A study on Affordable Housing projects in India (by Manpreet Singh)

Basic Study of Affordable Housing Projects in India

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Table of Content
1. Introduction………………………………………………………………………………03
2. Definition of Affordable Housing………………………………………………………..03
3. Income Levels and Housing Affordability………………………………………………03
4. Critical Issues in the Affordable Housing Sector………………………………………..04
5. Policies and Regulations in India………………………………………………………..04
6. Affordable Housing Development: Private Sector and PPP initiatives………………….05
7. Market Map for Affordable Projects…………………………………………………….10
8. List of some of the affordable housing projects across India……………………………11
9. Comparison of various projects………………………………………………………….12
10. Property Price Trends in Bangalore……………………………………………………...14
11. Laws, Rules and Regulations…………………………………………………………….15
12. Direct and indirect taxes imposed on real estate development…………………………..15
13. References………………………………………………………………………………..16

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Introduction
The strained urban infrastructure, in particular housing, has provided an opportunity for the real
estate developers in India to fill the urban rural gap and provide housing for all in the coming
decade.
In this context, it would be important to address the need in the EWS (economically weaker
sections) and LIG (lower income groups), which currently account for 95.6% percent of urban
housing shortage in the country. Amid the growth of urbanization, the housing shortage in India
has touched 18.78 million units. One reason for this is that most builders are catering only to the
middle income and affluent population in India and home prices have gone beyond the reach of
many.
Definition of Affordable Housing
Affordable housing refers to housing units that are affordable by that section of society
whose income is below the median household income.
Affordable Houses
Dwelling Units (DUs) with Carpet Area shall be between 21 to 27 Sqm for Economically
Weaker Section (EWS) category, 28 to 40 Sqm for Lower Income Group (LIG) category (LIG-
A: 28-40 Sqm and LIG-B 41- 60 Sqm) and 41 to 60 sqm for Middle Income Group (MIG)
Affordable Housing Vs Low Cost Housing
Affordable housing cuts across LIG and MIG income segments of the society make good
economic sense. The typical size varies from 300 sq. ft. - 800 sq. ft.
Low-cost housing, on the other hand, is less expensive than average or than what one can afford.
Low-cost housing in general could be defined as housing meant for EWS category. Typical area
is less than 300 sq ft per unit.
Income Levels and Housing Affordability
Category Income
level
Size of
dwelling unit
Provision of
Basic Amenities
Affordability Location of
the House
EWS Less than
Rs. 1.5 lakh
per annum
Upto 300 sq ft -Sanitation,
adequate water
supply and power
- Provision of
community spaces
and amenities
such as parks,
schools,
healthcare
facilities
EMI to
Monthly
income: 30 to
40 percent
Reasonable
maintenance
costs
-located
within 20km
of major
workplace
hub in the
city
-adequately
connected to
major public
transport
system
LIG-A,
B
1.5 lakh and
3 lakh per
annum
300 sq ft to
600 sq ft
MIG 3 lakh and
10 lakh per
annum
600 sq ft to
1200 sq ft

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The relationship between income and affordability for various income groups follows a nonlinear
trend. The current annual income level of EWS (upto INR 1 lakh) and LIG households (INR 1
to 2 lakh) may not be sufficient to afford a house (EWS and LIG houses are generally in the
range of INR 5 to 7 lakh and INR 15 to 20 lakh respectively). The issue is further deepened due
to low access to credit by these segments. According to estimates, a EWS household can afford a
house costing up to INR 4 lakh and LIG households can afford houses priced up to INR 8 lakh.
Empower EWS/LIG households with subsidies, lower loan interest rates and micro financing.
Critical Issues in the Affordable Housing Sector
 Land costs are too high in the urban areas and often constitute more than 50% of the project
for the developer, which makes affordable housing projects unviable
 Construction costs also form a major portion of the project cost and the profit margins for
developers is very less in the affordable segment as compared to luxury projects
 People who belong to LIG and EWS segments have little access to organized finance
 Requirement for focused government policies that enable and incentivize the affordable
housing segment such that it becomes more lucrative for developers to build affordable
housing projects
Interest subsidy on affordable housing loan
The central government currently provides interest subsidy of one percent on INR 1 lakh
housing loan to LIG and EWS household borrowers. The limit in this scheme is very low and
ineffective as the minimum price of a EWS house is about INR5 lakh.
Policies and Regulations in India
Several policies adopted by Central Government have assisted in the delivery of affordable
housing for the EWS, LIG and lower MIG.
 National Urban Housing Mission (NUHM), 2015: The Mission would initially cover 500
Class I cities and will be spread across 3 phases (2015-2022).

