Housing development fee to go up from Dec
Standard development fee based on level of infrastructure development, land cost, population size, proximity to NCR and historical and socio-economic importance of city, etc
Nov 19, 2014
Source : The Times of India


LUCKNOW : Now you will have to pay Rs 1,400 per sqm as development fee for getting your house map approved from the Lucknow Development Authority. Development fee has also been fixed for other districts. The rates have been standardized following the state cabinet's green signal to the new policy which determines development fee for various cities. The policy has been sent for the gazette notification and is expected to get implemented by the first week of December.

The rates will be applicable on all new projects with effect from the date it gets notified and becomes a legal instrument. A committee headed by the secretary, housing and urban planning, has segregated towns in five categories to determine their standard development fee based on level of infrastructure development, land cost, population size, proximity to NCR and historical and socio-economic importance of city, etc. Ghaziabad is the most expensive while smaller towns such as Gorakhpur, Muzaffarnagar and Unnao, have a lesser fee. Lucknow, Kanpur and Agra have been assigned a fee amount of Rs 1,400.

Until now, there was no policy to determine the fee for individual houses or city development charges for hi-tech and integrated townships. This had led to development authorities charging a fee according to their own wish. The housing department would often hear complaints from builders and property owners that they were charged an arbitrary fee. NR Verma, advisor planning for Awas Bandhu, said, "The policy will introduce transparency in housing activities and put a check on all irregular ways of charging people. It has been approved by the cabinet and is likely to be notified soon".

Housing officials said people believed that providing proper infrastructure was a responsibility of the government but did not realize that cost recovery on developments was very poor. Because of poor cost recovery, infrastructure has not been able to grow in cities substantially. The government has to charge a rational fee from the people to develop ample infrastructure. This has also obstructed allowing increase in FAR (floor area ratio) while land cost has been constantly increasing.

Until now, LDA charged Rs 1,350 per sqm. The new policy charges more for group housing projects due to pressure of high density on infrastructure. It says that a developer has to pay 5% additional fee on every 25 extra dwellings. Similarly, if a single occupancy has been converted into multiple occupancy on land which has already developed infrastructure, the developer has to pay 10% of the required fee.

The policy will pinch the pockets of builders of hi-tech and integrated townships more as the city development charges have increased by more than five times. For example, in Lucknow and Ghaziabad, while a builder had to earlier pay only Rs 3 lakh per acre for developing a township, he would now have to pay about Rs 16 lakh per acre in Lucknow and Rs 20 lakh per acre in Ghaziabad.

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