7 bot­tle­necks that hold back af­ford­able hous­ing in In­dia

In­cen­tivis­ing devel­op­ers to en­ter the af­ford­able hous­ing seg­ment and in­clud­ing mass hous­ing zones in city master plans are must 4Stream­line

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Large-scale af­ford­able hous­ing in cities is the great­est ne­ces­sity of ur­ban In­dia to­day. Be­cause In­dian cities have such a se­vere short­fall on this front, we are see­ing the pro­lif­er­a­tion of slums and un­or­gan­ised real es­tate. Th­ese are detri­men­tal to planned growth of our cities.

Large-scale ur­ban de­vel­op­ments – the only way to cre­ate af­ford­able hous­ing in the re­quired mag­ni­tude in our ma­jor cities –are be­com­ing in­creas­ingly dif­fi­cult due to lack of land parcels, con­gested tran­sit routes, lack of fi­nance, ris­ing in­put costs and reg­u­la­tory hur­dles.

If we take a bird’s-eye view of the prob­lems plagu­ing this sec­tor, the vi­sion of Hous­ing for All by 2022 be­comes a hazy one at best. It is vi­tal that th­ese is­sues are ad­dressed on a pri­or­ity ba­sis so that a com­pre­hen­sive frame­work can be es­tab­lished for en­sur­ing the de­vel­op­ment of af­ford­able hous­ing.

On analysing the bot­tle­necks that cur­rently hold af­ford­able hous­ing in In­dia to ran­som, it emerges that any ap­proach to­wards a work­able so­lu­tion will have to en­com­pass th­ese func­tions.

guide­lines for iden­ti­fy­ing right ben­e­fi­cia­ries: It is im­por­tant to for­mu­late guide­lines that will iden­tify the ap­pro­pri­ate ben­e­fi­cia­ries for af­ford­able hous­ing projects. This is crit­i­cal, as the in­volve­ment of spec­u­la­tive in­vestors in such projects de­feats the whole pur­pose. The Na­tional Pop­u­la­tion Reg­is­ter and is­suance of unique iden­ti­ties via the Unique Iden­ti­fi­ca­tion Au­thor­ity of In­dia will be­come cru­cial el­e­ments in iden­ti­fy­ing the right ben­e­fi­cia­ries if they are linked with in­come lev­els.

on mi­cro-mort­gage fi­nanc­ing mech­a­nisms to en­sure a larger reach: Ef­fec­tive fi­nanc­ing through mi­cro-mort­gages by util­is­ing the reach of self-help groups (SHGs) and other in­no­va­tive fi­nanc­ing mech­a­nisms can en­sure that hous­ing fi­nance is avail­able to large sec­tions of lower in­come groups (LIG) and eco­nom­i­cally weaker sec­tions (EWS). Flex­i­ble pay­ment mech­a­nisms should be put into place, as house­holds in low-in­come groups typ­i­cally have vari­able in­come flows.

devel­op­ers to en­ter af­ford­able hous­ing seg­ment: Ur­ban lo­cal bod­ies can de­velop guide­lines by giv­ing free sale ar­eas, ex­tra floor space in­dex (FSI) and other pol­icy-level in­cen­tives to real es­tate devel­op­ers, thereby at­tract­ing them to de­velop af­ford­able hous­ing. Schemes for re­de­vel­op­ment and slum re­ha­bil­i­ta­tion should be de­vel­oped with in­cen­tives that gen­er­ate suf­fi­cient re­turns for the devel­op­ers, while si­mul­ta­ne­ously con­trol­ling the de­vel­op­ment den­sity.

A cost- ben­e­fit anal­y­sis of reg­u­la­tions should be car­ried out from a de­vel­op­ment per­spec­tive to en­sure that schemes to fa­cil­i­tate af­ford­able hous­ing de­vel­op­ment are ac­tu­ally re­al­is­tic and fea­si­ble.

land records to im­prove plan­ning and util­i­sa­tion of land: Ad­e­quate avail­abil­ity of land for hous­ing and in­fras­truc­ture can be en­sured by com­put­er­i­sa­tion of land records, use of geo­graph­i­cal in­for­ma­tion sys­tems, ef­fi­cient dis­pute re­dres­sal mech­a­nisms and im­ple­men­ta­tion of master plans. The cen­tral govern­ment and some state govern­ments have al­ready be­gun work on this front, but there is still a lack of re­quired pace.

mass hous­ing z o n e s i n c i t y ma s t e r plans: Ad­di­tion­ally, en­sure that th­ese zones are de­vel­oped within a pre-de­ter­mined sched­ule, ac­count­ing for the fu­ture re­quire­ment of af­ford­able hous­ing. Some cities have al­ready ded­i­cated zones for de­vel­op­ment of af­ford­able hous­ing in their master plans. This needs to be repli­cated in other cities and towns – with a sharp fo­cus on de­vel­op­ment time­lines.

well- re­searched rental hous­ing schemes in ur­ban ar­eas: Au­thor­i­ties like the Mum­bai Metropoli­tan Re­gion De­vel­op­ment Au­thor­ity (MMRDA) have ex­per­i­mented with rental hous­ing schemes in the past. How­ever, th­ese have not been very suc­cess­ful as a proper frame­work for such schemes was miss­ing. The most vis­i­ble lim­i­ta­tions were that de­vel­op­ment of rental hous­ing took place in farflung ar­eas which are not suitable for af­ford­able hous­ing, and the lack vi­able means to iden­tify the right end-users.

poli­cies for greater par­tic­i­pa­tion from pri­vate sec­tor: The pri­vate sec­tor can play a big role in af­ford­able hous­ing, most no­tably in terms of pro­vid­ing tech­no­log­i­cal so­lu­tions, project fi­nanc­ing and de­liv­ery. Dis­rup­tive in­no­va­tions on th­ese fronts, with a spe­cific fo­cus on af­ford­able hous­ing, are the need of the hour. We need imag­i­na­tive, work­able so­lu­tions to re­duce the costs of con­struc­tion in the face of ris­ing in­put costs. As con­struc­tion costs ac­count for a sig­nif­i­cant por­tion of the sell­ing price of af­ford­able hous­ing units, sav­ings ac­crued on the back of such in­no­va­tions can im­mensely ben­e­fit the oc­cu­pier. The author is chair­man and country head, JLL In­dia

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Ur­ban lo­cal bod­ies can give free sale ar­eas and ex­tra floor space in­dex (FSI) to realty devel­op­ers for de­vel­op­ing af­ford­able hous­ing projects.

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