The document discusses affordable housing in India. It defines affordable housing based on income level, dwelling unit size, and affordability (housing costs not exceeding 30% of income). Demand is driven by rapid urbanization and a growing middle class. However, supply faces constraints like high land and construction costs. The government, developers, and financial institutions all have roles to play in increasing affordable housing through measures like subsidies, increased development rights, and loans respectively. Overall 24.71 million housing units are required to fulfill the current shortage, with over 99% of demand from low-income groups. An investment of Rs. 600,000 crore is estimated to meet this need.

1. AFFORDABLE HOUSING

3. size of dwelling unit

5. IS AFFORDABLE HOUSING AND LOW-COST HOUSING THE SAME? Affordable and low-cost housing are often interchangeably used, but are quite different from each other. Low-cost housing is generally meant for EWS category and comprises bare minimum housing facilities while affordable housing is mostly meant for LIG and MIG and includes basic amenities like schools, hospitals and other community facilities and services.

7. DEMAND AND SUPPLY CONSTRAINTS Urbanization: Rising income levels leading to a sizeable middle class segment: Urbanization is an “index of transformation from traditional rural 1 ECONOMIES TO MODERN INDUSTRIAL ONE .” India’s urban population is increasing at a faster rate than its total population. At 28 percent, the pace of urbanization in India has been slower than the average pace of urbanization in Asia. However, the absolute number of people in urban cities and towns has gone up substantially. In India, urbanization can be described as a product of demographic explosion and poverty induced rural-urban migration. This situation has resulted in pressure on urban infrastructure and in an increase in the number of homeless people living on the streets. As per the 2001 census the total urban homeless population was 7, 78,599 people, which would be much more currently given the inadequate availability of 2 affordable / low-cost housing . Demand drivers and supply constraints for affordable housing in India Source: KPMG Analysis

8. Rising income levels leading to a sizeable middle class segment The past few years have seen tremendous economic growth in the country and one of the implementation of one of the most successful anti-poverty programmes in the country’s history. While 93 percent of the total population in 1985 was under deprived category, this declined to 54 percent of total population in 2005 and is expected to 3 further decline to 22% by 2025 .The economic growth is also expected to dramatically change India’s income pyramid 3 by creating a sizeable layer of middle class . This middle class segment is expected to be the primary driver for affordable housing

9. THREE STAKEHOLDERS VIZ. GOVERNMENT, REAL ESTATE DEVELOPERS AND FINANCIAL INSTITUTIONS. Government Interest Rate Subsidy ?One percent subsidy on loans upto INR one million for purchase of houses costing less than INR two million FSI (Floor Space Index) ?Haryana & Tamil Nadu Government have announced increase in FSI for housing projects targeting lower and middle income groups ?Tamil Nadu has announced 50 percent extra FSI for projects targeting EWS in Chennai Metropolitan Area (CMA) ?Tamil Nadu has further announced 30 percent extra FSI for projects targeting MIG Resumption of 80 IB ?Profits from housing projects approved between April 01, 2007 and March 31, 2008 will be made tax free if they are completed by March 31, 2012 PPP Measures ?EWS rental project at Virar, Mumbai by MMRDA (Mumbai Metropolitan Regional Development Authority) and HDIL(Housing Development and Infrastructure Limited); Bengal Ambuja Housing Project ?Modification in JNNURM (Jawaharlal Nehru National Urban Renewal Mission) to encourage affordable housing on PPP (Public Private Partnership) basis Policies ?Launch of Rajiv AwasYojana to promote slum free India

11. FINANCIAL INSTITUTIONSBanks and MFIs (Microfinance Institutions) are willing partners Banks are willing to fund suitable projects, provided that adequate checks are in place to monitor credit risk MFIs have expressed interest in funding EWS dwelling units upto INR 0.5 million Micro Housing Finance Corporation is an MFI that is exclusively focused on housing finance

12. Conclusion While the basic necessities of life – food, clothing, and shelter – are increasingly becoming luxury and unaffordable, luxury items such as televisions, mobile phones, refrigerators, etc are become affordable! While we are often amazed at the progress our country has made when we see an auto rickshaw driver with a mobile phone, we fail to notice that he is still living in a slum-like dwelling. It is understandable that economic growth leads to rise in income but this has led to even faster rise in property prices leaving it unaffordable for majority of population. Affordable housing is expected to have a positive by improving basic quality of life. Problems like traffic congestion, air quality, commute times, etc. can be resolved by providing proper housing facilities to the weaker sections of the society. While the concept of affordable housing seems to be a simple solution to current housing woes, its execution remains complicated due to the unclear policy framework. To make affordable housing work in India, it would require “will” from all the stakeholders by slightly adjusting their interests towards a wider social cause.

13. HOUSING FOR THE POOR IN INDIA Introduction According to the last census conducted in India in 1991, the country had a population of 846.3 million out of which 217.6 million lived in cities and towns. The total number of households was estimated at 153.2 million for the same year. As against this figure, the housing stock in the country was of the order of 148 million – 39.3 million units in urban areas (26.6%) and 108.7 million in rural areas (73.4%). During the period 1971-1991, while the number of households increased by 58%, the number of housing units went up by about 59%. Although India has been facing the problem of housing shortage for a long time, the increase in housing stock in recent decades has been more than that in the number of households. Table 1 portrays some salient data regarding the housing situation in India at the 1991 Census. Approximately 40% of households in 1991 were in single room tenaments; about 30% lived in two-room units. Only about 15% of households had four or more rooms. Table 2 shows the percentage break-up of households by the number of rooms occupied.

14. HOUSING SHORTAGE Housing shortage is estimated in terms of excess households over houses including houseless households, congestion (number of married couples requiring separate room/house), replacement/upgradation of kutcha/unserviceable kutcha houses and obsolescence/replacement of old houses. Table 5 shows the components of housing shortage in the country at the beginning of 1991. Table 6 shows the estimates of housing shortage in urban areas based on the Report of the Ninth Plan Working Group of the Government of India, Ministry of Urban Affairs & Employment

15. Urban Housing Scenario in India Urbanization Indian urban population in 2001 was 27.8% of the total population. Over 5 decades, annual growth of urban population ranged between 2.7 to 3.8%. During last decade it increased at annual rate of 2.7%. The process of urbanisation is marked by increasing concerntration in larger cities. It is projected that by 2041, India’s urban population will be 50%. The current ratio of urban land to population to GDP is 3:30:60. By 2040 it will be 3: 50: ?

18. Jawaharlal Nehru National Urban Renewal Mission.

19. Interest Subsidy Scheme for Housing the Urban Poor.

20. Affordable Housing in Partnership : Modification in JNNURM

21. Setting up of a High Power Task Force on Affordable Housing.

23. Strategy framework is multiple partnership of States with various stakeholders, cooperatives, employee welfare housing organisations, private sector, state parastals.

25. JNNURM and social housing to be given stronger boost with reform emphasis, additional funds and new components

26. State Governments

27. State Housing Board to be reactivated with definite purpose and definite targets.

28. Land to be provided at nominal cost for economically weaker sections and controlled prices for LIG and MIG

29. Cooperative Societies to be encouraged

31. Effective partnership between central government, state govts., parastatals, private sector, cooperative sector, employees welfare housing societies

32. Rental Housing

33. Rental housing is to be encouraged by way of amendment in the rent control laws and also using as a tax instrument which need to be crafted to avoid evasion.

34. RAJIV AWAS YOJANA – A RAY OF HOPE to Slum Dwellers and Urban Poor