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The Bhubaneswar Development Authority's (BDA) affordable housing initiatives have encountered a significant roadblock due to a mandated registration under the Real Estate (Regulation and Development) Act, 2016 (RERA Act). Initially, there was ambiguity surrounding the necessity of such registration under the RERA Act, leading the BDA to avoid the process. However, the Ministry of Housing and Urban Affairs has since clarified this requirement, making registration under the Act a prerequisite for the disbursement of central grants.
In response to the ministry's directive, the BDA initiated the registration process but quickly discovered that the imposed fees would render the affordable housing projects economically unfeasible. As per the current mandate, the registration must be done under Odisha RERA. However, the authority's recent substantial hike in the registration fee and late fee significantly affected the projects' cost structure leading to requests for the state government's intervention.
Recently, a high-level meeting was held with the State Housing and Urban Development Department to discuss this pressing issue. During the meeting, the BDA proposed that the state should exempt application and late fees for registration of affordable housing and slum redevelopment projects under the 'housing for all' scheme.
In an article published by ET Realty BDA Vice-Chairman Balwant Singh stated that the Odisha Real Estate (Regulation and Development) Rules, 2017, framed under the RERA Act, can be amended by the state government. Therefore, BDA plans to propose an exemption of registration for affordable housing projects under this rule, which should help eliminate the hurdles currently hampering the execution of these projects.
The BDA predominantly undertakes affordable and slum redevelopment housing projects in collaboration with private real estate developers. These developers are assigned to construct housing projects on 65% of the land at the project site, while the remaining land is used to offset the project costs.
However, the mandatory RERA registration has become a significant obstacle for these developers due to the consequent surge in project costs. "This stipulation was not included in our initial agreements," a senior BDA official disclosed. "As a result, many projects, some of which are near completion, are now hanging in balance."
This hurdle underscores the complexities of implementing affordable housing projects within the existing regulatory framework. While the RERA Act was designed to bring transparency and accountability to the real estate sector, it's clear that for projects aimed at providing affordable housing, the registration requirement, coupled with the high fees, has proven to be counterproductive.
The mandatory RERA registration has stalled affordable housing projects in Bhubaneswar. The BDA's call for state intervention and proposal for fee exemption under the 'housing for all' scheme could potentially resolve this issue. It underscores the need for a more nuanced approach to regulation that caters to the unique needs and challenges of affordable housing projects. The resolution of this issue is vital in ensuring the successful execution of these essential initiatives aimed at securing affordable housing for all.
This story was first published in ET Realty
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