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New homes for old ones

Redevelopment could be the solution to the shortfall of four lakh houses in Delhi, says Vandana Ramnani

realestate Updated: Mar 14, 2013 17:10 IST
Vandana Ramnani
Vandana Ramnani

You’ve heard of carpooling, but property pooling could be the new buzzword when the Master Plan of Delhi 2021 (MPD) comes into play. It offers people with plots the option of pooling properties to build smarter, taller, and more manageable units with commercial spaces thrown in. You could even get a pool on your terrace! The idea is to set up a small gated community right in the heart of the Capital.

The MPD has the provision for the cluster block approach which allows existing plot owners to collectively pool in their individual properties and redevelop them into apartments with better amenities and greater FAR (floor area ratio). People can unlock the “hidden wealth” of their land by making optimal use of the redevelopment guidelines as mentioned in the MPD.
The MPD has provisions to encourage redevelopment through private participation of single units or through amalgamation. The cluster block approach allows existing plot owners to collectively pool in their properties to arrive at the magic number of 3000 sq m, the minimum plot size. This can be reorganised to provide a minimum 30% area as common green/soft parking besides circulation areas and common facilities.

There are incentives too. “To incentivise and redevelop a maximum overall FAR of 50% cent over and above existing permissible FAR on individual plots will be allowed subject to a maximum of 400. Higher FAR shall not be permissible in redevelopment of Lutyens Bungalow Zone, Civil Lines bungalows areas and monument regulated zone,” the plan states.

Incentivised redevelopment will be allowed in unauthorised (now regularised) colonies, urban villages (land dora land) and developed areas where large contiguous plots are available – places which may allow for easy aggregation of 3000 sq m land parcels.

“A fair percentage of housing demand within the city can be met by the redevelopment opportunity. Owners of plots can even share revenue that comes out of the commercial space below the apartments. They can also have a swimming pool on the terrace,” says Gurpreet Singh, a practicing architect and a concerned citizen of the Capital.

Under the policy, commercial rationalisation is in the hands of the plot owners. They can enhance their space or shrink it if their needs are less, say if their children are abroad. They can both buy floor area ratio and sell it depending on space requirements. They can also decide on the one time sale of commercial property or the rental income model. Plans factoring in all their needs would have to be submitted to the MCD. With the additional height incentive they can introduce features such as a terrace garden or a swimming pool on the roof.

Bridging the housing gap

According to Ramesh Menon of Certes Realty, with FAR being increased to 50%, it can be safely assumed that the number of housing units can go up by 25% to 35% within Delhi. With the current shortfall at around four lakh units, the gap can be bridged by harnessing the redevelopment opportunity.

Where the cluster approach is concerned, at least one lakh units can be redeveloped in areas that came up in the 1970s. In villages (there are 227 rural villages and 135 urbanised ones), the supply can go up by as much as 50%. This can help stabilise prices as at least one lakh units can be created in such areas.

Unauthorised colonies cover approximately 20,000 acres. This has potential to create an additional supply of at least two lakh units, in case the colonies authorised now are redeveloped.

Redevelopment will have a major impact on newly authorised colonies adjacent to Rohini, adjoining Dwarka, Najafgarh, near Chattarpur, areas near Badarpur and in and around Pandav Nagar in east Delhi.

How is incentivised redevelopment different from the new development in the exclusive bungalow zones of south Delhi where scores of apartments are coming up? For the latter, structures are rebuilt as low-rise apartments on plots, but there is no change in FSI. In their case, consolidation of plots may or may not be involved. Under the new Master Plan, one will end up getting 50% additional FAR and some commercial and community usage as incentives for redevelopment.

Effect on prices

Some realty experts are of the view that redevelopment could lead to stabilisation and even correction in residential prices in the NCR.

DDA apartments cost anything from R8000 per sq ft to R10,000 per sq ft. If one were to exercise the redevelopment opportunity judiciously, one can get a product for just R2500 per sq ft in the newly authorised colonies.
Also, while there could be rationalisation of prices, the impact will be marginal of up to 10% to 15%. Potential is limited to 50% of FAR. Expecting too much of price increase or decrease may not be possible.

The challenges

Urban planners say that while redevelopment is healthy, it could have limited impact in generating new housing supply within Delhi.

The biggest challenge will be to get land use changed from residential to group housing and implementing the policy. A nodal agency may be required to evaluate the schemes, not the regular engineers.

Redeveloping unauthorised colonies can pose a big challenge as these areas have very little public land for schools, parks etc. “One needs to find space for infrastructure facilities to make the area worthy of redevelopment,” says Singh. Villages are the biggest challenge as they have decayed beyond a point of no return. “The policy should work if marginal flexibility with regard to the size of plots in allowed. Areas such as Tilak Nagar, Malviya Nagar, old DLF colonies such as Rajouri Garden etc will benefit immensely from this policy,” Singh adds.

According to Sudhir Vohra, architect, the policy cannot kick start supply because it needs consensus among stakeholders. It may not lead to substantial increase in supply because there are very few pockets where redevelopment can take place. Also, those who may buy property in the recently authorised areas are people who generally do not care too much about a clear title. These areas also suffer from perception issues and the return on investment there may not more than 1% to 1.5%. As far as urban villages are concerned, they have more of irregular supply and may not bring about a substantial change to the supply side.

First Published: Mar 13, 2013 15:52 IST