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Affordable housing in core city areas is a myth: Real estate developers

Updated on: 27 October,2014 05:02 AM IST  | 
Team mid-day |

As part of a weekly series that seeks answers to some of the most pertinent questions you have about the city and its underlying issues, Team mid-day speaks to Shrikant Paranjape, vice-president of Pune Confederation of Real Estate Developers’ Associations of India (CREDAI), and his brother Shashank – who together run the construction company, Paranjape Schemes Construction Limited – to address the sky-high real estate prices in the city, and various other developmental issues

Affordable housing in core city areas is a myth: Real estate developers

Pune CREDAI vice-president Shrikant Paranjape, brother Shashank, housing costs, Punes development

mid-day: Are developers serious about environmental laws?
Shrikant: People generally accuse us of cutting and filling land and felling trees, but any reputed developer usually plants five times more trees than those he has felled. There are 13 NOCs that are mandatory to be obtained by any developer before he gets the completion certificate for a project. We are addressing basic necessities of human beings, and not building ‘Taj Mahals’. So, while we are very serious about environment laws, we want the environment clearance period shortened.

Shrikant Paranjape
Pune CREDAI vice-president Shrikant Paranjape and his brother, Shashank, explain the different factors pushing housing costs upwards, but maintain that with a few changes, Pune’s development can be as swift and efficient as other cities. Pics/Shashank Sane

mid-day: Is the Gujarat model of development possible in Pune?
Shashank: There is no place in Pune where a person can go, or take his family along, for an evening walk. Whereas, compared to Ahmedabad, Pune is much greener. The BRTS and river development project in Ahmedabad can be replicated as it is, in Pune.

mid-day: Do you agree that Prime Minister Narendra Modi’s declaration to ensure ‘a home for everyone’ is possible in the near future?
Shrikant: It’s a very tough task. A lot has been said about affordable housing, but governments have not given any concession to developers. Even in case of inclusive housing (20 per cent homes reserved for economically weaker sections), the burden was put on developers, because Maharashtra Housing and Area Development Authority (MHADA) could not build these homes. We expect that government should give developers concessions in VAT, service tax, etc.

mid-day: Will property prices in Pune eventually decrease? If yes, how can it be made possible?
Shrikant: The market is improving, but rates will not come down any time soon. Of the total cost of any property, 30 per cent amounts to various government taxes. The other biggest factor is that of land cost, construction cost, labour cost and time and interest on the money invested. Considering these factors, affordable housing in the core city areas is a myth. Property prices can be kept in control only if public transport is enabled en masse on the periphery, and that is preceded by population growth in these areas.

mid-day: What is your take on permissible FSI in the city areas?
Shrikant: Ideally, there should be no FSI limits in the city. This will help keep land costs under control, so people won’t have to go too far out to find a house. The construction cost and market restriction obviously limits the developer in such scenarios. If this can change in Hyderabad, then why not in Pune? If there is no FSI limit, the side margin and parking norms are strictly followed.

mid-day: Is it possible to make Pune a smart city?
Shashank: Besides making the existing city a smart city, new smart cities will have to be developed. Everyone knows India will need 100 more cities, and this is a serious issue, but there is no proper end-to-end documentation on how we are going forward on it. The problem lies in not envisioning enough long-term policies.

mid-day: What are your expectations from the new government?
Shashank: The ‘killing period’ of getting clearances, sanctioning of projects should be shortened. The next five years are crucial, and we are hopeful that the new government will take positive steps to promote the real estate sector.

mid-day: What is the nature of complaints received by the grievance cell of Pune CREDAI?

Shrikant: Most of the complaints are about conveyance issues, or commitments made by builders not being fulfilled. We have noticed that around 50 per cent of these complaints are due to ego clashes between the consumer and the developer. However, we try to find a solution which is mutually beneficial to both.

mid-day: Does the CREDAI follow-up on issues like Metro rail project, Pune Metropolitan Region Development Authority, etc?
Shrikant: We do try to do follow-up on these issues with the concerned departments, but we builders are looked upon as a ‘lobby’. We are not considered as industry representatives, as the real estate sector has not been recognised as an industry so far. If we get this status, it will help us in getting cheaper finance, the benefit of which can be passed on to the customer.

mid-day: Is selling parking spaces legal or illegal?
Shrikant: It’s a mistaken belief that parking space can’t be sold. There is a concept of limited common area, under which the parking space is allotted, reserved and married to a house. We do not ‘sell’ the parking space, but take reservation charges against it, which is legal. Many developers are providing more parking space than what the Pune Municipal Corporation norms prescribe.

(Salil Urunkar, Kartiki Lawate, Niranjan Medhekar, Anuj Ismail, Namrata Anjana, Manasi Kulkarni, Abhishek Shende, Abhishek Shrikhande, Gaurav Ghadge and Shashank Sane were part of mid-day panel)

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