Mysore Authority's Land-Back Offer to Farmers: A Good Deal?

Muda Competes with Private Developers for Land Amidst Soaring Property Prices

Mysore city authorities, through the Mysore Urban Development Authority (Muda), are proposing an unconventional deal to farmers owning land in and around the city. The offer involves surrendering their plots in exchange for receiving 18% of the developed land, potentially valorized by the addition of amenities and infrastructure. This move is part of Muda's efforts to secure land for public housing projects in a city where property prices have doubled in just 18 months.

The Rationale Behind the Offer

1. Rudrappa, Joint Director (Planning) at Muda, elucidated the objective, stating, “The goal is to enable farmers to retain 18% of their original land after development, ensuring they benefit from the enhanced asset value.” Rudrappa further emphasized the protective aspect of this offer, suggesting it shields farmers from exploitation by private builders who often fail to pay the full agreed amount.

Pending Public Housing Applications and the Challenge of Land Acquisition

Muda is currently grappling with 1.5 lakh pending applications for public housing in Mysore, Karnataka's largest city after Bangalore, the state capital and India's IT hub. The authority's inability to match market prices for farmland has driven landowners towards private developers, exponentially increasing property valuations.

The Economics of the 18% Land-Back Offer

Based on average cost estimations for both developed and undeveloped land, officials in Bangalore's urban development department believe farmers would still benefit from receiving less than one-fifth of their original holdings. Developed land, enhanced with amenities like electricity, water, and sewerage, would significantly increase its potential for commercial development.

Skepticism from Farmers and Developers

Sudarshan Rao, a Mysore-based property consultant, highlighted the immediacy of farmers' needs, saying, “For many, land is a liability they wish to liquidate quickly to repay debts or embark on new ventures. Waiting two to three years for partial ownership post-development is not viable.”

The Developer's Perspective

Developers have aggressively acquired large land parcels in areas like Nanjungud Road, T Narsipur Road, Hunsur Road, and HD Kote Road, betting on Mysore as the next big real estate market. However, despite the rush, actual development has been sluggish, with most projects yet to break ground, including the city's first shopping mall.

Nitesh Mani, CEO of Nitesh Estates, which plans to develop an IT park in Mysore, shared the developer's cautious approach, stating, “Though land has been acquired, no immediate development is planned. Choosing the right project for Mysore is crucial.”

The Consultancy View

Praveen Kumar, Associate Director at Jones Land LaSalle Meghraj, suggested an alternative, pointing out, “Selling land to private developers at market value might be more advantageous for landowners, given the uncertainty about the type of development and infrastructure that will materialize on their returned land.”