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a) Slum rehabilitation of Slum Dwellers with participation of private developers using land as a
resource- The Centre would provide a grant of INR 1 lakh per house to the state for deployment
in the development of any slum rehabilitation project
b) Promotion of affordable housing for weaker section through credit linked subsidy - An
interest subsidy of 6.5% on housing loans will be provided to EWS/LIG categories, which can
be availed up to a tenure of 15 years. It will cover all the 4,041 statutory census towns from the
beginning.
c) Affordable housing in partnership with Public & Private sectors - Central assistance at the
rate of INR 1.5 lakh per house for the EWS category to be provided.
d) Subsidy for beneficiary-led individual house construction or enhancement- Central assistance
at the rate of INR 1.5 lakh per house for the EWS category will be provided
 National Urban Housing and Habitat Policy (NUHHP), 2007
 Jawaharlal Nehru National Urban Renewal Mission (JNNURM)
 Rajiv Awas Yojana
 Affordable Housing in Partnership (AHIP): Central support is provided at the rate of Rs.
75,000 per Economically Weaker Sections (EWS)/Low Income Group (LIG) Dwelling Units
(DUs) of size of 21 to 40 sqm. in affordable housing projects taken up under various kinds of
partnerships including private partnership. A project size of minimum 250 dwelling units is
eligible for funding under the scheme.
 Housing for All by Year 2022: The Government has rolled out “Housing for All by 2022”
aimed for urban areas with following components/options to States/Union Territories and
cities:-
• On site rehabilitation of Slum Dwellers using land as a resource through private partnership
wherever possible
• Promotion of affordable housing for weaker section through credit linked subsidy (interest
subvention)
• Affordable housing in partnership with Public & Private sectors
• Promotion of housing for urban poor by assisting beneficiary led construction
Affordable Housing Development: Private Sector and PPP initiatives
Depending on the decay of land prices, cities offer parcels for such developments at different
distances from the city centre. Mumbai and NCR- Delhi have the modern affordable housing
projects located 55–135 km away from the city centre. On the other hand, Hyderabad provides
better proximity, with projects located at a distance of 15–20 km from the city centre. Bangalore,
Pune, Kolkata and Chennai also have projects after a distance of 20–45 km from the city centre.

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1) Rajasthan affordable housing public-private-partnership (PPP) model (2013)
The policy facilitated construction of about 2.35 lakh houses in 77 cities across Rajasthan, of
which 2.1 lakh units were given possession by December 2013. Housing units with market price
of INR1,500 per sq ft were offered at a cost of INR 850 per sq ft for EWS/LIG category and
INR1,000 per sq ft for MIG. Typical flat cost: EWS is INR2.4 lakh; LIG is INR3.75 lakh;MIG is
INR7 lakh.
Category Market Price per sq ft Offered Price per sq ft Flat Cost
EWS Rs. 1,500/- Rs. 850/- Rs. 2,40,000/-
LIG Rs. 1,500/- Rs. 850/- Rs. 3,75,000/-
MIG Rs. 1,500/- Rs. 1000/- Rs. 7,00,000/-
2) Supertech Basera at Sector-79 Gurgaon (2014)
Supertech Basera is located at Sector 79, 79 B of Gurgaon Manesar Urban Complex, it spread
over the area of 12.10 acres, offering 1BHK and 2BHK luxury apartments. Supertech Basera is
an initiative of Supertech Group under Central government ‘Housing for All by 2022’ Scheme.
The project comprises of 1976 flats of which 95% are available for general public and
remaining 5% flats are served for management quota.
Type Area (sq ft) Total Unit Cost
1 BHK 404 Rs. 12,87,000/-
2 BHK 546 Rs. 19,28,500/-
3) Asha 2022 at Sector 14, Panchkula, Haryana (2016)
Asha 2022, affordable housing project by Essel group, comprises of 800 housing units of 2BHK
and 3BHK type. Under the scheme, the super area of 2BHK flats is around 1060 square feet
while for 3 BHK the super area is 1345 square feet.
Category Saleable area (in sq ft) Basic Sale Price (per sq
ft)
Basic Sale
Price Amount
2 BHK 1060 Rs. 1,521/- Rs. 16,12,260/-
2 BHK (corner unit
or park facing unit)
1060 Rs. 1,621/- Rs. 17,18,260/-
2 BHK (corner unit
+ park facing unit)
1060 Rs. 1,721/- Rs. 18,24,260/-
3 BHK 1345 Rs. 1,521/- Rs. 20,45,745/-
3 BHK (corner unit
or park facing unit)
1345 Rs. 1,621/- Rs. 21,80,245/-
3 BHK (corner unit
+ park facing unit)
1345 Rs. 1,721/- Rs. 23,14,745/-

