LAND PROCUREMENT FOR LOW INCOME HOUSING

CASE STUDY OF MAHARASHTRA STATE

Prakash M. Apte

INTRODUCTION

The state of Maharashtra ranks highest in India in quantum as well as proportion of Urban to the total population. The rate of economic and industrial growth is higher than most other states and so is the per capita income. But the housing activity in public and private sector has not kept pace with this growth.

MAP OF INDIA SHOWING STATE OF MAHARASHTRA

Land is an important and basic resource for housing. Various Laws or Acts like, the Urban Land (Ceiling and Regulation) Act, 1976 (ULC), Maharashtra Housing and Area Development Act 1976 (MHADA Act), Bombay Metropolitan Region Development Authority Act 1974 (BMRDA), Mahrashtra Regional and Town Planning Act 1966 (MRTP Act), etc. in force in the state do have provisions to facilitate availability of land for public housing.

But what has been the real impact of all these legislations in making land available for housing? Have these legislations helped or have in fact become hurdles to the land becoming available in the open market? Why has the availability of land for housing not kept pace with the requirements? What ails the land procurement efforts of the private and public housing agencies?

Tis study was undertaken to find answers to these questions and identify the problems, and suggest some strategies for the future. Such strategies, though with specific reference to Maharashtra, might be applicable to other states as well which have similar developmental problems.

OBJECTIVES OF THE STUDY

  1. To highlight aspects of present legislation affecting land procurement for housing;
  1. To assess their effectiveness in actual procurement of land;
  1. To identify specific problems of public authorities in procurement of land;
  1. To assess the extent of interface achieved between socio-political philosophy and implementation of policies of land procurement;
  1. To suggest improvement in the land procurement policies and;
  1. To suggest innovations that may help increase availability of serviced land for housing.

MAHARASHTRA STATE :A STATUS REPORT

Maharashtra ranks third in India in terms of area and population. It ranks first in terms of quantum of urban population and its percentage to total population. The rate of growth of urban areas in the state is also higher as compared to many other states in the country. Its per capita income is higher than the country’s average. It is considered to be one of the most progressive states in the country. The proportion of Urban to total population in the state is 37.3% against an all India average of 25.2%. The second most urbanized state is Gujarat with an Urban population of 34.4%

Maharashtra is the third largest state in the country and it ranks first in terms of degree of urbanization. This position has remained unchanged since independence. The state has played an important role in designing policies, legislation and strategies for development of urban areas in general and housing in particular. The rate of growth of Urban to total population has been rising from about 15% to 40% between 1901 to 2001.

Apart from the study of the growth of population it is interesting to study the growth of urban areas in the state. The details are given in the Table Nos.4, 5, and 6. The rate of growth of different class of cities show that the bigger towns i.e. Class I cities (mostly the Metropolitan cities) are growing at a faster rate than many other cities. Certain Class II and Class III cities have much higher growth rate than other cities within the same class. Most of such cities are very close to large urban centres. In certain cases some urban centres have greater population than the headquarters of the district in which these centres are situated. By and large, the number of urban centres have not undergone much variation only the centres have changed their class from time to time.

The urban population of the state is 38.73% of the total population. It has been growing at a rate higher than the growth rate of total population and consistently so since independent. As per 1991 census the urban population is distributed in 307 urban areas of different sizes. However, the Bombay Metropolitan Region accounts for about 50% of the urban population! Pune and Nagpur Metro Regions account for 15% of the urban population. Another 15% is distributed in about 45 Class I and Class II towns. Thus only 20% of the urban population is located in over 200 urban centres of Class III and below.

The present study is restricted to 25 Class I towns of the state. The Class I cities are spread over the state and their locations are shown in the Map below. The total population of all these cities as on 1991 is 245.62 lakhs with a total area of over 2000 Sq.Kms. The details are given in Table No.7. It can be seen that the average density works out to 75 persons per Ha. If the rate of growth of 1981-91 decade remains constant for the next decade then about 8.03 lakhs persons will have to be

accommodated in these cities per annum. At an average density of 250 persons per Ha. the land area requirement will be to the tune of 1600 Ha. per annum for all these cities put together. Making available this land and its development in a gigantic task. This task is to be handled by the various agencies engaged in the shelter sector. In Maharashtra state following public agencies are engaged in the field of Urban Development and-Housing .

