Indian Real Estate Needs a Regulator ,and More..!

Artificial Scarcity of Urban Land Must Go..!

Reports say that a Union Cabinet nod for the Indian real estate regulator Bill, pending in Parliament since 2009, is likely soon.

But, the proposed regulator would be on a thoroughly weak foundation given continuing opacity in the market for urban land & housing.

The fact is that for decades, we have chronically underinvested in our Indian cities and there is now a massive backlog for dwelling units, even as Indias urban population is projected to soar to 59 Crore by 2030,up from 34 Crore in 2008.

Housing Shortage Artificially Created..!

It is plain that the housing shortage is wholly artificially created, with opaque time consuming approval processes that greatly encourage rent seeking, corruption &  black money.

And given the massive policy challenge to boost supply of urban infrastructure & housing, the way ahead is to reform the entire real estate sector & proactively bring about transparency in the umpteen approvals and clearances required for built spaces.

Otherwise, we face the real prospect of urban decay, poor quality of life & myriad other ills. In parallel, there is the pressing need to reform political funding too, as one motivation for the black money & kickbacks involved in garnering the many approvals required for housing projects is mobilising political funding.

Uniform Norms..!

The regulator would need to be decentralised but have uniform norms to define concepts such as  carpet area,sweeping away nebulous notions like super area.

Private developers / promoters would not be able to advertise or / start projects before getting all necessary approvals, and the funds collected from buyers would be kept in escrow accounts (so that developers do not use them for buying land for other projects, thus delaying construction).

In tandem, we need clear-cut norms for changing land-use criteria to purposefully shore up urban housing.

Instead of lowly and rigidly-interpreted floor-area ratios in the cities, we need to step up vital support systems such as drainage and sewage to build more floors vertically,to make our urban centres compact and modern.

From ET EDIT PAGE

Share: