Land pooling- Advantages & Disadvantages

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.

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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.

Related: What is Land Pooling?

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Land Pooling- Use of the Method

This method is used when-

  • Unsuitable and scattered subdivisions delay the development of the private sector
  •  The old urban structures need to be rearranged
  • An extra provision is required for the infrastructure as well as services
  • There are certain important prerequisites for the efficacious implementation of land readjustment

It has to be funded by regional, national and the municipal governments. It is also necessary that the national Government gives the rules and policies to guarantee the fairness in the system. The agency for the land readjustment should be provided with the powers to coordinate and with others to get entry to help from different government departments. The system for cadastral system and land registration has to be powerful. Also there should be enough number of dedicated and skilled representatives on the local level and also we trained and result oriented values. As this method is depending upon the private and public cooperation, most of the landlords must give support to the use of this process. Forcible gaining of lad should not be practiced.

Related: Factors affecting Land Value, Land Use Planning

Advantages of land pooling

There are many advantages of land pooling.  It gives a nice chance for planned growth and development of the land and the infrastructure linkage and it also gives away the issues of land and densities. There are many land developer in Asian nations who generally have issues as plots in the urban area are small in size, shaped irregular and do not offer easy access to the main roads. Moreover, most of these plots are not for same and it is really difficult to find out enough number of plots those are close from each other’s and hence development of building is little disturbed.

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 The method of land readjustment is very catchy and it makes an impact on the place and timing of new urban development as it is being very tough to get the support from public for the usage of expropriation for development of the land and provision of the correct infrastructure. The method is commonly funded and commenced by the landowners sometimes as they can make enough profits from this project. On the other hand, it also helps to avoid the expensive and not so common government process for gaining the land.  The land readjustment will help the landlord to get back the big part of the land. Also, there is a need for a formation of partnership between the landlords and the public sector. Therefore there I need for the establishment of close links at the time of this also gives a good chance or the infrastructure and service providers and to recover the sustained costs and to get the land access. The recovery of the cost is a big obstacle for the governments in many of the Asian nations; this would possibly be the most important factor. If the administration is done in the systematic way then it could also provide for the increased land distribution equality.

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Not just the landlords in the area but it could also be a good means of providing entry to land for the lower income housing scheme.

Disadvantages of the land pooling

Not just benefits but there are also many disadvantages of the land pooling. As the landlords get a chance to develop the land, the current system does not force for the land development. There are many countries where the demand of land is higher for example Republic of Korea or Japan. In such countries there is a common practice of using the land as a saving source or investment tool. This has also resulted into higher rates of the land and land assumption. Also there is another big incentive for the landlords to give encouragement to the high land values. They are also encouraged to provide for the infrastructure and related services. The implementation of land pooling technique in these big countries has fundamentally stopped and there is a considerable increase in the price of lands value since last years.

Land Pooling- Effects 

There are no incentives available for maintenance of lower prices for land and no other in-house mechanism for the low-cost housing schemes, the method has received a lot of criticism for not being so operational. However it is very important to maintain some incentive for the landlord contribution, it can also be said that the profit margin is unnecessarily on the higher side and role of the public sectors has to be considered in profit sharing. This is the reason public sectors need to have a focus on the cost recovery.

This concept is a very simple one and it is based on the private-public cooperation and also related discussions. It needs very big human resources as per the qualifications and numbers too. There should be an availability of the negotiators as well the land values. We can see that in many of the Asian countries skilled staff is short in Government organizations. This is not a new idea in India. In Gujarat, this has been implemented under TPS (Town Planning Schemes). This TPS has permitted for a 76 Km long road to be constructed in Ahmedabad.

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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.

Conclusion: A good amount of work has to be done in order to study pooling a and that is related with the legal frame so that it can really be a good substitute for the land acquisition that takes place in India. The authorities have to be very clear with the people who are affected due to the land acquisition. They need to make it clear about various topics like the compensation, or settlement process etc. If treated well, land pooling can be more and more legitimate in near future.

Also Read: Greenfield Development

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