ₹2,500-3,000 crore, almost 50% of flats auctioned in two rounds were returned by allottees as they were too small and the area lacked connectivity and economic opportunity. Both in 2014 and 2017 housing schemes, nearly 50% of the houses put on sale were returned by the allottees. In March this year, DDA put 18,000 flats on sale for a new housing scheme but sold only 8,438. If DDA’S new plan works, “we can also earmark housing plots in unplanned areas [under DDA’S jurisdiction] and put them up for auction in the future,” Kapoor added.
Thus far, DDA has either built flats on its own or allotted land to registered CGHS or individuals to meet the demand for housing in the city. It did not sell land to private developers for housing projects.
Subu R, commissioner (land disposal) at DDA, said: “Now, individuals, registered group housing societies, consortium, partnership firms, private developers can bid for the land parcels and construct housing units and sell it.”
He added: “We are planning to carry out the pilot project in Rohini and later implement it in Dwarka, Narela and other places where we have large land parcels earmarked for housing.”
The land-owning agency has not been able to meet the housing needs of the city despite undertaking large-scale housing projects in Narela, Dwarka and Rohini. While it has been allotting plots to individuals for the construction of houses, it hasn’t given any to CGHS after a fraud in the early 2000s.
According to a senior DDA official, who spoke on condition of anonymity, only one CGHS plot has been allotted on court orders since 2005. DDA has so far allotted 884 plots to cooperative group housing societies, this person added.
As per the policy drafted by DDA, private developers who are alloted land after auctions will be required to construct housing facilities in keeping with the Master Plan of Delhi, 2021, which earmarks 15% of the developed area for housing for people from the economically weaker sections (EWS).
“It is mandatory for the developer to complete the EWS portion and obtain an occupancy certificate for the same before getting the occupancy certificate for the remunerative portion. The developer will not be allowed to handover possession of non-ews flats to anyone before handing over EWS flats to DDA,” Subu said.
Private developers have welcomed the move and say it will provide for better quality housing, but are sceptical about the scale of projects which can be planned because the agency might not be able to offer large land parcels.
In Noida and Greater Noida, land for housing projects has been auctioned by the authorities since 2006.
In Gurugram, the role of the government has been more in terms of facilitation. Developers usually strike their own deals with landowners, using the services of land aggregators and offering prices close to market value.
Pankaj Bajaj, president of Confederation of Real Estate Developers’ Associations of India (CREDAI), National Capital Region, said: “This seems to be more of an ‘in-principle’ decision by the DDA. Earlier, they were allotting land parcels only to co-operative societies… Private builders will definitely give better quality. If land is allotted to private builders, Delhiites can look forward to superior quality housing and a more customer oriented buying experience.”
He added: “However, we don’t expect this decision to have an immediate impact. To our knowledge, DDA does not have a sizeable land bank for immediate allotment. Secondly, the time frame for this is also a question mark.”
(With inputs from Abhishek Behl in Gurugram)