Haryana housing policy attracts developers
Haryana’s new ‘Affordable Housing Policy-2013’ appears to be favorable to real estate developers even when the sector is moving at a snail’s pace.
The new policy has been getting very good response from the builders’ community as 90 of them have already shown interest in the policy that was approved by the Haryana government on 6th August 2013.
Builders’ showing interest
The developers are stepping forward to construct affordable housing projects across various places in the state. The state government has announced that it will be issuing licenses to the developers on a first-come-first-served basis. As of now, 52 developers have applied for license under the policy, 16 developers have applied in Sohna, 10 developers have applied in Faridabad, three developers each in Jhajjar, Palwal and Rewari, two in Karnal and one in Nilokheri.
The developers who have applied for licences under the policy also include major realty players such as DLF, Raheja Developers, Emaar MGF and Suncity Projects.
Incentive scheme attracts developers
The policy envisages to provide incentives to the private developers which is attracting more and more builders to come up with affordable projects in the state. The incentives include exemption from licence fees and infrastructure development charges, permitting higher floor area ratio (FAR) of upto 225 against 175, permitting higher ground coverage to the tune of 50 percent against 35 percent that is normally allowed.
Allotment rates
Apart from the incentives that are being offered, another important factor attracting developers is the allotment rates set by the government for the affordable units. The cost of the housing units is different for different locations based on their potential levels. The government has set a maximum allotment rate of Rs 4,000 per sq ft of carpet area for 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 and the units in low potential towns will be priced Rs 3,000 per sq ft of carpet area.
However, realty experts opine that the prices fixed for urban areas will make it difficult for a common man in the urban areas to own a house. They said that the builders are accepting the policy only because they are attracted at the incentives that have been offered with the policy. Though builders seem to be happy with the policy, the buyers and investors are protesting against the additional benefits being offered by the government to the developers through this policy. Rather than aiming to benefit the urban poor population, the government is giving more prominence to the builders, claim end-users.
State government policies on Affordable Housing
In general, any state government should be aimed towards ensuring suitable flow of financial resources to potential beneficiaries, promoting well-designed Public-Private Partnerships for undertaking housing and infrastructure projects, preparing and updating Master Plans, Zonal Plans, Metropolitan Plans, District Plans and Regional Plans by respective agencies with provision of adequate land for urban poor, and so on. But ironically, the Haryana government is looking to favor builders instead of poor buyers, which is annoying the buyer community.
Affordable housing policy more ‘builder-friendly’
The Affordable Housing Policy-2013 seems to be more ‘builder-friendly’ as 101 developers have expressed interest in building affordable projects across the state so far. Not only the prices offered to the builders are attractive, but also the slew of incentives that comes along would give them a bonanza.
The policy seems to make affordable housing out of common man’s reach in major cities of the state. The allotment rates set for the housing units as per per the policy are beneficial to builders and are likely to make the housing units unaffordable to buyers.
Market experts are of the opinion that the policy would also turn beneficial to the upcoming parliamentary and state Assembly elections.
Even at a time when, real estate market is lying low and launches have largely reduced, the new policy has been receiving tremendous response from the builders’ lobby. Gurgaon alone has received 55 projects by builders for developing affordable housing projects.
