Need to merge all policies to address housing shortage
In the last decade, there has been a lot of focus on and interest in green commercial buildings from global and Indian corporates. This increasing interest has led to an accelerated availability of green building products, services and also enthusiasm from builders catering to this segment.
There has also been a significant increase in ‘ green’ growth in the residential segment. There are now investors such as International Finance Corporation, UK government’s Department of International D eve l o p m e n t ( D F I D ) a n d the National Housing Bank involved, which is significantly boosting this segment.
Today, many more Indian developers have understood that green certification can attract more customers and investors, and are aligning themselves with green concepts. However, the supply gap is still quite significant, and there is still a definite need to create a broader spectrum of awareness among end-users.
Another lacuna is on the banking front. Bank loans are an integral factor driving the residential property market, and unless bankers and lending agencies are trained on the benefits and importance of green real estate and insist on such features, we will not see awareness and traction of sustainable properties increase much.
In commercial properties, there needs to be more clarity on who reaps the benefits – the owner or the tenant. In view of this, codes have to be made mandatory. The Energy Conservation Building Code has to be simplified, and the state governments have to ensure that it is made mandatory by all concerned local bodies. The way things are now, local urban bodies do not have the wherewithal for implementation.
Green building concepts, when implemented to the required extent and intent, will help save water through rainwater harvesting and recycling of waste water, and in reaping benefits from the water energy nexus. The compounded annual growth rate of electricity in the residential segment is over 8%. One-third of electricity used in the country is for residential and commercial buildings. Whether it is water or energy, one can easily achieve benefits to the tune of 25% or more.
Green buildings also address the major concern area of waste disposal in most of Indian cities. We already face decreasing availability of landfill sites in these cities, and green buildings with their integrated waste disposal and recycling systems can contribute significantly towards decreasing dependence on them.
Incentives and concessions
Currently, Indian cities that offer incentives and concessions for green building development and use include Kolkata, Noida, Hyderabad and Pune. Examples of such incentives include higher FAR and property tax incentives by Greater Hyderabad Municipal Corporation, the Pune eco-housing programme, etc. Linking property tax to actual performance and mandating a simplified region-specific list will help achieve attain green goals faster and in more cities.
A holistic approach is preferable to a piece-meal approach. The positive impacts will accrue faster when green construction parameters are made mandatory and implemented by all concerned stakeholders like urban local bodies (municipalities and development authorities), builders, owners, tenants, electricity distribution companies, pollution control bodies, water supply and sewerage departments, and state and Central governments.
Rating and certification
Today, there are a number of rating and certifying agencies for green construction existing in India. These include Indian Green Building Council, US Green Building Council (EDGE Program), Green Globes, Eco Housing programme and MNRE’s GRIHA. Almost all of the certification programmes have common elements of focus, and the benefits of savings in energy and water, and using local materials are invariably achieved.
The time is now
There is no question that population growth in most parts of the urbanised and urbanising world is exceeding these areas’ ability t o accommodate i t . Unsustainable growth inevitably leads to environmental changes which, if they cannot actually be reversed, at least must be slowed down. The onus of reducing environmental degradation obviously does not fall solely on the shoulders of sustainable real estate. However, green buildings are definitely an obvious available solution, since designing and building real estate which results in lower emissions is in every developer’s reach today. It is only a question of willingness.
In a massively populated and increasingly populating country like India, the government is already severely challenged in making basic resources like water and electricity available and managing waste. The situation will not improve without proactive intervention, and in fact only worsen. Sustainable real estate can make a significant dent in this resource deficit if it is deployed in the required magnitude.
The union government should try to merge various policies at a point to address housing shortage issue in India, an Assocham- JLL joint study has said.
It suggested that the Pradhan Mantri Jan Dhan Yojana, which mainly targeted lowerend of pyramid, should be used to provide housing finance to people who held bank accounts, thereby directly catering to the targeted segment.
The study titled ‘Affordable Housing Finance in India,’ said economically-weaker sections (EWS) and low-income group ( LIG) categories were generally not given access to loans because of many reasons such as lack of proper documentation, higher credit and default risk, unavailability of guarantor and others.
Besides, i ncome of t his category was either uneven through the year or is below the ‘viable threshold,’ to ensure repayment of loan.
Absence of a developed market for financing home- buying resulted in lacklustre supply because developers of affordable housing faced a slowdown in absorption of constructed units, the study highlighted.
Development of affordable housing has consistently been a challenge because of land cost and availability, practicality of affordable housing definition, complicated regulatory process for approvals and others. “Relaxing the norms specifically for affordable housing segment can boost the depth and width of housing financing market,” suggested the study. Actor Vivek Oberoi has launched an affordable housing project in Shahapur, Maharashtra under the umbrella programme Mission 360. The project will provide affordable housing to more than 15,000 families.
Shahapur is the first affordable housing project of Karrm Infrastructure Pvt Ltd that has a target to construct five lakh apartments within the next three to five years. The company will announce seven more affordable housing projects over the next quarter.
Vivek Oberoi, promoter and partner, Karrm Infrastructure Pvt Ltd says, “Karrm’s affordable housing projects hope to improve the living conditions of the poor and underprivileged families.” The second edition of International Real Estate Expo (IREX) will be held from October 7 to 9, 2016 at Ashok Hotel, New Delhi.
IREX is an annual show that presents investment avenues for high net worth and wealthy individuals who intend to invest in international real estate and premium luxury properties.
IREX 2016 will have participation of leading international real estate developers and marketing companies and is expected to draw more than 5000 visitors. It will present investment opportunities in residential, commercial, retail and leisure sectors. Some major participants are Damac Properties, Al Marjan Island and Rak Properties from UAE among others.