Owning a house is not just an Indian dream, but something that is nurtured by people all over the world. However, fast urbanization and increased migration to cities have caused the demand for affordable housing in India to shoot up. The “Housing for All by 2022″ initiative by the Government of India is hence a much needed boost in the affordable housing sector, as it intends to create 50 million houses by 2022. Since it is the economically weaker section of the society that has been hit most by housing shortage, the government has launched two schemes to address the problem, namely Pradhan Mantri Awas Yojana Grameen and Pradhan Mantri Awas Yojana Urban.

What is the current scenario?
As estimated recently, India is facing an approximate shortage of 4 crore houses in its urban and rural areas. Economically weaker sections and low income groups account for almost 96% of this housing shortage. Some factors which have augmented the demand for housing are population growth, fiscal benefits, increased income, higher aspirations levels and the emergence of more nuclear families. The large migrant population in cities is also another prime reason for housing demand. Now, the two Government of India schemes mentioned above have the following 4 components:

  • In-situ slum redevelopment which aims to offer housing to eligible slum-dwellers through the redevelopment of existing slums on public or private land.
  • Credit-linked subsidy scheme which offers easy institutional credit to low income, mid income and economically weaker sections, to reduce house loan and EMI.
  • Affordable housing in partnership, which offers financial aid to private developers, so that they undertake affordable housing projects.
  • Beneficiary-led construction where the central government offers INR 1.5 lakh to each family from economically weaker section to construct or extend an existing house.

Issues facing the affordable housing sector:
Scarcity of marketable land, difficulties in the recycling of land, illegal encroachments and land mafias are some of the biggest concerns in the affordable housing sector. Often, large tracts of land are owned by public entities like ports and railways, leaving insufficient land for mass housing projects.

Also, land rights and acquisition rights are not very well-defined in India. Housing projects take a long time to get sanctioned and the lack of transparency when it comes to building bye laws and development plans, only add to the problem.

Rising construction costs is another challenge in the affordable housing sector, owing to price appreciation of labor and building materials. Obtaining a house loan is also a problem for many, especially those who don’t have income proof or work in the unorganized sector.

What is the way forward?
To achieve the affordable housing dream, the government must join hands with private developers and financial institutions and other stakeholders to chart a sustainable model that works. Interest subsidy and incentive schemes, low cost credit, better regulatory policies and more transparency in land laws can help. Faster approval and clearance of housing projects are also a must.

Apart from that, the use of more eco-friendly and cost-effective building materials can bring down the construction costs and boost the scope of affordable housing. For instance, by replacing clay bricks with cheaper yet robust AAC blocks, not only will the construction cost decrease, but less labor and time will be required.

Hence, it is time to think out-of-the-box and devise innovative ways to provide affordable housing to all. Moreover, such housing projects will create more employment opportunities, especially for migrants, and enhance the GDP, creating a win-win situation for the country as a whole.