Get real with realty
The Ministry of Urban Development’s proposal to establish a regulator for the real estate industry in Delhi is a welcome one, but it seems to raise more questions than it answers.india Updated: Jun 28, 2007 23:54 IST
The Ministry of Urban Development’s proposal to establish a regulator for the real estate industry in Delhi is a welcome one, but it seems to raise more questions than it answers. The ministry should ordinarily concern itself with the country as a whole, but that does not often seem to be the case. Be it the sealing of unauthorised constructions or apartment prices in the capital, the Centre ends up intervening too often on a subject that is largely the domain of the states. But the desire to ensure that real estate developers do not cheat buyers is to be lauded. Given the alarming forecasts on growing urbanisation, and the mushrooming of what we could call the ‘apartment culture’, the government should formulate a law that takes into account urban needs across the country.
The proposed regulator is expected to ensure that housing complexes have adequate playgrounds, parking space and other infrastructure facilities. That sounds good on paper, but apartment blocks are gated communities with their own economics and organisation. Just how much can a state-run regulator intervene in market activity? Even the Delhi Development Authority, which makes master plans, and bodies like the Delhi Urban Arts Commission, have not been able to manage effectively public spaces directly under State control. On the other hand, an apartment is a product being sold by the builder, and buyers need protection and safeguards in line with their rights as consumers. The hard realities of builders overcharging for facilities, delaying projects or short-changing on quality or features need to be addressed.
To the extent that the planned regulator will address these concerns, the proposed law would make sense. And if it indeed does, the ministry would do better to recommend the provisions for the nation. A legitimate fear is that the regulator may end up becoming a micro-level planner, and, as a State agency, may bring with it concerns of possible corruption. Regulation in a free market is better done by guidelines than by diktats. Most important, real estate regulation should not be a backdoor to bring back some of the terrible practices of the waning licence-permit raj.