Affordable housing needs people’s perspective

Ankur Dhawan

Is affordable housing really driving the Indian real estate market? Let’s look at data to find out. While the overall supply of affordable housing units priced under Rs25 lakh in the nine major cities in India has gone up from 27 to 31 per cent in the past three years, research reveals that the consumption of these units has remained more or less stagnant.

During 2017, almost every second unit purchased by homebuyers in Gurugram was in the budget below Rs25 lakh. At the same time, cities such as Bengaluru and Hyderabad witnessed the contribution of affordable housing units as low as 3 and 9 per cent, respectively. Although there is no second thought that the ongoing thrust on affordable housing has brought about a positive change in both supply and demand, the stark contrast in consumption patterns indicates that the mission for 'Housing for All by 2022' still has a long way to go.

Considering high land costs in cities, most of the affordable housing projects today are being constructed in the far-flung areas which are not habitable mainly for reasons like unavailability of sufficient infrastructure and low connectivity. Boisar, Neral in Mumbai, Yamuna Expressway in the NCR, Chandapur in Bengaluru are the case examples here.

Therefore, the buck stops at 'location'. As a potential solution, the government may offer its unused land bank within the cities for these projects under public-private partnership (PPP) mode. Among the other such steps to boost the affordable housing mission on the ground, the move to allow additional floor area ratio (FAR) to affordable housing projects as done by the Haryana Affordable Housing Policy is something that could be replicated by other states.

Nevertheless the lower participation of developers calls for some more rejig in the approach. Apparently, people are not willing to buy low-priced homes by compromising on basic amenities. The same goes with sizes as well. In the recent past, it has been observed that the average sizes of homes have gone down while the configurations have remained the same. In Noida, for instance, the average super area of an apartment has gone down from 1400 sq ft to 1173 sq ft in the past one year. Identical trends have been noticed in the other cities such as Ahmedabad, Gurugram and Mumbai. When all of these factors are put together, it becomes evident that in affordable landscape a homebuyer is not only required to adjust in terms of location and connectivity, but also with size and quality of life. Thus, there is a need to revisit the affordable housing policy from homebuyers' perspective and connect it closely with viability and quality of life.

Last but not the least; assuming that most end-users of affordable housing units belong to the unorganised sector and have unstable and unrecorded sources of income, it needs to be figured out how they would get access to home finance, and take benefits of measures such as the CLSS under the PMAY.

— The writer is Chief Investment Officer, PropTiger.com