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4) Shubh Griha project by Tata Housing at Boisar near Mumbai (2010)
 Total no. of units: 1300
 Starting price of Rs. 3.9 lakh for approximately Rs.1,400/- per sq ft
 Low cost units- 360 sq ft to 465 sq ft
 2/3 BHKs- upto 1,360 sq ft
5) Happinest Project by Mahindra Lifespaces at Boisar (Mumbai) and Avadi (Chennai)(2014)
a) Happinest Boisar (Mumbai):
Happinest, Boisar is located in Boisar, near MMR (Mumbai Metropolitan Region). The project is
spread over approximately 13.5 acres and comprises of 800+ apartments, 1 RK and 1 & 2 BHK
between 351 sq ft and 695 sq ft in the price range of Rs 9.1 Lakh to Rs 17.5 Lakh
Unit type Area Sale Price
1 RK 351-369 sq ft Rs. 9.1 lakh
1 BHK 522-540 sq ft
2 BHK 675-695 sq ft Rs. 17.5 lakh
b) Happinest Avadi (Chennai):
Happinest, Avadi is located off Poonamallee Avadi High Road. The project is spread over
approximately 5 hectares and comprises of 1268 apartments, 1 & 2 BHK.
(To finance the Happinest customers whose average monthly income is Rs 20,000 to 40,000, the
company is tying up with few housing finance companies like micro homefinance
companies such as Muthoot, Mahindra Finance and Inventure.)
1 BHK compact 396 sq ft Rs. 9.1 lakh
1 BHK regular 533 sq ft
2 BHK regular 677 sq ft Rs. 17.5 lakh
6) LIG Surya City at Suryanagar, Chandapura, Bangalore South(2007)
2 BHK 650-700 sq ft Rs. 16.71 lakh- Rs. 18 lakh
3 BHK 1760 sq ft Rs. 45.26 lakh
7) Sipani Bliss by Sipani Builders at Chandrapura, Bangalore South(2014)
2 BHK 875-922 sq ft Rs. 22.31 lakh- Rs.23.51 lakh

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8) Shapoorji Pallonji Shukhobrishti at Rajarhat Kolkata (2011)
2 BHK 640-650 sq ft Rs. 16 lakh- Rs. 16.25 lakh
9) VBHC Vaibhava at Chandapura Anekal road, Bangalore(2014)
10)Janaadhar Shubha at Anekal, Bangalore (2010)
1 BHK 615-656 sq ft Rs. 14.76 lakh- Rs. 15.74 lakh
11)Annai Atulya at Kilkattalai, Chennai (2013)
1 BHK 274 sq ft NA
2 BHK 620 sq ft NA
12)Anandgram by Vastushodh, Pune(2011)
Unit type Area Price per sq ft Sale Price
1 RK 353 sq ft Rs. 1,600/- to Rs.
1,800/-
Rs. 5.7 lakh
1 BHK 415-450 sq ft Rs. 9.8 lakh
2 BHK 614-800 sq ft Rs. 17.4 lakh
13)Navjivan by Foliage Group, Ahmedabad(2010)
Unit type Area Price per sq ft Sale Price
1 RK 297-378 sq ft Rs. 1,005/- to Rs.
1,406/-
NA
1 BHK 459-612 sq ft Rs. 10.5 lakh
2 BHK 630-729 sq ft Rs. 13.5 lakh

