Property Plus
Coimbatore
Housing: transforming parts of urban India into shining skyscrappers
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The recently announced National Urban Housing and Habitat Policy is centred on the theme of affordable housing, writes T. Ramachandran
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The National Urban Housing and Habitat Policy 2007 had been in the making for some time and its broad contours were generally known by the time it was formally unveiled in Parliament last month. For instance, the policy theme – affordable housing – was discussed in detail at a national conference that was organised in Mumbai in June last year. We now know more about the scope of the policy, going by the details that have been set
out. The Ministry of Urban Development has been projecting the issue of affordability even as the realty revolution has been gathering speed, transforming parts of urban India into shining skyscrapers, shopping malls, residential enclaves for the affluent classes and giant office complexes.
Fuelled to no small extent by foreign investment and the ongoing economic boom, what also shot up in the realty market were prices.
The prices of land and buildings soared phenomenally in many cities, dampening the hopes of millions of being able to ever own a home.
So, affordability would matter most to a large number of people living in urban India, especially those living in the fringes of our cities. "This policy seeks to assist the poorest of poor who cannot afford to pay the entire price of a house by providing them access to reasonably good housing on rental and ownership basis with suitable subsidisation," it states. What then are the big changes that the policy hopes to bring about to address this core issue?
The task is so huge that it is acknowledged right in the policy preamble the private sector, the cooperative sector, the industrial sector and the services/institutional sector have to play key roles in fulfilling the policy vision.
Implementation
And it is largely up to the State governments and local bodies to give shape to the policy measures for implementation at the local level. The policy states that the Centre in "consultation" with the State governments would "act as a ‘facilitator’ and ‘enabler’ with significant actionable steps being taken by State governments, urban local bodies, parastatals and private and cooperative sectors and non-government organisations."
The State governments have to take these steps at multiple levels - at the policy level by framing a State urban housing and policy if they have not already done so and at the regulatory level by the "adoption of critical urban reforms relating to municipal laws, building bylaws, simplification of legal and procedural frameworks, property title verification system and allied areas."
They would also have to create a framework for the optimal utilisation of land and promote public-private partnerships for its development.
The policy has come up with an urban development vision and the key areas for action listed include the following:
Land
Assembly of land for specified use as per the master plan will be done by observing the best norms of regional planning.
District plans and metropolitan plans will be prepared in compliance with the stipulations of the 74th Constitutional Amendment Act.
A special action plan will be prepared for urban slum dwellers.
Beneficiary-led housing development will be encouraged. Suitable percentage of land developed by the public sector will be provided at institutional rates to organisations such as cooperative group housing societies. A special package will also be worked out for labour housing. A secondary mortgage market will be promoted by the Reserve Bank of India (RBI)/ National Housing Board (NHB).
Residential Mortgage Based Securitisation (RMBS) will be nurtured through NHB (National Housing Bank), scheduled banks and housing finance corporations (HFCs).
A model rent Act will be prepared by the Centre to promote rental housing on the principle that the rent of a housing unit should be fixed by mutual agreement between the landlord and the tenant for a stipulated lease period.
Incentives will be provided for encouraging lending by financial institutions, HFCs and banks for rental housing. Also, companies and employers will be encouraged to invest in the construction of rental housing for their employees.
The feasibility of a National Shelter Fund, to be set up under the control of the NHB, for providing subsidy support to economically weaker section/low-income group housing, will be examined in consultation with Ministry of Finance.
Reforms
Model guidelines will be developed by the Centre for use by States/Union Territories for regulation of land supply, to reduce speculation in land and haphazard development in urban areas and along inter-city transport corridors.
All States will be encouraged to refine/enact a Town and Country Planning Act in order to promote regional planning at the State/Union Territory level.
The adoption of the model municipal law would be encouraged.
States that have not already repealed the Urban Land Ceiling Act will be encouraged to do so.
Stamp duty reforms should be initiated to bring the incidence of duty in all States/ Union Territories at a par.
Property tax reform based on the unit area method will be encouraged in all States/ Union Territories and urban local bodies. States will be encouraged to adopt the Model Cooperative Housing Act.
States/ Union Territories will be encouraged to enact Apartment Ownership Acts.
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