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Unhappy over the final regulation on earmarking housing for economically weaker sections (EWS), published by the Urban Development Department recently, the Bengaluru chapter of Confederation of Real Estate Developers’ Associations of India (CREDAI) has approached the High Court and got a stay order on the implementation of the new regulation.
With this, the regulation is bound to be left at cold storage till the court resolves the dispute. The High Court in its interim order dated March 30th 2015 has directed the State government and the Town Planning Director to sanction building plans without referring to the EWS housing final notification.
The government introduced EWS housing regulation on January 30th 2015, making it mandatory to earmark 10-15 per cent of land or floor area in all the private and public housing projects, for the Economically Weaker Section and Low Income Groups. Citizen Matters had published a detailed report on the loopholes in the regulation, pointing at how the regulation lacked clarity on important aspects.
In the writ petition filed by CREDAI Bengaluru and Zonasha Estates and Projects, the petitioners have contended that the regulation, if implemented, will cause huge loss to the builders and escalate the cost of construction which the EWS/LIG may not be able to bear. Cost of maintenance of the residential complex too will be on the higher side which the beneficiaries may not be able to pay.
Terming the regulation as arbitrary and unreasonable, the petitioners have pleaded that it has been drafted in violation of Article 14 of the Indian Constitution (equality before law). They have also accused the State government of unilaterally depriving the rights of private individuals in dealing with their own property. With the issue now having reached the doorsteps of the court, the government has nobody to blame for but itself for the sequence of events.
Government unaware of the stay
However, the Urban Development Department is apparently unaware of it. When asked, Urban Development Department Secretary T K Anil Kumar claimed that he was not aware of CREDAI moving to the Court and getting a stay order. “We will think about our next step once we get the court order copy,” he said.
Meanwhile, CREDAI office-bearers refused to comment on the matter.
Apartment-dwellers see loopholes in regulation
Following the controversy over EWS Regulation, Citizen Matters got reactions from the public on the concept of accommodating urban poor in posh residential buildings and here is what they had to say.
Even as he favours affordable housing, Sanjay Vijayaraghavan, a resident of Marathahalli, foresees a lot of challenges in the EWS regulation in its current form. “Houses may be given to poor in an apartment for a subsidised rate, but what about the facilities? Will they be able to pay maintenance charge of the complex including water metering which may be hiked once in a while. A hike may hit LIG person hard,” he said.
He also felt that in the process, income disparity will add to the already existing complexity when it comes to apartment administration. Priorities of LIG and EWS could be very different from a high income group person, he said.
Anandroop Bhattacharya, a resident of HSR Layout too echoed Sanjay’s opinion. “Enforcement of the rule should be limited to the allotment of units in an apartment complex/gated community. Thereafter, when it comes to maintenance, it should be uniform across all owners irrespective of income groups,” he said.
Builders had objected to draft regulation
Documents available with Citizen Matters show that soon after the publication of draft, Confederation of Real Estate Developers’ Association of India (CREDAI) and two real estate companies, namely Puravankara Projects and RMZ Corp had filed objections to the draft notification. The objection was towards entire regulation, stating that it will not serve any purpose at a time when price of land is skyrocketing. Price of the house and maintenance will be expensive in a larger residential complex with several amenities, thus posing a challenge to the EWS housing, they had contended.
Apart from raising concern over imposing additional fee, the builders had also questioned the practicality of the provision to provide housing to EWS within three kilometres radius of the project site.
Builders, in their objection, had stated that to manage the additional expenditure and loss incurred to them due to earmarking sites for poor, they will have to pass on additional charges incurred to the ultimate buyers, which may result in escalating price of plots and houses beyond the reach of ordinary buyers. They had also made a direct allegation on the government of implementing the scheme only to appease the Central government and obtain funds under JNNURM. The builders had also raised concern over the scheme causing social problems due to mixing of different classes of people.
The Urban Development Department (UDD) did not seem to have addressed the challenges raised by builders. The regulation is silent on various issues like selection of beneficiaries, pricing of EWS plots, whether the housing has to be provided to EWS on site, etc.
Impact Fee and Shelter Fee don’t make it to final notification
A detailed look at the differences between the draft regulation (published on March 18th 2011) and the final notification clearly shows that the regulation was framed in a hurry. While the draft published four years ago was comprehensive with reference to various aspects like cross subsidisation, selection of beneficiaries etc, the final one does not address these points..
The draft had included concepts like Impact Fee and Shelter Fee. Shelter Fee is imposed in cases where reservation of land to provide housing to EWS is technically not possible. According to the draft, Shelter Fee is an amount equal to the market value of land or floor area.
For example, in case of residential layouts, land should be reserved for poor only if the proposed layout is above 4,000 sq meters, whereas Shelter Fee is collected from all single plot layouts above 1,000 sq meters area. Similarly in case of approving building plans, Shelter Fee was to be collected from any residential building of single family occupation if the plot area is above 500 sq mt.
Impact Fee was to be collected from the builder in non-residential projects. The fee thus collected from the builders could have brought an additional revenue to the government, which according to the draft, the Department had planned to use for providing housing benefit to poor.
The draft had also made a mention of the authorities maintaining an inventory of all the plots and houses reserved for EWS and LIG and ensure its protection from encroachment. On the selection of beneficiaries, the draft had stated “the procedure for selection of eligible persons and the determination of the cost of such plots or houses shall be such as may be prescribed by the Government.”
With many such aspects missing, the notification does not seem to serve the purpose.