Whalesbook
NAREDCO Seeks TOD Policy Changes
The National Real Estate Development Council (NAREDCO) has asked the Delhi Development Authority (DDA) to amend its recently introduced Transit-Oriented Development (TOD) policy. NAREDCO proposes relaxing rules on apartment size and removing price caps, aiming to boost residential and commercial development. However, these changes also spark debate on how to balance developer interests with the policy's goals of inclusive and affordable urban growth.
NAREDCO's Specific Demands
NAREDCO's main requests are to remove the current price cap on TOD projects and define apartment unit sizes using the RERA carpet area, instead of the current '100 square meter built-up' limit. Harsh Vardhan Bansal, President of NAREDCO Delhi, stated that these restrictions might discourage developers, emphasizing that flexibility is key for projects to be viable. Delhi's TOD policy currently encourages dense, mixed-use developments near Metro and RRTS corridors. It allows a Floor Area Ratio (FAR) of up to 500 under certain conditions, with at least 65% of the development dedicated to residential use. NAREDCO's proposed changes could lead to different types and prices of housing units being built under this policy.
Market Context and India's Real Estate Sector
Transit-Oriented Development (TOD) aims globally for compact, walkable areas near transit. However, India struggles with implementation due to fragmented governance and a lack of coordinated planning, issues seen in cities like Mumbai and Bengaluru. Delhi's TOD policy covers a significant area along transit corridors, but the city faces ongoing challenges like housing shortages and strained infrastructure. Meanwhile, India's real estate sector has attracted record equity inflows totaling $30.7 billion from 2024 through Q1 2026, with a notable shift towards premium housing and stable assets such as land and offices. The National Capital Region (NCR) real estate market shows balanced growth, with residential prices increasing since 2020, though affordability is improving as incomes rise. These market trends, alongside previous FAR increases in Delhi aimed at boosting housing supply, create a complex setting for NAREDCO's current proposals.
Regulatory Background: RERA and Land Pooling
The Real Estate (Regulation and Development) Act (RERA) improved market transparency by requiring sales based on RERA carpet area, protecting buyers from being charged for unusable space. NAREDCO's request to use RERA carpet area for unit size aligns with this transparency goal. However, removing price caps moves away from regulations focused on affordability. Delhi's Land Pooling Policy, approved in 2025, is another major urban development effort aimed at planned growth and affordable housing through landowner cooperation, showing a multifaceted approach to the city's future development.
Concerns Over Affordability
A key concern with NAREDCO's proposed changes, especially removing price caps and relaxing unit size rules based on RERA carpet area, is that it could undermine the TOD policy's aim for affordable housing. Historically, relaxations in development rules have sometimes resulted in higher property prices without a corresponding increase in housing density or affordability. If developers can set prices freely and build larger, more premium units, the goal of inclusive, transit-oriented development might be threatened, potentially widening social and economic divides in the city. The current policy requires 65% residential use with units up to 100 square meters to promote affordability; removing caps could shift development focus solely to high-profit, premium segments.
Challenges in TOD Implementation
Implementing TOD successfully in India faces significant obstacles, particularly fragmented governance. Multiple agencies with overlapping responsibilities often lead to uncoordinated planning, a problem seen in cities like Bengaluru and Delhi. Without strong, unified planning, transit infrastructure may be built without proper integration into land use. The effectiveness of Delhi's TOD policy, even with NAREDCO's proposed changes, will rely heavily on smooth coordination between the DDA, transport departments, and city planners. The policy also depends on developing essential pedestrian pathways and last-mile transit connections, which are often lacking in Indian cities, making it harder to access transit and reducing the benefits of living near corridors.
Balancing Developer Profits and Public Good
The call for relaxed regulations points to the ongoing conflict between developer profits and public goals such as housing affordability. NAREDCO contends that current rules hinder development. However, removing price controls entirely could result in a market focused on high-value properties, making them unaffordable for many people the TOD policy intends to benefit. NAREDCO's wider push to redefine affordable housing from Rs 45 lakh up to Rs 75-80 lakh suggests a significant difference from current government affordability targets.
Outlook for Delhi Real Estate and TOD Policy
Analysts expect India's real estate market to maintain its growth, driven by urbanization and infrastructure development, but with a stronger focus on premium properties. NAREDCO's proposals will likely face government review, requiring a balance between industry needs and urban planning objectives. The success of Delhi's TOD policy, regardless of amendments, will depend on effective execution, coordinated government action, and a consistent effort to ensure development supports affordable housing and fair urban expansion. The industry's efforts to change regulations signal a broader movement to influence future housing policies, including new definitions for affordable housing and more support for rental properties.