Higher floor area ratio in Haryana will not give market a leg-up
There may be valid political and sociological reasons for increasing the Floor Area Ratio (FAR) in HUDA‘s colonies in Haryana’s new emerging towns, but only a blind leap of faith can justify the conclusion that this move will help pull the property market out of recession. Logic indicates otherwise.
FAR is the ratio of a building’s total floor area (gross floor area) to the size of the plot of land upon which the house is built. In a decision announced recently, the Town and Country Planning Department said that home owners would be allowed to ‘purchase’ space over and above the existing permissible limits.
This step has been taken because as families expand people need more space. So, there was demand all over the state for permission to add to the covered area. While this will meet a crying social need and conserve land, a very scarce resource, the flip side is that it will lead to more congestion and a greater strain on services like water, power, roads, parking and ultimately, damage the environment further.
The purchasable FAR facility would be applicable only to ‘licensed colonies’ and HUDA sectors. FAR for 3, 4, 6 and 10 marla houses will now be 2 while for 14 marla, 1 kanal and 2-kanal houses, it would be 1.8. What this will imply, for example, is that for a 100 square metre plot, an owner who was allowed to build up to 165 sq m can now go up to 200 sq m. The rate to be charged for the increased FAR varies from Rs 45 to Rs 750 per sq ft depending on commercial factors.
The revenue generated through purchasable FAR will, it is intended, go to the municipal authorities or HUDA for development work in the concerned areas. One presumes that would mean infrastructure development or provide more services to deal with the increased density of population. That is the theory behind the change. Where that money actually goes, how it is spent and when, are altogether different questions, as past experience has shown. It is quite possible that we may end up with only increased congestion and nothing to mitigate its adverse impact.
FAR and ground coverage norms for the residential plots followed by the Department of Town and Country Planning were fixed way back in 1977. Now the group housing societies, too, want this concession. One hopes that they realize what the consequences could be and would be prepared to live with them.
Some realtors have been quoted in the media as saying that this step would “help bring back boom in the property market.” That appears to be a pipedream. This market is currently going through the mother of all slumps primarily because there are thousands of constructed houses and apartments lying vacant for lack of demand, all over Haryana. And projects in ‘progress’ have are being delayed because the builders, too, have a large inventory of unsold housing and their cash flow has dried up. So, how by expanding the capacity of the existing housing will the demand for new space get a boost? On the contrary, a person who would otherwise have had to buy and move to a new, bigger apartment, will now simply add more space to his existing accommodation and stay put wherever he is. The potential demand for the existing unutilized capacity in this sector, or for new houses will shrink correspondingly.