Land is a scarce resource and it is almost impossible to find a plot at a reasonable price in the city

Last week, this correspondent received many queries regarding Tamil Nadu Housing Board (TNHB) joining hands with private builders to construct apartments at K.K Nagar. Most of them wanted to know whether the Housing Board, through this project, would provide them affordable houses, and if they could apply for it. While it was easy to answer the second part of the question, the first one was difficult, because the answer would disappoint many.

Anyone who meets the eligibility criteria of TNHB can apply for an allotment — that is the easy part. Would the dream of owning a house in the city be fulfilled? Would the Housing Board function as a public distribution system and provide them with houses, which are beyond their reach in the private market? The answer — going by what has been disclosed so far — is a disappointing no.

The plan of the TNHB, it appears, is to monetize the K.K. Nagar land and others elsewhere. It has set a base price of Rs. 210 crore for about 68 grounds or 3.73 acres it owns at K.K. Nagar and expects private builders to outbid this price. Under such a commercial arrangement, it is most unlikely that the houses would be below the prevailing market rates.

Land is a scarce resource and it is almost impossible to find a plot at a reasonable price within the city. Instead of looking at ways to build cheaper houses, TNHB wants to behave like a private real estate company — monetize the land which it forcibly acquired with a promise to serve the public. It has also introduced a new category called super high income group and plans to cater to them.

This is not how other State governments approach the housing issue in general and public-private partnership in particular. Let us look at Rajasthan's policy for example. Unlike Tamil Nadu, the government of Rajasthan has moved many steps ahead and spelt out a state level housing policy. It has outlined five models for developing housing units. One among them is the public-private partnership (PPP) to build houses on government-owned land.

The criteria used to select private builders in the Rajasthan model is not the maximum amount of money a developer pays for the land, but the maximum number of lower income group units the developer can deliver free to the government. The aim is to get 80 per cent of the houses constructed through a joint venture, for the needy. They also ensure that commercial use in such building complexes is limited to just 10 per cent of built-up area and the property is optimised for housing.

In order to make the property affordable for buyers, the Rajasthan government has reduced stamp duty for registering houses for the EWS (economically weaker section) to a nominal Rs.10 and for LIG houses to Rs. 25. In addition, it also offers a host of other subsidies. The delays are avoided and cost escalations are kept under control by offering incentives to developers. The idea is to provide quality housing at a reasonably low price.

This is clearly a people-first policy and not a fill-the-coffer approach as followed by TNHB. If TNHB does not learn from states like Rajasthan and continues on its present course, it will soon end up like the Maharashtra Housing and Development Authority. The MHADA unwisely used its land bank, became land-starved and eventually could not do what it was meant to do — provide affordable housing.

The investor-types are well served by the private market, the State alone can help the needy user. If the TNHB has the will and shows the commitment, Chennaiites can dream, yet again, of affordable houses in a reasonably good locality.

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