If real estate has just gone off the affordability radar of most of the city’s population, blame the limited availability of land in urban areas for housing projects.

Only around 30% of the available land within city limits is used for housing leading to higher proportionate land cost.

A 1,067 square feet 2BHK flat used to cost on average around Rs6.27 lakh in 2006 in western Ahmedabad, which has increased to Rs12.76 lakh in 2009. The increase in residential property rates can be mainly attributed to the steep increase in the land cost component. In 1995, land cost contributed to only 17% of the total project cost, while the same has increased to 52% in 2009, said Deep Patel, from Cept who carried out a study.

His study is entitled ‘Impact of Planning Regulations and Mechanism on Land Supply & Shelter Cost Affordability – A Case of Western Ahmedabad’. It was undertaken as part of his work in the masters degree programme in planning with specialisation in housing in 2009-10.

This shows that unexpected increase in land price is directly linked to property prices, said Patel.

He studied two town planning (TP) schemes – TP 33 of Gota in R1 zone and TP 50 of Bodakdev in R2 zone. The study reveals that the presence of development constraints such as litigations, tenure issues, speculation and land under government and semi-government agency possession restrict the supply.

His analysis of land availability for mass housing projects in the TP 33 of Gota revealed that 37.34% land was deducted as per town planning mechanism, 35.05% land was under development constraint and only 27.61% land was actual supply for development. In case of TP 50 of Bodakdev, the actual supply for development was 35.71%, while 36.06% land was deducted as per TP mechanism and 28.23% land was under development constraint.

“It has been estimated that from the total new land released and supplied by the development plan and TP scheme implementation, only 30% land is actually available for development,” said Patel in the executive summary.

Speculative holding is restricting the supply of serviced land in the market. Due to this there is a sort of artificial scarcity of land which results in illogical price rise.

Patel also suggested shorter implementation of development plan in five phases of two years each. The development authority should concentrate on the proposal and preparation of TP schemes for a period of two years in a particular area. He also suggested that higher Floor Space Index (FSI) should be given for early development for a limited period of time in the concentrated area. The land under development must be utilised in optimum way so that proportionate land cost could be brought down to make property affordable, he said.