Saturday, May 28, 2005

Looking for that elusive roof on the head

Looking for that elusive roof on the head

The High Court Order quashing the acquisition of land for the formation of the now complicated Arkavathy Layout has brought to focus the role of the State in providing housing facilities.

Deccan Herald

WHAT are the fundamental prerequisites for a healthy growth in the housing sector? Is it the role of the banks and other financial institutions? Or is it the government’s support? Or is it the action oriented plans of the development agencies? What are the weak links in this vital sector. Let us examine the scene in the aftermath of the High Court order on the formation of Arkavathy layout.

All of us will agree that the healthy growth of the housing sector depends on the co-ordinated efforts of various governmental agencies. Infrastructural development, such as, roads, water supply, drainage etc are naturally, the fundamental prerequisites for proper growth. In a proactive approach, the governmental support to build these infrastructure will be forthcoming in good measure.

In fact, the government has to take up the responsibility of raising housing colonies in cities, towns and even in villages as part of planned growth of the sector. In developed countries, private sector takes care of the real estate development as an industry. In developing and underdeveloped countries, the State gives the lead. In India it was perhaps the planned economic growth which commenced with the five year plans that heralded the beginning of the housing sector growth as well.


As far as Bangalore is concerned, the erstwhile City Improvement Trust Board (CITB) was the forerunner in developing housing layouts as early as in the nineteen fifties. The Jayanagar first block was perhaps, the first of such endeavours. After a few years, say, till the 1980s when the city started feeling the impact of population growth, the private sector was practically non-existent. In between, the housing co-operative societies which sprang up in good numbers, took up the task, to cater to their members.

Societies sponsored by employees of industrial and commercial establishments did a commendable job by developing and allotting sites. These societies were not meant for profit generation, though some of them were making profits too, while a few were found to have been very ambitious and embarked on commercial ventures, sometimes inviting legal intervention. The State Housing Board also played an active role in building houses for the different income groups, especially, the low and middle income categories.


It was the Bangalore Development Authority (BDA), established as a successor to the CITB, which took up the challenge to meet the future needs of the growing housing sector in a massive way. Many layouts like, Binnamangala, Jeevanbhimanagar , Domlur, JP Nagar were developed between 1970 and 1990.

Such efforts reached a crescendo during 1990 to 2000, consequent to the information technology boom and the resultant increase in demand for houses. The development of apartments by builders to meet the ever growing needs of the IT sector too started in the 1980s and 1990s.

Once the Bangalore Agenda Task Force (BATF) came into the picture for balanced growth of the city’s infrastructure, the BDA being one of the constituents of the BATF seriously planned layouts like, the Banashankari IV, V and VI Stages.

Though the BDA acquired land for development through notifications issued by the State government, litigations were minimum until the takeover of land for forming the Arkavathi layout started.

Simultaneously, there has been a change in the political set up in the State and then came the change in incumbency at the BDA.

Land grabbing instances also came to the fore from the time the Devanahalli airport was conceived.

The Bangalore-Mysore Infrastructural Corridor Project too had its woes to cumulate the problems relating to State Initiatives.

Arkavathy conundrum

What went wrong with the BDA’s actions in the formation of the Arkavathy layout cannot be pinpointed, though it is generally believed that forced acquisition without adequate compensation and demolition of constructed (old or new is another debatable point) houses appear to have been the central issues. For an ordinary citizen, the process of locating revenue lands in the outskirts of the city, acquiring them by way of notification by the State government, giving suitable compensation to the owners of the land taken over for forming layouts for allotting sites to eligible applicants who do not possess houses in the city of Bangalore or elsewhere under preferential rates are the steps involved.

Future gains

For the erudite investor, it is an occasion to invest in properties, the cost of which will go up over the years, so that, when the site is sold after some years, as allowable under the terms of allotment, it will bring in good returns for the investment. This has become very attractive since the interest on bank deposits has been coming down over the last three to four years.

Whatever be the motive for seeking sites, from the BDA, considering the fact that, private developers of plots and apartments have been pitching on high cost projects, the average citizen could not afford such luxuries and they are always looking forward to initiatives by the State to provide shelter to them at reasonable cost.

In the recent past, people had developed faith in the BDA’s ability to form layouts and allot sites of different size and cost expeditiously. The Banashankari IV-VI stages’ example has also had a confidence building effort.

In this background, when the BDA came forward with the proposal to allot sites in the proposed Arkavathy layout, there were a record number of applications. Despite the delay in allotment, the applicants patiently waited for over one year ( the early birds waited for almost 18-20 months) expecting allotment. Meanwhile, bad news has been coming out in the form of sporadic litigations. The positive news was that, compromises were made by the BDA to placate the litigant land owners whose lands were acquired/ notified for forming the layout.

Future of housing

Now that, the High Court has struck down the acquisitions, what can be the future of the housing sector in the Bangalore metro? While many views can emerge, one generally feel that, the BDA will hereafter feel shy to take up such ventures, and go into a limbo.

Using this opportunity, the private developers and builders will go on a rampage in buying lands for development and sell the developed sites or apartments at exhorbitant cost to the hapless citizens who aspire to own a roof over their heads. Recent liberalisation in FDI participation in real estate will also make enterprising developers to move swiftly and grab opportunities.

If all these possibilities come true, the cost of housing in Bangalore will be such that, lower and middle class income groups will forever live in rented houses. The situation will go beyond repair in too short a time that, even if the government finds out ways to prevent litigants taking upper hand in the days to come, it will be too late to take correctives in the short run. Arkavathy can thus be the proverbial bull in the China shop!


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