Karnataka move to ban construction is no solution

The state government is toying with the idea of denying approvals for new housing projects in the city for five years

Chennai: The Karnataka government’s move to ban housing construction in Bengaluru for five years in the face of a water crisis will stir up prices of newly constructed housing property in the city. It will also hit the construction industry and render lakhs of workers jobless.

The state government is toying with the idea of denying approvals for new housing projects in the city for five years. If imeplemented, this would reduce supply in the market and push up property prices.

“Demand for ready properties will go up significantly. Builders sitting on ready inventory will immediately increase the property prices of these homes by at least 10-15 per cent. This will keep inflating over the years of the ban. However, homebuyers with new ready properties whose prices remained stagnant over the last two-three years may have a reason to cheer as finally the value of their property will rise,” said Anuj Puri, Chairman, Anarock Property Consultants.

However, for rest of the developers, it will be bad news. Builders with land banks or those who were almost ready with all their project planning and designing would face issues with this move, he said.

The ban would also lead to severe job losses for lakhs of workers who had migrated from other states for job opportunities in the construction sector. According to the Karnataka State Construction Workers Central Union, at a given time, 12 lakh to 15 lakh migrant workers from states like Rajasthan, UP, Bihar, Orissa, Chhattisgarh, and Jharkhand are involved in construction activities within the state.

The impact will not be limited to Bengaluru, as the city is currently leading the real estate revival in the country. As per Anarock data, 106 new apartment projects with around 18,600 new units have been launched in Bengaluru in 2019 till date. As per the RERA website, 328 projects are currently awaiting approval from the authorities and another 132 projects in the state are in the process of getting it.

The industry and conservationists want governments to adopt other methods to address the water shortage in cities.

“The water crisis is a real condition in many cities across the country today which are staring at acute water shortages under conditions of delayed monsoons and depleting water tables. The construction and real estate sector has to take cognizance of this situation and move towards sustainable development processes. Processes combining conservation techniques, alternate technologies and recycling processes should be made part of future developments, including real estate, infrastructure, manufacturing etc,” said Shishir Baijal, CMD, Knight Frank India, a global property consultancy.

Sekhar Raghavan, Director of Rain Centre, does not understand how a five-year ban will help water conservation. “This move will create a fear in the minds of builders. But to conserve water, the government has to ensure that builders get serious about it. It has to make initiatives like rainwater harvesting mandatory and entrust a third party for monitoring. Necessary approvals can also be linked to implementation of such measures,” he said.

“Instead of opting for such an extreme move to quell the water crisis, the government could take adequate alternate measures to conserve water, manage its sources and ensure that concepts like rainwater harvesting are strictly imbibed by housing societies and builders. It can also work to rejuvenate hundreds of lakes in the city. As another probable step, the government must penalise builders heavily for not implementing water-conserving techniques, including rainwater harvesting,” said Puri.

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