Real Estate

Environmental clearance by local bodies to cut housing prices

Our Bureau Mumbai | Updated on November 20, 2018

Environment Ministry delegates to local bodies the power to give environmental clearances for realty project

The Centre’s move to grant local bodies the power to give environmental clearances for realty projects will reduce the gestation period, bringing down overall costs and making houses cheaper for buyers. A notification by the Ministry of Environment, Forest and Climate Change has delegated to local bodies the power to give environmental clearances for projects with a built up area between 20,000 sq mt to 50,000 sq mtr.

Approvals increase costs

This will lessen the multiplicity of approvals needed to attain clearance. “The resultant reduction in time consumed in procuring approvals will reduce the gestation period by a minimum of 12 months, making housing cheaper for homebuyers,” CREDAI President, Jaxay Shah said.

The longer the time taken for approvals, the higher the finance and other costs become for a project and it is passed on to customers. “The Centre’s move will reduce costs and boost the entire housing sector, especially the affordable housing segment,” he added.

Over the last few years, the Centre has been simplifying environmental norms for real estate. Through a December 2016 notification, it allowed projects of 5,000 sq mt to less than 20,000 sq mt within the ambit of fulfilling ‘environmental conditions’ through self-declaration.

Ease of Doing Business

Ramesh Nair, CEO and Country Head, JLL India, said,: “From a long-term perspective, the easing of norms is a big push for the affordable housing sector and will enable the Government to achieve its target of ‘Housing for All’ under the Pradhan Mantri Awas Yojana.”

In terms of Ease of Doing Business, this will boost India’s ranking further on the parameter of dealing with construction permits as well as help drive the government’s reforms agenda, Nair added. CREDAI agreed that the move would provide a highly conducive environment to the stakeholders of the Indian real estate sector, enhancing ease of doing business.

However, the local bodies mostly will not have the required competence to integrate the building norms with environmental provisions. “For the same, ULBs need to have capacity building workshops to gain technical expertise and knowledge about various environmental approvals. This will help developers reap the benefit of reduced timeline for meeting green norms for housing,” said Nair.

Published on November 20, 2018

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