What is Affordable Housing? Housing units which fulfill the affordability standard at a given location or time are known as the affordable housing. Definition of affordable housing in India changes with the location at every square kilometer and hence defining the affordable housing in India is very difficult.CREDAI and KPMG have defined affordable housing in a broad sense based on three key parameters affordability, income level and size of a housing unit. Affordable houses are mostly made for low level and mid level income groups with lowering sizes of housing units to achieve affordability accordingly.The sizes of the affordable housing units mostly vary between 300 sq ft to 1200 sq ft and they can cost you somewhere around Rs. 1.5 lakh to 10-12 lakh. Low priced housing can also be considered as affordable housing since sizes of such units are even lower than that of the standard affordable units. Low priced units are majorly developed from the poor section or low income group.Current Market ScenarioThe urbanization of the population of India has grown from 27.81 per cent to 31.16 per cent of the total population of India. The growing population in the urban areas has increased the problems of land shortage, housing shortfalls. The housing stock in the urban areas is very low compared to the population of India living in urban areas and as a result people are living in slums and congested settlements. The growing prices and shortage of land have deteriorated housing conditions for the economically weaker groups of the society.With increased employment opportunities in urban areas, lots of people are migrating to the urban cities. With the increase in population in the urban cities, the demand for housing units has also risen exponentially. The available land for the development in urban areas is running out, resulting into the shortage of land for future developments.Developers and builders developing residential projects are mostly targeting the luxury, high-end, and upper-mid housing segments as it gives premium business compared to that of low-income housing segments. Developers and builders have to maintain their status in the market in order to survive the current market competition hence they are opting for high-end developments for better returns.The major population of India comes falls in the middle income and lower income groups. The available supply for these groups is very low and the ratio of the shortage and the availability will increase with time. The housing for the poor section of the society is mainly provided by the Government of India, but the requirement of the affordable housing in the market is neglected by developers as well as Government.Need for Affordable HousingIncreasing urbanization and population rise in the middle class segment due to the rise of income levels are the main demand drivers for affordable housing in India. India’s urban population is increasing at a faster rate than that of the total population growth. Migration of the people to urban areas into the middle income groups directly affects the affordable housing demand of the urban areas. Better lifestyles and much easier work methods, more and more people are getting attracted towards the urban areas.In 2001 census, the count of total homeless population living in urban areas stood at 7, 78,599. Income of the people and affordability is directly proportional to one another. People with higher incomes can afford to purchase new houses with higher amounts but for the low income groups affordable housing is the only available option while buying new house. The employment opportunities in the urban areas are increasing with the growth in the industrial and IT sector which is leading to the vast amount of mid income people living in the urban areas. The increase in the population results into more housing requirements.Problems in Developing Affordable Housing Affordable housing development in India has to face several economic, regulatory and urban challenges such as lack of available land, fluctuating construction costs etc.The lack of availability of land is the biggest issue in the construction of affordable housing projects. The shortage of land is causing major development shifts in the urban areas towards the peripheral locations. Such peripheral developments have to go through various problems like low connectivity to major parts of the city and lack of planning in those parts.Government authorities have major control over the land parcels in the urban areas as they were reserved for the future infrastructure developments in the urban areas. Such reserved land parcel by Government can support affordable housing development if used properly. Land registration, mutation charges and taxes can also amount for the land costs. Developers and builders have to go through many authorities and departments for project approvals. The process of project approval is very lengthy.In such cases, the delay caused by the project approval process can result in increased project cost. The affordable housing projects will never digest such increased project costs.Other than the land cost, construction costs also have a significant stake in the affordable housing developments. Construction cost of the projects form the major portion of the selling cost. In case of affordable housing, the construction cost can amount to nearly 50-60 per cent of the selling cost. The increase in the construction cost can be attributed to many aspects like increasing labor charges, construction material prices like steel, cement, and sand etc. The shortage of construction labors can also result in an increase in the labor charges.Banks and financial institution are the major finance options while developing the residential projects for the developers and builders. Financial institutions and banks easily provide loans and funds to luxurious and high end projects. Such options never favor the affordable housing projects due to the lack of security and returns.Government Initiatives The Government of India has taken many steps to push affordable housing developments in India. Government has formed many housing policies to improve housing policies in India such as the National Housing and Habitat Policy (NHHP), National Housing Policy and 74th Constitution Amendment etc. These initiatives have helped Indian residential sector and accelerated the flow of housing developments.The Government of India has also taken many initiatives for the expansion of affordable and low cost housing in India.
- National Urban Housing and Habitat Policy (NUHHP), 2007
- Jawaharlal Nehru National Urban Renewal Mission (JNNURM)
- Basic Services for Urban Poor (BSUP)
- Integrated Housing and Slum Development Programme (IHSDP)
- Affordable Housing in Partnership (AHIP)
- Interest Subsidy Scheme for Housing the Urban Poor (ISHUP)
- Rajiv Awas Yojana
- External Commercial Borrowing for Affordable Housing
These schemes have been helping many developers and builders to build affordable housing projects for the urban poor, low and mid incomes groups. The Government has also lowered several norms in External Borrowing for the affordable housing schemes. These Government initiatives are encouraging many developers to go for affordable housing projects.Future of Affordable HousingDevelopment of affordable housing on a large scale basis is the greatest necessity in the urban areas. The increasing urban population and Government initiatives will be of great help for the development of affordable housing in the country. The future demand for affordable housing will also increase with urbanization. Affordable housing will witness a boom once current issues faced by the affordable housing sector are resolved. The Government of India is also trying to encourage builders and developers to undertake the construction of affordable housing units. Many Developers have approached the Government to use its policies for affordable housing. In future, affordable housing will be the major key contributor to the growth of the Indian real estate sector.займ на карту без отказов круглосуточновзять кредит онлайн