AFFORDABLE HOUSING IN INDIAAN INCLUSIVE APPROACH TO SHELTERING THE BOTTOM OF THE PYRAMID

Submitted to : ms vijaya

Submitted by:B.PRAMOD KUMAR10011BAO25B.TECH(PLG),VI SEMJNA&FAU,SPA

RESEARCH BY:Jones Lang LaSalleYEAR:2012

AFFORDABLE HOUSING IN INDIAUrbanisation and Housing Shortage in India.

As per 2011 census, the country had a population of 1,210.98 million, out of which, 377.10 million (31.16%) lived in urban areas.

During 2001-2011, the urban population

of India grew at a CAGR of 2.8%, resulting

in the increase in level of urbanisation from

27.81% to 31.16%.

This growing concentration of people in urban areas has led to problems of land shortage, housing shortfall and congested transit and has also severely stressed the existing basic amenities such as water, power and open spaces of the towns and cities.

AFFORDABLE HOUSING IN INDIA According to the 2011 census, the housing stock in urban India

stood at 78.48 million for 78.86 million urban households.

Urbanisation has resulted in people increasingly living in slums and

squatter settlements and has deteriorated the housing conditions of

the economically weaker sections of the society.

According to estimates of the Technical Group constituted by the Ministry of Housing and Urban Poverty Alleviation (MHUPA), the urban housing shortage in the country at the end of the 10th Five-Year Plan was estimated to be 24.71 million for 66.30 million households.

The group further estimated that 88% of this shortage pertains to houses for Economically Weaker Sections (EWS) and another 11% for Lower-Income Groups (LIG).For Middle- and High-Income Groups (MIG and HIG), the estimated shortage is only 0.04 million.

AFFORDABLE HOUSING IN INDIA

Source: Report of the Technical Group (11th Five Year Plan: 2007-12) on Estimation Of Urban Housing Shortage.

INFERENCE: housing percentage shortage in EWS is 99.9 % which is double than the estimated number of households.Where as in HIG and MIG it is so less 0.2% only.

AFFORDABLE HOUSING IN INDIAAffordable Housing Defined:

There is no clear-cut definition of the term ‘affordable’, as it is a relative concept and could have several implied meanings in different contexts.

According to the RICS Report on Making Urban Housing Work in India, affordability in the context of urban housing means provision of ‘adequate shelter’ on a sustained basis, ensuring security of tenure within the means of the common urban household.

According to the Task Force on Affordable Housing set up by

the MHUPA in 2008, affordable housing for various segments is

defined by size of the dwelling and housing affordability derived by

the household income of the population

AFFORDABLE HOUSING IN INDIADefinition of Affordable Housing – MHUPA (2011)

According to the KPMG Report on ‘Affordable Housing – A Key Growth Driver in the Real Estate Sector’, affordable housing is defined in terms of three main parameters, namely income level, size of dwelling unit and affordability.

AFFORDABLE HOUSING IN INDIAJones Lang LaSalle’s Definition of Affordable Housing. Minimum volume of habitation.

Provision of basic amenities.

Cost of the house.

Location of the House.

ISSUES IN THE DEVELOPMENT OFAFFORDABLE HOUSING

Developing affordable housing in Indian cities faces significant

challenges due to several economic, regulatory and urban issues.

Excessive Control on Development of Land Creates Artificial

Shortage.

Lack of Marketable Land Parcels.

Titling Issues and Lack of Information.

Rising Threshold Costs of Construction.

Lack of Access to Home Finance for Low-Income Groups.

ISSUES IN THE DEVELOPMENT OFAFFORDABLE HOUSINGRegulatory Constraints

Lengthy Approval and Land Use Conversion Process

The process of real estate development is particularly affected by

the efficiency of urban local bodies, which undertake city planning,

deliver utility services and regulate controls on development through

approvals.

India is ranked 177 out of 183 countries with respect to dealing with construction permits2, which indicates the challenge developers face in India in development of real estate.

Lack of Clarity in Building Bylaws and Guidelines.

Continuation of Archaic Laws

ISSUES IN THE DEVELOPMENT OFAFFORDABLE HOUSING

Multitude of Statutory Approvals adds 2-2.5 Years to the Pre-Construction Process

INFERENCE:construction process of statutory approvals adds 2-2.5 years in india

POLICY FRAMEWORK ANDREGULATIONS FOR AFFORDABLEHOUSINGCentral Level Schemes

National Urban Housing and Habitat Policy (NUHHP), 2007

Jawaharlal Nehru National Urban Renewal Mission (JNNURM)

Basic Services for the Urban Poor (BSUP)

Integrated Housing and Slum Development Programme.

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP).

Rajiv Awas Yojana.

THE PRIVATE PLAY TOAFFORDABLE HOUSING IN INDIA

MAJOR HUBS OF AFFORDABLE HOUSING DEVELOPMENT

Location of Projects and Their Distance from City Centre

Mumbai and NCR have affordable housing projects located 65–75 km away from the city centre. On the other hand, Ahmedabad and Kolkata provide better proximity, with projects located at a distance of 15–20 km from the city centre.

Bangalore, Pune and Chennai also have projects after a distance of 25–30 km from the city centre.

Major Developers in the Segment

Amongst the developers, Tata Housing (Shubh Griha) and VBHC are

entirely focused on low-income affordable housing and have already

launched multiple projects across cities.

Mahindra Lifespaces, TVS Housing

INCOME LEVELS AND HOUSINGAFFORDABILITY

Disposable Surplus for House Purchase in Various Income Groups

INFERENCE:percentage of surplus of income is high when compared with others.

SENSITIVITY OF RENT AS PERCENTAGE OF INCOME FORPERSONS OF VARIOUS INCOME GROUPS

INFERENCE:rent as a percentage of income is less for income group 2-3 lakhs and it is high in income groups income 1000000 more.

DEMAND-SUPPLY DYNAMICS OF HOUSING FOR VARIOUSINCOME GROUPS

Source: john lang lasalla Research

INFERENCE:Share of demand is high for income group 2-3 lakhs per annum and supply is low when compared to other income groups.

HOME LOAN DISBURSALS BY HOUSING FINANCE COMPANIES (HFCS)

INFERENCE:The home loan for above 10 lakhs is more every year.

ESTIMATED CONSTRUCTION COSTS FOR LOW-INCOME HOUSING

INFERENCE:for one sq ft ,the selling price will be Rs 1,400 to 1,700.

The Landscape of Affordable Housing Development (units priced < INR 10 Lakhs) in Major Indian Cities

MAJOR HUBS OF AFFORDABLE HOUSING DEVELOPMENT

INFERENCE: distance from centre of the city plays an important role creating affordable housing hubs .

INSTITUTIONAL APPROACH TOWARDS AFFORDABLE HOUSING

NEWS PAPER ARTICLES

MHADA joins hand with private developers.

Activities of affordable housing by NGO.

CONCLUSION

Historically, housing for the poor and the economically weaker sections of the society ( EWS) has been provided by the government under various welfare schemes.

Nevertheless, this is insufficient compared to the existing shortage in the segment," says report on urbanization and housing shortage in India by Jones Lang LaSalle India.

The main reasons for rise in shortage in affordable housing on the supply side is lack of availability of urban land, rising construction costs and regulatory issues while lack of access to home finance for low income groups are constraints on the demand side.