Making Heritage TDR work for Delhi
Lessons from other cities will determine the fate of Delhi's privately-owned heritage.
This article is the second part of a two-part series on Delhi’s Heritage TDR policy. Read the first part here.
Hurdles to the success of the heritage TDR policy
The new heritage TDR policy for Delhi is well-intentioned and necessary but enabling the TDR markets is a complex issue; its success depends on the balance of TDR demand and supply in the market. Higher supply and lower demand leave TDR owners dissatisfied, ultimately leading to a loss of trust and motivation to opt for it, while lower supply and higher demand causes price escalation and cartelisation, as in the case of Mumbai. Several other issues prevent heritage property owners from availing this incentive. Firstly, to get the TDR certificate the owners are required to conserve their structures forcing them to invest money upfront. While the cost of conserving a heritage structure may differ based on its condition and grade, the average cost of conservation is almost similar to the cost of any new construction. Hence, the amount of TDR awarded and the rate at which it is going to be sold must cover the entire cost of conservation. Heritage TDR in cities like Ahmedabad and Mumbai is still not popular as it is sold at the circle rate instead of market rate and the amount of TDR generated is also petty, failing to cover the full cost of conservation. The second hurdle is the process of obtaining the TDR certificate which could be cumbersome and time-taking. A study by CEPT University and Mahila Housing Trust in Ahmedabad shows that it takes about 12 months to get a TDR certificate mostly due to cumbersome bureaucratic processes. Unless the process is smooth, easy and fast, people will remain reluctant to avail petty incentives, not to forget the corruption and bribery involved. The third hurdle is balancing the supply with adequate demand by making TDR available at attractive costs to the buyers.
In Ahmedabad, residents have an option to purchase FSI from the authorities directly at 40% of the circle rate. TDR is sold at 100% of the circle rate. This reduces the attractiveness of TDR among prospective buyers.
TDR purchasers are indirectly potential funders for the redevelopment and conservation works in the private realm. Unless TDR is given in addition to the permissible Floor Space Index (FSI)/Floor Area Ratio (FAR) limit or it is available at a cost less than the purchasable FSI/FAR, the buyers will not get interested in it. The fourth hurdle is to ensure a safe, secure and transparent transaction of TDR between buyers and sellers. An online portal must be created, which is facilitated by the authorities. This will regularise the TDR market, enabling more secure transactions, and ensuring sufficient availability of TDR on a common platform. For instance, Hyderabad has recently started an online TDR bank that facilitates such transactions. The biggest hurdle that comes in the way of availing the TDR incentive is the issue of disputed ownership, and the inability to present any legal paperwork or proof of ownership. Unless the property rights issues and disputes are resolved, no owner would be able to avail any of the incentives.
Making heritage TDR work for Delhi
Delhi’s TDR policy derives heavily from that of Mumbai and is buyer-oriented as it provides TDR over and above the permissible limit. However, the incentives don’t seem to be enabling enough for the sellers. Getting a property conserved is a costly and time-taking affair, requiring the expertise of conservationists, craftspersons, artists, historians, specialised contractors, and skilled labour. Thus, it takes more than just TDR incentives to motivate people to conserve their heritage properties.
Apart from the TDR incentives, MPD-2041 has also given the provision of adaptive reuse allowing compatible commercial uses like restaurants, bed & breakfast, etc. to help heritage owners reap the economic benefits through tourism. It also allows temporary structures in open areas within the site for commercial and recreational activities. Such incentives are welcomed by the people, who are attracted and motivated by discounts, profits and hassle-free procedures. Thus, to make heritage conservation profitable for owners, urban local bodies need to look at other smaller incentives and market them as a holistic package. Some of these incentives are tax rebates, awarding additional floor areas for preservation, exemption of floor area from the calculation of unutilised FAR, relaxation in parking norms, relaxation in development fee, low-interest loans for conservation works, allowing people to give temporary rights to NGOs or other agencies to preserve and maintain the façade. Further, architects, contractors, craftspersons can be rewarded for providing subsidised services in the form of tax rebates, awards, etc.
Giving de facto land tenure by verifying the proof of long-term residence and testimony of neighbours may help resolve ownership issues. Authorities can also take over the ownership and lease it to the person in case he/she fails to provide necessary documents. Another important step that needs to be taken immediately is to notify heritage precinct boundaries and prepare a set of development control norms, as well as conservation and adaptive reuse guidelines for each precinct. The guidelines must include norms for heritage as well as non-heritage structures within the precinct. Creating intensive awareness campaigns on heritage conservation is another important step.
It is high time for heritage conservation to be treated like a business investment. No business would survive without a good marketing strategy, the authorities need to show people the immediate profits and the possibility of higher returns on their investment. It is still the nascent stage for Delhi with the master plan still in the draft stage. Big promises have been made but only time will tell whether these promises transform into measurable actions.