The value fixed by Government is Rs. 500 a sq ft while the market value is Rs. 400

It was with a high hope to shore up its finances that Tamil Nadu Housing Board (TNHB) in Erode unveiled its latest scheme of individual house ownership at Muthampalayam in the city limits under three categories: for high, medium and low income groups.

The hope stemmed from the location of the property at just 3km away from the Railway Station and 4km from the bus stand. However, the TNHB finds the response to be thoroughly disappointing.

Thirty nine applications were sold, but, finally, there was only one registration for an LIG house under the ‘self-finance scheme’ wherein the TNHB would receive funding in instalments from the prospective buyers.

The property at Muthampalayam was sought to be developed in two phases: construction of 115 houses in phase I and 12 houses in the second. Under Phase-1 of the scheme, a 722 sq ft HIG house on a plot area of 2,325 sq ft costs Rs. 39.86 lakh, a 535 MIG house on 1,453 sq ft plot is valued at Rs. 27.65 lakh, and a 383 sq ft LIG house on a 775 sq ft plot costs Rs. 15.04 lakh. Under Phase — II, the price of HIG and LIG houses on same plot areas were quoted as Rs. 40.88 lakh and Rs. 15.36 lakh respectively.

The ‘self-finance scheme’ entails the buyer to remit 5 per cent of the house cost as advance, 5 per cent within 21 days of allotment, and 25 per cent at the time of commencement of work. Thereafter, 25 per cent, 20 per cent, and 15 per cent of the house cost has to be paid in gaps of three months. The final 5 per cent of the amount has to be paid at the time of taking delivery of the fully constructed house.

The apparent reason for the dull response despite the TNHB inviting applications under the scheme for the second time over a monthlong period until September 12, after it drew a blank in the first exercise a month earlier, is that the guideline value fixed by the Government for the land is more than the market value. While the market value is Rs. 400 a sq ft, the guideline value fixed by the Government is Rs. 500, an official source acknowledged. The TNHB is required to follow the norm that whatever is highest should be decided as cost of the land.

Also, the amounts specified for the houses are only tentative. According to the set of instructions the TNHB has given to the customers, the actual cost would be determined prior to the start of construction work. As a matter of policy, the TNHB is learnt to have decided not to sell its property as plots henceforth. The self-finance-scheme would, most likely, be dropped, a senior official indicated.

However, the TNHB has sought the Government’s approval to sell the unsold plots developed under the previous schemes at market rate. The TNHB that finds itself in dire need of money hopes to monetise on the 445 plots and 56 houses in the areas it has developed across the district including Sathyamangalam and Perundurai.