Pooling is a process of collecting parts in order to create something bigger. Land pooling occurs when landowners agree to give their land to an authority for development purposes. In return, landowners get certain benefits. Governments often create land pools when they plan infrastructure development. Private developers also create land pools for their future projects.
Large-scale infrastructure projects are necessary for urban and rural development. These projects need large tracts of land. However, it’s hard to find a large tract in one place. Large portions of land often consist of thousands of pieces and so are owned by thousands of individuals. Therefore, acquiring these tracts for development is often a challenging task for governments. To speed up the acquisition process, governments must implement effective land-pooling policies.
How Land Pooling Benefits Homebuyers
First of all, it’s important to understand that land pooling often leads to an increase in the price of the land. Thanks to the availability of amenities and better infrastructure, the land usually demonstrates a steady increase in price during the first few years of development. Property prices quickly grow in well-developed cities so land pooling and further development of the satellite townships can become a great alternative for people with low income who live in the most populated areas of the city. Usually, property in such townships remains cheaper than the property in big cities.
Land pooling policies are implemented in different parts of the world, and India is one of the best examples. The concept of land pooling was first introduced here in 1957, in the Delhi Development Act. Now, the land pooling policy is regulated by and described in the Master Plan 2021. Experts expect the dynamics of the real estate market to change dramatically because of the affordable apartments that become available in Delhi. The land pooling policy will unlock up to 25,000 hectares of land in smaller towns near the city and in urban villages.
The homebuyers will benefit from the increased number of houses available and from the infrastructure developments. There is a shortage of housing units in Delhi so the land pooling policy is expected to fulfill the demand in the state. In addition, landowners who offer 2-20 hectares of land for development purposes will receive 40% of their land back, and those who offer 20 hectares will get 60% of their land back once the development is complete. The rest of the land will become the property of the Delhi Development Authority.
How Land Pooling Helps Land Owners
The most important aspects of the land pooling policy in India are the flexibility that enables farmers to collaborate with developers or trade their land, as well as the self-penalty on Delhi Development Authority for any sorts of delays. If the organization fails to develop the pooled land within a certain period of time, it will have to pay farmers and landowners 2% of the External Development Charges during the first two years and 3% after this period. The organization will pay this penalty if it fails to complete the project within a defined period of time or five years, whichever is later.
Nevertheless, buyers should understand that launching such projects is a complex process. Large-scale development projects cannot be launched without the registration of the project by the regulatory authorities, various approvals, etc. Buyers should be careful when they get such offers from private development companies and they shouldn’t make any money transactions before project approvals.
The Environmental Impact
Quite often, land pooling is considered a better alternative to land acquisition. When acquiring land, the two parties exchange money. During the land pooling process, the landowner gets compensation for their land and also receives a part of the land back, while the new infrastructure and facilities increase its value. However, land pooling is also different from land acquisition because there are no environmental impact assessments that would precede this process. For instance, Delhi’s authorities don’t say anything about the compensation associated with water and air pollution.
Land pooling is aimed to fulfill the urbanization demands, and it’s intended for private landowners. Even though these are large-scale projects, the organizations responsible for them do not always consider their environmental impact. For instance, the Indian government plans to treat water internally in order to prevent discharge into the water bodies nearby. However, it doesn’t mention any specific details about how they’re going to do it. The government claims that it will oversee sewage treatment plans, water supply lines, water treatment plans, and rainwater harvesting, but it doesn’t provide a detailed plan.
Another common challenge is the fragmentation of land zones and the transfer of land ownership. Even though landowners can receive up to 60% of the land, they cannot expect to get this land exactly where they’ve lived before. Therefore, transferring ownership is a difficult task, as the Indian government is still not sure whether or not new owners will have to pay previous owners a stamp duty fee.
The external development charge also creates difficulties because many farmers and landowners may be unable to pay it. On the one hand, many experts state that farmers and their families shouldn’t pay it. On the other hand, the government might need a lot of time to calculate the right rate. Land pooling is a very complex subject so bloggers and website owners who want to describe this process often realize that they don’t have writers who would be able to address the topic properly.
Land pooling is a common practice. This is a process of collecting tracts of land for development purposes. Landowners who offer their land for the government can receive compensation, and they can also get a part of their land back once the development project is completed. Land pooling increases the cost of the land and offers an affordable alternative for people who cannot purchase expensive homes in big cities. However, land pooling also requires governments to come up with effective and clear policies that will address the environmental impact of such development projects. There is also a need for clear ownership transferring rules.
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