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14)Bangalore Development Authority (BDA) Housing projects 2016

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Market Map for Affordable Projects

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List of some of the affordable housing projects across India
List of some of the affordable housing projects across India
AHMEDABAD, GUJARAT PUNE, MAHARASHTRA
Om Shanti Nagar 2, Santosh Anandgram, Vastushodh Projects
Associates Shalini Lakeview, Trishul Builders
Navjivan Housing, Foliage BHIWADI, RAJASTHAN
Gokul Galaxy, Galaxy Developers Avalon Homes, Avalon Group
New Maninagar Apartments, Dev City, Arun Dev Builders
Dharmadev Builders BAWAL, HARYANA
Umang Lambha, DBS Affordable Home Ashray Homes, Surefin Builders
Strategy MEERUT, UP
Karnavati Apartment, Shree Ram Spice Homes
Developers NAGPUR, MAHARASHTRA
MUMBAI, MAHARASHTRA Shridhar Empire AC,
Swarajya, Neptune Group Shridhar Buildcon
Samruddhi Complex, Poddar Housing BANGALORE, KARNATAKA
TMC, Matheran Realty Vaibhava, VBHC
Pink City and Star City, Rashmi Housing Shubha, Janaadhar
Shubh Griha, Tata Housing CHENNAI, TAMIL NADU
Karjat Land Developers Atulya, Annai Builders
Sathya Nagar, Conglome Techo Construction
Lok Amber, Lok Group
Vaishnavi Sai Complex, Shubh Aangan
Valram Vatika and Valram Ashish

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Comparison of various projects
S.
No.
Project Name Location Unit
Type
Area (in
sq ft)
Price per sq
ft (in INR)
Total Sales
Price (in INR)
1 Rajasthan AHP Rajasthan EWS 282 Rs. 850/- Rs. 2,40,000/-
LIG 411 Rs. 850/ Rs. 3,50,000/
MIG 775 Rs.1,000/ Rs. 7,75,000/
2 Supertech Basera Sector-79,
Gurgaon
1 BHK 404 Rs. 3,185/- Rs. 12,87,000/-
2 BHK 546 Rs. 3,531/- Rs. 19,28,000/-
3 Asha 2022 Sector-14,
Panchkula
2 BHK 1060 Rs. 1521/- Rs. 16,12,260/-
3 BHK 1345 Rs. 1521/- Rs. 20,45,745/-
4 Shubh Griha,
TaTa Housing
Boisar near
Mumbai
1 BHK 283-465 Rs.3989/- Rs. 11,32,000/--
.18,60,000/-
2 BHK 1360 Rs. 1735/- Rs. 23,60,000/-
5 Happinest Project
by Mahindra
Lifespaces)
Boisar
(Mumbai)
Avadi
(Chennai
1 RK 351-369 Rs. 2466/- Rs. 9,10,000/-
2 BHK 675-695 Rs. 2592/- Rs. 17,50,000/
1 RK 396 Rs. 2297/- Rs. 9,10,000/
2 BHK 697 Rs. 2510/- Rs. 17,50,000/
6 LIG Surya city Chandapura,
Bangalore
2 BHK 650-700 Rs. 2583/- Rs. 16,79,000/-
-Rs.18,00,000/
3 BHK 1760 Rs. 2571/- Rs. 45,26,000/-
7 Sipani Bliss Chandapura
Bangalore
1 BHK 530 Rs. 2547/- Rs. 13,50,000/-
2 BHK 875-922 Rs. 2549/- Rs. 22,31,000/--
Rs.23,51,000/
3 BHK 1275-
1382
Rs. 2549/- Rs. 32,51,000/--
Rs. 35,24,000/
8 SP Shukhobristhi Rajarhat
Kolkata
1 BHK
2BHK
500
640-650
Rs. 2500/-
Rs. 2500/-
Rs. 12,50,000/-
Rs. 16,00,000/-
-Rs. 16,25,000/
9 VBHC Bangalore 1 BHK
2 BHK
3BHK
351
614
961
Rs. 3000/-
Rs. 3000/-
Rs. 3000/-
Rs. 10,53,000/-
Rs. 18,42,000/-
Rs. 28,83,000/-
10 Janaadhar Shubha Bangalore 1 BHK 615-656 Rs. 14,76,000/-
-Rs. 15,74,000/
11 Anandgram,
Vastushodh
Pune 1 RK 353 Rs.1,600/- to
Rs. 1,800/-
Rs. 5,70,000/-
1 BHK 415-450 Rs. 9,80,000/-
2 BHK 614-800 Rs. 17,40,000/-
12 Navjivan, Foliage Ahmedabad 1 RK 297-378 Rs.1,005/- to
Rs. 1,406/-
NA
1 BHK 459-612 Rs. 10,50,000/-
2 BHK 630-729 Rs. 13,50,000/-

