BENGALURU: The state government has finally come out with its development rights policy clearing the way for property development using parcels of notional land that will be available in the form of transferable development right (TDR) certificates.
The latest policy, coming after a long delay, brings the curtain down on uncertainties on the use of TDR certificates in Bengaluru and other important cities. TDR refers to grant of additional built up area (notional land) to a landowner in return for the portion of a plot acquired for a public project. The new policy provides for grant of twice the area of notional land for every square metre of land acquired.
“We can use the TDR wherever we want as it is now linked to guidance value. This is fair and equitable,“ said JC Sharma, President at Credai Bengaluru, an industry body . “The new policy is beneficial to TDR owners as well as TDR users,“ he added. If the TDR of a piece of notional land moves from a prime locality to a non-prime suburb, the area of the notional land goes up at the receiving plot to the extent of the fall in market value there.
Shantappa Honnur, a former director of Town Planning, said the policy has addressed the important issue of how to use old TDR certificates by coming up with a formula.“The policy also provides for setback relaxation with a view to popularise TDRs,“ he said. The confusion that existed in the earlier policy on setbacks had created problems for authorities with even Lokayukta taking up probes.
Since 2006-07, BBMP has issued TDRs worth two million square foot, and only less than half of it has been used. According to Honnur, many TDRs are lying unused for want of a demand and due to slump in the real estate market. However, from now on, only planning authorities can is sue the TDRs, and in Bengaluru, BDA will be generating these certificates.
According to Credai’s Sharma, the new policy might now provide some momentum to the TDR market. “Now that the supply side has been created, we have to look at the demand side. The industry can look forward to develop the TDR market in an orderly manner.“
Honnur is not sure how the market will respond to the flood of TDRs. “If we have to create a meaningful demand for TDRs, then we will first have to reduce the FAR of 3.5 available for Bengaluru, and enforce building bye-laws strictly .“
Since property developers are the primary buyers of TDRs from land-losers, the linking of TDR to market value, experts say, will help developers aggregate TDR certificates from multiple owners, and use in a single project to the maximum permissible limit.
Credits ET Realty