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Making affordable housing work

Last updated: 02 December, 2010
DHNS 15:35 IST

The housing shortage in India is enormous.

As many as 26 million homes are projected to be required by 2012 to meet the existing housing need, and 99 per cent of these homes are needed by households in the Economically Weaker Sector (EWS) and Lower Income Group (LIG). If the current increase in backlog of housing is maintained, a minimum of 30 million additional homes will be required by 2020. While some housing demand will be taken up within the existing housing stock, many millions of homes will need to be built across the country to fulfill the vision of becoming slum-free. Not only is the challenge to build many homes, but also to ensure that they are built at the right location, available at an affordable price to households that are in most need and of adequate quality to endure in the longer term.

These and other findings of the research report titled ‘Making affordable housing work in India’ were shared by the Royal Institution of Chartered Surveyors at a national conference, featuring India’s key stakeholders and international experts in affordable housing.

Nearly 28 per cent of India’s population lives in cities and urban areas – double the level of urbanisation at the time of Independence – a figure that is expected to rise to 40 per cent by 2020. The growing housing shortage is a culmination of the high rate of urbanisation with a majority of housing stock catering to the premium segment, thereby incapacitating a large section of society from owning homes.

The high cost of real estate, limited resources and inaccurate product offerings targeted at consumer groups have collectively contributed to the economically weaker sections and low-income groups being severely underserved.

The RICS research report ‘Making affordable housing work in India’ is based on a study of the housing dynamics in India, the initiatives undertaken by the Indian government and frameworks in comparable international cities where housing programmes have been successfully implemented. International cities that have been studied in the report are Hong Kong, London, Singapore, Johannesburg, Amsterdam, Adelaide, San Fransisco and Vancouver.

Speaking at the conference, Sachin Sandhir, Managing Director and Country Head, RICS India said, “The objective of this report is to look at international best practices, to see what has worked in other parts of the world and what enabling strategies governments have used to improve housing markets along with the examples of good work that has happened in India, so as to determine what partnership models, schemes and incentives would actually work for India.”

Some of the key conclusions from the RICS research report on ‘Making affordable housing work in India’ and deliberated on at the national conference are:
Need for all states to formulate housing policies on the lines of the National Housing Policy.

Dire need to establish enforceable housing targets (national and state level) for market, low cost and affordable housing. Urban land ceiling & regulation act (ULCRA) needs to be repealed as it imposes a ceiling on both ownership and possession of vacant land and the states' ability to acquire and dispose land.

Governments to ensure the ready supply of fully serviced and planned housing land, sufficient to satisfy housing demand and the supply of low/nil cost land for affordable housing.

The current practice being followed of auctioning land by housing boards to increase receipts their revenues needs to stop if there is serious intent to encourage private developers to get into affordable housing.

Land at institutional rates to be made available to those cooperative housing societies and employee welfare organisations that have a good track record, for the development of low income housing.

State planning policies and plans need to reserve certain area for housing EWS (Economically Weaker Sections)/ LIG (Low-Income Groups), which is laid down as around 25% in the National Housing policy.

Greater transparency in distributing subsidies and allocation of funds is required.
The central government needs to support and encourage affordable rented housing legislative reforms including quicker abolition of the rent control act and also by providing rental subsidies where required, to provide confidence to investors.
Invest in innovative construction technologies to promote mass housing developments at subsidised construction costs.

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