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Graph 1: Price per sq ft vs Total Sales Price
Inference- in the price per sq ft range 2549 to 2592, total sales price reaches a maximum and the
declines
Graph 2: Area vs Total Sales Price
Inference- total sales price increases with the increase in area other than a few minimas at point
480 and 820
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
5000000
Total Sales Price (in INR)
Total Sales Price (in
INR)
x-axis: Price per
sq ft (in INR)
y-axis: Total Sales
Price (in INR)
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
5000000
Total Sales Price (in INR)
Total Sales Price (in
INR)
x-axis: Area (in sq ft)
y-axis: Total Sales
Price (in INR)

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Property Price Trends in Bangalore (source- www.makaan.com)
Inference- the price per sq ft in the Bangalore region has been steady in the range of Rs.2,258
per sq ft to Rs. 2,758 per sq ft from last 6 months
Inference- the price per sq ft in the Bangalore central region is maximum and the maximum
appreciation has been in Bangalore west region till march’16

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Laws, Rules and Regulations
Direct and indirect taxes imposed on real estate development
A key area of consideration in affordable housing could be through a set of concessions related
to taxes and fees. It is estimated that taxes and fees account for about 30 to 35 per cent of
housing cost.
S. No. Tax Percentage of property cost
1 Developer agreement stamp duty 5
2 Stamp duty on purchase of property 5
3 Registration 1
4 Value added tax 1
5 Service tax 2.6
6 Swachh Bharat Cess 0.09
7 VAT to contractor 4
8 Other levies 2.6
9 Excise and custom duty 15
Total (approx) 35
•Indian registration act, 1908
•Various state legislations
Land Title
•Land revenue acts by all state governments
•Town and country planning acts by all state governments
•Master plans development plans
Planning and Land
•National building code, 2005
•Local building bye-laws
Construction of buildings
• Environment impact assesment (EIA) Notifications S.O. 1533 (2006)
• Ancient monuments and archaeological sites and remains Act, 1958
• Work of defense Act, 1903 (WDA)
• Environment (Protection) Act, 1986
• Forest conservation Act, 1980
NOC from Central government
•Water (prevention & control of pollution) Act, 1974 and Air
(prevention & control of pollution) Act, 1981
NOC from State governement
•Water connection
•Sewerage connection
•Gas connection
•Telecom connection power/electricityconnection
Service Installations

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References
1. Affordable housing in India by JLL - http://www.joneslanglasalle.co.in/india/en-
gb/Research/Affordable_Housing_in_India_2012.pdf?27e6f554-2aa8-4864-8bc3-
9127a4b902bc
2. Affordable housing- a key growth driver in the Real Estate Sector by KPMG -
http://www.kpmg.com/IN/en/IssuesAndInsights/ThoughtLeadership/Affordable_Housing
.pdf
3. http://www.asiapacific.joneslanglasalle.com/india/Affordable-Housing-ICC.pdf
4. http://www.masterplansindia.com/tag/new-housing-schemes
5. http://www.bdabangalore.org/
6. http://pmindia.gov.in/en/news_updates/housing-for-all-by-2022-mission-national-
mission-for-urban-housing/
7. http://www.moneycontrol.com/master_your_money/stocks_news_consumption.php?cat=
realestate&autono=754305
8. http://pricetrends.makaan.com/price-trends-for-renting-property-in-bangalore-
all/?mc=M3

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