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Haryana govt gives nod to Affordable Housing Policy 2013

No Comments Sub Category:Miscellaneous,Real Estate Posted On: Aug 09, 2013

Affordable housingOn a measure to promote the availability of affordable residential units to the lower and middle class homeless population, the Haryana government has given approval to its “Affordable Housing Policy 2013” on 6th August.

Project plan

The government has planned to develop 1.25 lakh affordable housing units for the lower and lower-middle class population under the new policy. The units will be developed in plots ranging between 5-10 acres in the urban centres of Haryana and the size of the units would range between 28 sq m to 60 sq m carpet area. The project development work will be handed over to private developers by the government.

Allotment process

The affordable housing units will be allotted through draw of lots which will be handled by the Deputy Commissioner of the district in which the unit is located.

License system

The state government will be issuing licenses to private developers to develop group housing projects, but with a set of conditions- the size and price for the flats, along with the deadline to complete the project, will be fixed by the government.

The licenses to the developers will be issued on a first-come-first-served basis and a prior condition will be held as per which, the project should be ready within four years after getting approvals for the building plans and environmental clearance. The developers will have to furnish bank guarantee even before projects are given to them for development. The guarantee seeked by the developers would be 15 percent of the total realization from the project for areas falling in Gurgaon, Faridabad, Panchkula, Panchkula Extension and Pinjore-Kalka and 10 percent for all other towns.

Price factor

The government has already approved the maximum allotment rates for the affordable units, based on their location. The cost fixed for units is Rs 4,000 per sq ft of carpet area in the development plans of Gurgaon, Panchkula, Faridabad and Pinjore-Kalka, while it is Rs 3,600 per sq ft in the development plans of other high and medium potential towns. The remaining towns with low potential will be priced Rs 3,000 per sq ft of carpet area.

Incentives to developers

The policy looks to make use of the private sector’s capital investment for the development of affordable homes. The policy envisages to provide incentives to the private developers which includes-
1. exemption from licence fees and infrastructure development charges
2. permitting higher floor area ratio (FAR) of upto 225 against 175 which is usually permitted in group housing projects
3. permitting higher ground coverage to the tune of 50 percent against 35 percent that is normally allowed.

Eligibility criteria

According to the new affordable housing policy of Haryana, anyone who doesn’€™t own a plot or a house or a flat in any colony of Haryana Urban Development Authority (HUDA), any licenced colony of Chandigarh or the NCR, is considered to be eligible for the scheme.

Concerns

With the approval of the new policy, flats around 500 sq ft will be made available at a price ranging between Rs 15 to 20 lakh based on the potential of towns in Haryana. It is a good move of the state government to make residential units available at this price range, but the question here is- whether these affordable housing units will reach the buyers which they are meant for?

As per the plan, the 1.25 lakh affordable units will provide shelter to about 6 lakh homeless population. But the policy seems to lack proper measures for the verification of buyers to whom the units would be allotted. The benefits have to be passed on only to the intended beneficiaries through a transparent mechanism and stringent measures should be followed in order to eliminate all possible manipulations. There should be a fair play in allotting the units to the homeless population and only then the new policy will be a success in true terms.

Eligibility not well-defined: The eligibility criteria defined in the policy stops the allottees or their family members from owning any government allotted unit in urban areas in Haryana. But what about those who have invested in illegal colonies? Will a person owning one or more houses in unauthorised colonies be allowed to apply for these affordable units?

No subsidy: The government has not mentioned about giving any subsidy to the buyers which means the ‘urban poor’ who are not in a state to afford houses in Rs 5 lakh to 20 lakh range cannot be able to own an affordable unit and therefore, the policy fails in providing home to such people.

Developers’ concern: Though developers would be given certain incentives, they will have to earmark 10-15 percent of money as bank guarantee, which might make them lose interest in such projects.

Operation and Maintenance (O&M): It is stated that the developer will have to maintain the project free of cost for five years, after which a resident association takes over. It is a serious issue with affordable projects that needs to be defined in a better way to get a clear solution.

 

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