Real Estate Rent EMI HRA-Vidur Raj

The Banker-Politician-Real Estate Developer nexus and poor financial planning led to the turmoil in the real estate sector in India. Many developers either cheated or drove themselves into a debt trap where they could not deliver their commitments and left thousands of investors in property without any recourse. Even the government did not provide an adequate solution, but just touched on a solution for window dressing. Some builders sold all their other businesses to fulfill their real estate commitments & could not, and some stayed clear of trouble and delivered. Those that delivered were very few. Some of the solutions offered were left to government owned & funded builders to complete, and setting up of inadequate funds or pools of monies which could be drawn in a manner whose purpose was to deliver completed residences & offices. Well, today real estate construction is at a standstill because of COVID-19.

This standstill should be taken as an opportunity to re- start all over again with proper address to undelivered or stalled projects, and providing the builders who did not deliver, new resources & monies (after all previous monies that were received on account are duly collected & accounted for) and are made to work in the everyday construction of projects as employees, managed by a committee or board of directors, that are representative of the government as well as would be owner investor allot tees. These fraudulent builders turned employees will remain such, until all prior commitments are completed, with 14% (tax free) per annum penalties for delays, and thereafter they could be re-instated with highly regulated resources & funds, & construction projects, if anyone is willing to buy, or invest with them again. This course should be followed instead of sending errant builders and managements to jail. They should not be allowed to enjoy their ill gotten stashed away wealth after their short jail sentences.

CPM analysis & decision tree analysis for all construction should be listed online at the architect’s level, with government real estate officers monitoring every project as per the CPMA & DTA covers, and with non acceptance of any delays, and imprisonment: as the penalty for delay……one would have to think of every possible scenario in the CPMA & DTA and cater to it, so that there are no delays in delivery. Architects would also be held accountable in case of delays.

All labour will be organized and no construction will be allowed with unorganized labour as they are exploited and are the forgotten heroes & heroines of all completed construction projects, just like those who built the Taj Mahal.

Construction labour all the way from in the villages upto to the Metro cities should all have to be registered and have to be employed with better conditions & compensation packages.

As the new Real Estate Industry matures it should stabilize with RENT=EMI=HRA and then everybody, or every nuclear family, can aspire to own or rent an accommodation near place of work. This would take off the load on commuting. Also one would be able to port one’s residence or office to whatever priorities one chooses like near workplace, or near school or college, or in a different village, town or city depending on where life takes a person (and his/her family) for economic, or other notified, & considered reasons. This equalizing mode will also rationalize pricing because all 3 options would cost the same. Real Estate will not be that expensive that it becomes unaffordable as EMI’s will be influenced by the downward pressures of HRA & RENT, in relation to the rate of return expected from the high Capex  required to buy a property; as well as exert an upward direction by the EMI’s on HRA & RENT pricing . Pricing of RENT, EMI & HRA should equal each other so that a citizen can chose whatever mode he or she can afford, due to the unique conditions & circumstances that one has to face. Of course, the landlord or landlady can chose whether he or she will rent the place either by the tenant paying the Rent/via HRA (if applicable) or by EMI incase the builder, instead of selling the residence/office chooses to rent the place. Note that these modes will still be applicable to the more demanded properties which will attract higher pricing levels for all 3 modes.

Demand for property at a particular location could determine & encourage old areas to be broken & rebuilt, with proper guidelines drawn up for displacement & return to the newly built property, whose built up area should be expanded to cover all amenities such as to accommodate adequate parking, domestic & low rank office employees with quarters & proper board & lodging. However, if an employee is fired or dies during service or retires then there must be arrangements made to relocate to a suitable same standard quarter; not applicable if fired. In the other cases, similar employment could be offered to surviving members of the family. Care for retired personnel should also be configured into the planning.

Jhuggies and unorganized unauthorized colonies which surround organized residential colonies & commercial complexes, should be razed to the ground and rebuilt with the old owners being asked to pay a nominal monthly fee to the government company that rebuilds them using “good construction practices & techniques”. These could be multi storey buildings but these will not be allowed to be rented or sold. The persons staying in the building must continuously prove that he/she is employed or self employed and in duty to the subject regularized residential colony or commercial complex. Jhuggies and un authorized colonies built near commercial or residential areas can be used by domestic servants, self employed skilled and semi skilled workers & office staff. Proper & adequate building maintenance for residential and commercial houses, apartments and offices should be made compulsory.

These models should also be followed in smart cities where each city focuses on one or more industry, and the entire city be planned in a way that everyone can walk from home to work, schools or colleges. For food & Drink one should also be able to walk to   canteens, cafe’s & restaurants, get laundry etc done, all within walking distance from home also. The smart city should build underground as well as upwards, and at a level of construction that is earthquake proof. Farms should be encouraged at the periphery of the city limits. Just as people can be moved by underground trains, so should fresh vegetables & fruits and other products & goods be transported into smart cities?

Architects from all over the world as well as indigenous, could sieve their own original building plans from all across the world and ages, so as to leave their own indelible mark in the development of our country; thereby enabling the future generations to identify with our diverse architectural aesthetic ethos.

Let us now wait & plan till COVID-19 allows us to restart construction!!

Disclaimer: The views expressed in the article above are those of the authors’ and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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