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Journalism of Courage
Grappling with high land prices that come in the way of providing affordable housing for millions in urban areas,the UPA government is now considering providing state-owned land to private players at a pre-determined price with certain riders.
The concept paper for such a reverse tendering plan is being formalised by the housing and urban poverty alleviation ministry. According to the concept note,land will be provided at a pre-determined price and expressions of interest will be invited from the private sector for building houses at the lowest possible price on the land.
While the ministry will issue broad guidelines,individual tenders will define the type and specifications for each housing project.
The common thread in our discussions with various stakeholders was the high prices of land which discouraged developers from launching low-cost housing projects. Through this model,the land price can be pre-determined and housing market can also be regulated, said a government official. The model will be developed by the housing ministry and the states may then adopt it and implement.
Reverse tendering should be adopted to make land available. It will address housing shortage in economically weaker section (EWS),lower and middle income group, the official said.
The ministrys initiative has found favour with realty experts,who have long blamed the spiralling land prices as the reason for the burgeoning shortage of affordable housing in urban areas.
This step is in the right direction to overcome housing problems of urban India. Earlier government has dabbled with various models like reserving certain percentage for EWS housing in residential projects,allowing greater Floor Space Index and rental housing; all of which did not take off as per expectations, said Abhishek Kiran Gupta,associate director,Research & REIS (Real Estate Intelligence Services) of realty consultancy JLL-Meghraj. However,the responsibility of providing basic infrastructure services like schools and retail spaces at these sites should be fixed,he added.
The reverse tendering model will be more reliable and credible than the open auctioning which is held by state housing boards or development authorities for selling land. Instead of letting the speculative element take over and raise land prices artificially,the reverse tendering will help in price monitoring as well, said the official.
Recently,the countrys highest ever land auction of Rs 5,006 crore by the Noida development authority fell flat on its face when the real estate company BPTP had to withdraw from the project due to a liquidity crunch. Land deals in Mumbai also met with a similar fate when developers later surrendered the land won at auctions by state authorities at high prices.