  1. Maharashtra Housing and Area Development Authority. (MHADA)
  2. Bombay Metropolitan Region Development Authority. (BMRDA)
  3. City and Industrial Development Corporation of Maharashtra Limited. (CIDCO)
  4. Nagpur Improvement Trust. (NIT)
  5. Pimpri Chinchwad New Town Development Authority. (PCNTDA)
  6. Municipal Corporations and Municipal Councils.
  7. Cantonment Boards.
  8. Maharashtra Industrial Development Corporation Ltd. (MIDC)

  1. Maharashtra Housing and Area Development Authority. (MHADA)
  2. Bombay Metropolitan Region Development Authority. (BMRDA)
  3. City and Industrial Development Corporation of Maharashtra Limited. (CIDCO)
  4. Nagpur Improvement Trust. (NIT)
  5. Pimpri Chinchwad New Town Development Authority. (PCNTDA)
  6. Municipal Corporations and Municipal Councils.
  7. Cantonment Boards.
  8. Maharashtra Industrial Development Corporation Ltd. (MIDC)

In the past the emphasis was on acquisition, development of land and construction of dwelling units. The role of state as FACILITATOR is being emphasized now but the exact line of action is yet not clear. The existing legislations were designed to suit the role of PROVIDER and not for the new role of FACILITATOR. This has affected the overall performance of these agencies in the shelter sector. The current legislation has its focus on acquisition of land and the procedure is different in different Acts.

The state has following legislation for procurement of land for housing by various public agencies mentioned above.

  1. Maharashtra Housing and Area Development Act, 1976. (MHADA Act)
  2. Maharashtra Regional and Town Planning Act 1966. (MR&TP Act)
  3. Bombay Metropolitan Region Development Authority Act 1974. (BMRDA)
  4. Land Acquisition Act 1894. (LA Act)
  5. Urban Land Ceiling and Regulation Act 1976. (ULC Act)
  6. Nagpur Improvement Trust Act. (NIT Act)

It is necessary to study the provisions of all these statutes as they relate to the acquisition of land, time involved, amount of compensation payable in respect of land taken over and then to study the utilization of the provisions in actual acquisition of land. Accordingly, data on land acquisition in the state has been collected and presented hereafter. Important provisions of the legislation are explained in comparative manner in brief in Table No.27. Detailed review is presented in subsequent text.

URBAN HOUSING AND LAND MANAGEMENT: A REVIEW

Till the year 1947, in the absence of a defined Housing Policy the actions in the field of housing were restricted to identified socio-economic groups. Even in the early years after independence, the activities in the Housing sector were focused on such groups. The Housing Board in the state was formed to construct houses of standarised design, specifications and costs for identified groups like refugees after partition, project affected persons, industrial workers and slum dwellers. There was no specific attention to general requirement of housing due to the growth of cities either by natural growth or by migration.

As the cities grew rapidly in the fifties and the sixties attention of the policy makers was drawn towards the problems of urban areas and this resulted in direct involvement of Government in urban housing and land management issues. This led to formulation of specific policies and enactment of special legislation like Town planning Act 1954 and Slum Areas Act 1956.

In the Third Five Year Plan (1961-66) of India the committee on urban land policy (1965) suggested the following as goals for the land policy:

(a)To achieve optimum social use of urban land.

(b)To make land available in adequate quantity, at the right time and at reasonable prices to both public authorities and individuals.

(c)To encourage cooperative community effort and bonafide individual builders in the field of land development, housing and construction.

(d)To prevent concentration of land ownership in a few private hands and especially to safeguard the interests of the poor and underprivileged section of urban society.

Some of the major problems facing the urban areas were identified as overcrowding, congestion, slums, non-conforming users, lack of community facilities, rising land prices, growing unearned increments and underutilization of land.

The state town planning legislation was used to deal with these problems. The preparation of Urban Development Plans, enforcement of zoning and Development Control Regulations and Acquisition of land for implementation of the Development Plans were actions taken by the state to deal with the various problems. The result however was far from satisfactory due to the inherent limitations of the legislation and procedural delays.

During the Fifth Five Year Plan (1974-79) another objective was added to the policies on Urban Land Management. To allow land to be used as a resource for financing urban development. This resulted in further emphasis on acquisition of land by public agencies. However, the policy was not supported by efficient land taxation, registration and management systems and effective administrative machinery.

The most significant Urban Land Management initiative of the period was the enactment of the URBAN LAND (CEILING AND REGULATION) ACT 1976 (ULC ACT). The aim was to put a ceiling on the area of vacant land which can be held by an individual in selected urban areas. This was an attempt to check speculation. It was expected that large areas of land in urban centres would become available for housing of the weaker sections and for community facilities. The amount payable for the compulsory take over of the surplus vacant land beyond the prescribed ceiling limit and its manner of payment was also laid down in the text of the said legislation.

The consequence however was that the quantum of vacant land available for development was severely restricted in supply and as a result, land prices rose to absurd levels and it become almost impossible for most people to buy a plot of land for construction of their own shelter particularly in large cities.

The Land Acquisition Act 1894 is the major legal tool used for land procurement since independence. The Act has been amended from time to time. After the fourth constitutional amendment in 1955 when the definition of “public purpose” was broadened, it was effectively utilized as a basic guideline for further legislations for acquisition of land under Town Planning Acts, Development Authorities Acts and Improvement Trust Acts.

