One Nation One Housing Policy Through Ministry of Social Welfare And Rehabilitation And Ministry of Co-Operation
INTRODUCTION: If one goes through all documents filed in United Nations, among all, we will find the following very important :
1) Nobody is left behind
2) Spatial segregation
3) Housing is a right not a commodity
4) Everyone should have affordable and adequate housing.
5) Inequality and Poverty should be eliminated.
NOBODY IS LEFT BEHIND :
Indian population is around 140 Crores out of which about 20 crores population do not have permanent address (homeless) and 100 crores have address, but no affordable and adequate housing (houseless) and balance 20 crores have more than adequate housing. We suggest 150 Sq. ft. of FSI at cost of construction basis and 50 Sq. t. of undivided share of land or equivalent to be declared as birth right. About 1200 Sq. ft. of FSI and 400 Sq. ft. of undivided share of land or equivalent be declared as adequate housing for households (8 member households). Those who cannot pay for cost of construction and have no permanent address must be identified by Ministry of Social Welfare and Rehabilitation and confined within a parliament constituency. Households with three to eight members must exercise their right through right to shelter must be offered 450, 900, 1200 Sq. ft. FSI at cost of construction basis without land cost by RERA/RBI house with housing loan as vouchers. To enable get lands for affordable housing RERA/RBI should float land compensation bonds based on pre FSI index and with tax free coupons, GST free coupons, Capital gains and assignment rights for land and assignment rights for FSI which will pave way for same input and same output (Leontiff input output model). This will remove inequality which creates poverty (use GOODRICH difference in difference regression model).
It is learnt from media that United States Government may declare housing as a fundamental right. India should also catch up with Global developments.
Readers are requested to go through our previous article published in Tax guru in June 2018 and in August 2021 and read this article also to get more clarity on this subject.
Reserve Bank as Banker’s bank and Government’s bank should take all the responsibility and create a new team with a Deputy Governor who will do the listing of all land compensation bonds and issue of house with housing loan vouchers, create exclusive mortgage banks for discharging the liabilities for land compensation bonds satisfying assignment rights and for FSI and for land duly discharged and for maturity payment of land compensation bonds, create limited purpose construction banks, weekly settlement system based on cost accountants, architects and GST compliance payment gateway, construction factoring services and voucher encashment norms. Every private builder / land owner should try to understand the new way in which construction business will get their cash flows.
Construction companies will be rated from 10 star, 9 star, 8 star, 7 star, 6 star, 5 star, 4 star, 3 star, 2 star, 1 star both by RERA / RBI.
Fixed interest securities players, credit rating agencies, valuers and bankers should try to value land on the basis of land compensation bonds for asset creation and avoid cross collateralisation especially for affordable housing segment.
There is a general fear that State Governments will lose revenue from Stamp Duty and Registration. The loss will be compensated from comfort housing, luxury housing, commercial zones, industrial zones and logistic zones. If u look at long term benefits it will have a very good positive sentiments. Private land developers have to change their mind set and accept reservations and concentrate on deliveries. The business model suggested is “ RESOLUTIONS, REHABILITATIONS, DEMOLITIONS, RECONSTRUCTIONS, RESETTLEMENTS ” As we have 10 star rated construction companies and cash flows guaranteed a good construction company can look at 18 % returns for their shareholders from a fifteen trillion construction market which will be 3 % of our GDP. Even though our mortgages are at 11 %, the land value consumes more than 75 % of the mortgages. That is the reason we are not having any real asset creation.
We have put all factors in our proposal and by distributing basic FSI as birth right can definitely eradicate homelessness, houseless ness, no encroachments and slum, everyone will have titled assets and no households pay rent to another household.
We wish Honourable Prime Minister who always says SAB KE SAATH SAB KE VISWAS will definitely come with the news that shelter will be declared as a fundamental right on 15/08/2022. JAIHIND
ANNEXURE – I
METHODOLOGY :
1. Shelter is three dimension. About 270 inputs are required to create a house and land is one among them. The land value in housing is extremely high and making it difficult for 100 Crore Indians not able to have affordable housing. Barren land has barren space and it cannot be measured and so conventionally it is held one who owns the land also own the space. One who owns a shelter-able land also owns the shelter-able space on it, provided it is used for self-usage using credit availability from the bank and the ways and means to repay and subject to building rules. This also is not questioned. But when a land is completely used for all the space it can create by a contractual agreement and if it crosses above adequate shelter both by number and area, after RERA regime is a matter of public policy. FSI given must come under pricing policy and reservation. It should comply with insurable interest, securitisation, national property registration compliance, land compensation bond compliance, house with housing loan compliance, apart from regular completion certificate procedure. This will eliminate 2 inequalities, one is by reservation, landless also gets FSI and the price difference in circle rates are also neutralised. This is the reason why we say land value in housing must be around 15 % in total cost when it comes to affordable and adequate housing throughout India.
2. Indifference curve. Please plot FSI index in Y axis and land in acres in X axis, you will find at 2.778 FSI and 1 acre the FSI will be around 1,20,000 Sq. ft. Similarly if you plot 1 FSI and at 2.778 acres land FSI will be around 1,20,000 Sq. ft. If u plot 0.5 FSI and 5.555 acres land you will get 1,20,000 Sq. ft. Reserve bank and RERA should value all these land parcels as same because the utility derived is same. Since we are giving 50 Sq. ft. of land undivided share free as birth right we have to distribute land at same cost and at same cost of construction will lead to same cost housing units. Suppose if we say national average cost of construction is at Rs.2,500 / Sq. ft., 15 % will be for land share and accordingly all the above land pieces must be valued equally. This calls for a uniform ready reckoner land compensation bond yield tables for RERA, RBI, Valuers, Bankers, Construction industry etc. Also house with housing loan vouchers, which has land content and if a private builder is asked to reserve certain percentage of FSI will be also knowing how much he gets for land and for construction.
3. Revealed preference theory. Every person who wants to have affordable and adequate housing will be in a position to tell for the next 33 years how much space he will require. Earning members plus dependants, additions plus deletions, births plus deaths, present and future and he can plan for portability and scalability. This will give a effective demand for housing. The rent payment from earnings will be converted into EMIs. Those with no front end money, no land no ancestral properties, ever rent payers, first shelter seekers all can benefit.
4. Leontiff Input Output .
5. Pareto’s Welfare principle
6. Supply side economics
7. Like IMF SDR creation allocation principle we will have space creation, allocation, distribution, both from Supply and Demand side.
8. D’Coven Set theory principles, this is used to solve all the land and entities related issues by creating various sets. By empowering land compensation route to land holders and by giving shelter able housing rights to the affected all issues can be amicably solved, because land will be valued equally and the houses that can be constructed and given as vouchers will also have the same value. Chief shelter Commissioner is required to solve any issue either plot wise or entity wise.
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