Under Ulcra, the rule restricted individual land holding to 500 sq m with the government using the surplus land to provide public housing of 400 sq ft and 800 sq ft.
Piyusha Shankar, 24, a call centre employee is confused. While high property rates had delayed her plans of a flat in the suburbs, what baffles Shankar is why a flat admeasuring 1,000 sq ft is broken up in two sale agreements.
The answer, say real estate experts, lay in the Urban Land Ceiling (Regulation) Act, 1976. Under Ulcra, the rule restricted individual land holding to 500 sq m with the government using the surplus land to provide public housing of 400 sq ft and 800 sq ft.
In a city starved of developable land, Ulcra clause led to rampant corruption. “Which landlord would like to give up his land for peanuts?’’ asked developer M Shah rhetorically. Considering the high land value, the compensation of Rs5 per sq m (psm) and Rs10 psm offered by the government in the suburbs and island city respectively in lieu for their lands did not alter as Ulcra was formulated in 1976.
Flustered with the meagre amount offered, not many landlords came forward to give up their lands. So, land soon started getting encroached upon in many cases. With no land available for public housing, the government decided to go slow on acquiring lands and granted exemptions to landlords/developers under various rules to construct housing projects.
The exemptions included slum schemes, no development zones, coastal regulation zones, built up portions and more recently, defunct textile mill lands.
“The problem started when developers became greedy and colluded with corrupt officials to manipulate lands to be exempted or flats to be allotted to the government. On paper, flats of small size were constructed but sold as one unit to buyers,’’ acknowledged Shah.
The state has already collected Rs101 crore as penalty and expects to bring in another Rs250 crore from penalties levied on builders who had secured exemptions on the promise to surrender 10 per cent of the tenements to the government but had reneged. Thus far, 255 builders have been blacklisted and criminal proceedings initiated against 123.
Incidentally, the apex court set up a three-member panel under a district judge to monitor whether developers were providing the stipulated flats for low cost housing. But, the panel became defunct as no landlord/developer came to seek exemptions till 2005, following which Deshmukh revived Ulcra and acquired lands.
Says social activist and former head of the town planning department of Mumbai Metropolitan Region Development Authority VK Phatak, “The scrapping of Ulcra means the government is following the philosophy of allowing the market to operate on its own. No government intervention means a developer will be free to combine two plots.”
Ironically, the government under Ulcra stipulated that a developer can charge only the cost of construction, cost of land and fixed a certain profit margin. The charge increased from Rs135 per sq ft to Rs400 per sq ft. “However, developers always manipulated the clause by stating that it reflected only the building skeleton,” said Phatak, who believes affordable housing is a dream even if the government decides to levy a cess under the proposed vacant land tax.
“Instead of making it an example by nabbing builders who violate the act, the government has decided to scrap it,’’ Debi Goenka, a civic activist, said.
But where does that leave Shankar? Well, she may still have to wait for that elusive home of her own.
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