Unprecedented growth of urban areas and consequent growth of slums attracted attention of all concerned and some new legislation was enacted. The Slum Areas (Improvement and Clearance) Act 1971, for the first time provided a special, speedier acquisition procedure and a new system for determining compensation for compulsory acquisition of land. All activities under this Act are defined as “public purpose”.

After the 22nd amendment to the Constitution in the year 1969, when the word COMPENSATION was substituted by the word AMOUNT it became possible to make many changes in legislations concerning LAND. Major Acts like Maharshtra Housing and Area Development Act 1976 and Bombay Metropolitan Regional Development Authority Act 1974 were provided with different norms about “amount” in lieu of compulsory acquisition of land. This set up a landmark in legislation about land acquisition. In urban areas it allows 100 times monthly return as amount payable for acquisition of land. These Acts have stood the test in the Supreme Court of the country.

A significant step in a progressive policy for socialization of urban land was the enactment of Urban Land (Ceiling and Regulation) Act 1976. This was the most significant initiative of the period in the field of Urban Land Management. The Act put a ceiling on the area of vacant land which could be owned by one person. The Act is applicable in nine urban agglomerations in the state.

It was expected that as a result of this enactment large areas of urban land will become available at a low price to Government and public agencies. Ironically, though large areas have been identified as surplus under this Act, actually, only about 2% of this land has been taken over by the Government. Details of these lands are given subsequently. Litigations, administrative constraints, capacity of public agencies to take over and develop the lands in short period and lack of political willingness to implement the Act effectively have been the hurdles in making available developable lands.

Impact of Urban Land Legislation on Prices

Though the main objective of the Urban Land Management Strategies was to restrain unwarranted price rise, the result has been the reverse. The various urban land legislations have resulted in being “impediments” rather than “instruments” to achieve the goals. All this has led to rise in price of urban land and has also affected its availability in the market. The land prices have registered increase upto 1000% in last 15 years in some parts of Bombay i.e. between years 1966 and 1981. This can be compared to the increase in cost of living which was only 280% during the same period.

It is interesting to compare this rise in the prices of urban land with the rise in the prices of Gold, Silver and Shares, which are the other major investment instruments. The details of price indexes for these commodities are given in the Tables No.28 and 29. The Economic Times Index gained more than 400 points during the period from January 1980 to December 1989 for equity shares. During the same period the index of gold prices gained only 145 points and the silver price index gained about 120 points. The percentage increase works out to 400 for shares, 120 for Gold and 82 for Silver. Thus land prices which rose by 1000% have definitely scored over all these commodities. In Bombay, the percentage increase has been more than twice that of shares and almost ten times that of gold and silver!

Considering the importance of availability of land for development activities it may be necessary to study and compare the profitability of investment in various commodities seriously. Judging by current data it may be necessary to curb the investment in land by granting concessions in return as well as limits of investment in other commodities to reduce pressure of investment in land.

LAND ACQUISITION:

ACQUISITION UNDER LAND ACQUISITION ACT 1894 (LA ACT)

Prior to the enactment of special Acts like MHADA Act, BMRDA Act, etc. this was the only statute available for acquisition of land for various public purposes including housing. Even now, public agencies, except MHADA and BMRDA, have to use only this Act for acquisition of land for their activities. The CIDCO, Municipal Corporation and Councils are required to use this Act for their activities.

Municipal Corporations and Councils acquire lands for various public purposes. The percentage of land required for housing is less as compared to other users. Certain Municipal Councils have acquired lands for IUDP and IDSMT schemes. In these schemes the component of housing or shelter is sufficiently large. However the towns covered under these schemes are mostly small towns and not included in this study.

There is also provision of payment of solatium. Even then the actual compensation payable in land acquisition cases is always less than “actual” market value. This is because of element of two components of market value i.e. Recorded and Unrecorded parts. There is also another aspect i.e. potential of future benefit. This is never considered. There is a linkage with present returns only. The potential benefits of future always prove profitable for acquiring authority if the development is done in phases.

The L A Act was modified in the year 1987 and the compensation payable is now “Market Value” and the interest rate is 12 percent. The procedures and the formalities were rationalized and a stringent time limit was introduced. The revised provisions have put considerable constraints on agencies acquiring lands under this Act. It is however rather early to assess the impact of these changes as compared to the performance in the past.

LAND ACQUISITION UNDER MAHARASHTRA REGIONAL AND TOWN PLANNING ACT (MRTP ACT)

The MRTP Act provides for acquisition of lands for the implementation of proposals framed under a sanctioned Development Plan. As such, the Act is not used primarily to acquire lands for housing except for “housing for the dis-housed” due to any proposals under a Development Plan.