Urban Land Monopoly

Urban Land Monopoly

7.6.42 Many cities have created development
agencies (like the DDA in Delhi) and handed over
control of all urban land within the municipal
jurisdiction to them in the belief that they would act
in the interests of the public. However, such
agencies tend to behave like the monopolies that
they are. It is in the interests of the monopolist to
restrict the development and sale of new land and
keep prices high, so as to maximise its own returns.
Introduction of a competitive construction boom
requires abolishing the monopoly of such agencies
over urban land by completely separating control
of land from its development.
7.6.43 There is a huge opportunity for leveraging
the large portfolios of unutilised and underutilised
real estate assets of various government agencies.
A conscious effort on the part of these agencies,
coupled with policy initiatives, can unlock the value
of these non-performing assets. Revenues generated
from such initiatives can be utilised for the
development of infrastructure.
7.6.44 Government staff housing : During British
rule, official bungalows were built in exclusive civil
lines for government officials. This practice was
perpetuated after Independence and a large volume
of government housing for functionaries ranging
from ministers and legislators to Class III and Class
IV employees, involving huge public expenditure
was developed during the past 50 years. In other
democracies such as the United States and United
Kingdom, there is usually an official residence for
the elected chief executive and all other officials
live in owned or rented houses. Many economists
have proposed that all government housing including
those in the Lutyens bungalows zone in Delhi
should be handed over to the private sector and
the resources generated be invested for productive
purposes.
7.6.45 Public-Private Partnerships : Private participation
in housing is giving way to the new mantra
of public-private partnerships. Under this, the
government acquires the land which is then
developed for residential/commercial use by the
private developer. One example is the ‘Bengal
Ambuja project’ in Kolkata, which is a joint venture
between the West Bengal Housing Board and the
Gujarat Ambuja Cement Group. The housing project
caters to the housing needs of various income
groups by building ‘low density high rise’ buildings.
7.6.46 Another example worth emulating is the
HUDA model of the Haryana Urban Development
Authority (HUDA) under which a number of
integrated cities have been developed through
public-private partnership (Annexure-7.6.2).
Gurgaon has emerged as the most successful of
these, with the country’s largest private sector
integrated township DLF City being established
there. Development of integrated townships would
mean development of residential, commercial,
corporate and institutional complexes, besides
provision of roads, power, water supply, waste
management, storm water drainage as also social
infrastructure – medical, community and education
facilities. A certain percentage of houses – around
10 per cent — in these townships can be reserved
for the economically weaker sections (EWS) and
low-income groups (LIG) at affordable rates.
Land Reforms
7.6.47 The present ceiling of 15 - 25 acres per
person on agricultural holdings comes in the way
of large-scale real estate development, especially
with the recent foreign direct investment (FDI) norms
making it mandatory for having at least 100 acres
of land for investment in integrated townships.
Therefore one has to under the existing law find
methods of circumventing this by first converting
agricultural land within the limit into urban land and
then again purchasing more land in order to meet
the 100-acre limit for FDI. This would only lead to
delays in projects. With the urban land ceiling
removed in most parts of the country, the agricultural
land holding ceiling with respect to land in the
periphery of towns needs to be looked into.Conversion of Rural Land to Urban Use
7.6.48 Conversion of rural land at market prices
should be completely de-controlled and left to the
market. At present, in Delhi, historical village land
situated within the city limits cannot be converted
to develop urban colonies. The presence of
‘urbanised villages’ in the middle of the capital city
is an anachronism and a testament to bad policy.
The curbs on the expansion of urban limits into
surrounding village areas should be removed.