DDA takes a backseat

Vinod Behl

In  a major shift from its earlier policy of developing housing, Delhi Development Authority (DDA) has amended its policy under which it has tasked private builders to develop housing in the Capital while the  agency will play the role of a facilitator.

According to the new policy, private developers can buy DDA’s plots and develop group housing projects on them. The amended policy allows individuals, partnership firms, private and public limited companies and consortium with sufficient funds to purchase the land and develop it. The owner will be allowed to develop group housing in accordance with Delhi Master Plan 2021, leaving out 15 per cent Floor Area Ratio (FAR)  for community service personnel and economically weaker sections.

DDA has a fairly large land bank to undertake housing development. It  owns 5,000 acres in Delhi. Moreover, another 4,452 hectares have been registered by DDA under the new Land Pooling Policy till the first week of August 2019. In fact, land pooling policy is also a major initiative to involve private developers in constructing housing in Delhi under which the Capital will get 17 lakh houses, including 5 lakh EWS units, to accomodate 76 lakh people, covering urban extensions of 95 villages. 

Under the policy, while development agencies will undertake infrastructure development like roads, schools, hospitals, community centres, sports facilities on pooled land, a portion of it will be returned to land owners for executing housing projects with the help of private builders.

Making way for change

All these years DDA had  a monopoly over housing development but of late its homes have lost their attraction. And now it is more out of compulsion that the authority is seeking to involve private  developers in building while taking a back seat as a facilitator. This is clearly evident from the failure of DDA’s housing schemes in 2014 and 2017. 

In the 2014 scheme, as many as 8,000 allottees  had returned their flats, while in the 2017 scheme, 3,000 allottees (almost 25 per cent of the total) returned their flats due to poorly designed low quality “pigeon hole” homes lacking basic civic amenities.

While there have been no takers for DDA homes, home buyers have been simply lapping up homes built by private developers. These  are lifestyle homes with best of amenities and contemporary designs, making efficient use of space, thereby increasing affordability. 

Though DDA has not yet come out with full details of the policy, the question is if this new housing  policy will turn out to be a saviour for it.

Cautious optimism

Private developers have expressed cautious optimism about it. As Praveen Jain of Tulip Group and Vice Chairman of Naredco, puts it, “This policy is flawed because it talks of land auctioning to developers, which can have disastrous results. DDA should adopt the successful Haryana model of not auctioning land and fixing price for affordable residential units”. 

Pradeep Aggarwal, Founder & Chairman Signature Group & Chairman, Assocham National Council on Real Estate, endorses, “At a time  when we need to give boost to affordable housing to meet the goal of  ‘Housing for All’, this auction model will defeat the purpose".

Mohit Goel, CEO, Omaxe Group, however, opines that the DDA should have left housing  development to private developers long back to push housing supply, especially when in NCR 95 per cent of housing development was being done by private developers. Under this new policy, DDA should make norms for eligibility of developers (with good track record  of construction and delivery) to participate in land auction. Amit Modi, Director, ABA Corp & President Elect Credai Western UP questions  the business viability of this policy adding that auction will push up land cost, making affordable housing under PMAY non-feasible.

Acting as a facilitator

According to Tarun Kapoor, Vice-Chairman, DDA, the new policy is the result of development agency’s reduced focus on the construction of flats. “We would rather focus on auctioning of land and get the private sector to build flats. We  will play the role of a facilitator”, he said.