The document discusses the potential of affordable housing in India to address the huge demand-supply gap in the low and mid-income housing segments. It notes that economic growth, urbanization, and nuclear families are contributing to rising housing needs, particularly in tier 1 cities. While affordable housing holds enormous potential, there are still uncertainties around what defines 'affordability' and ensuring adequate amenities and locations. Recent news highlights government initiatives and industry activity in the affordable housing space to fulfill the vision of 'Housing for All by 2022'. However, significant groundwork is still needed to deliver real affordable housing options at scale.

1. THE BRIGHTEST SPOT OF INDIAN REAL ESTATE?

2. Why Do
We Talk
So Much
About It?
Affordable housing segment holds enormous potential for
Indian real estate sector
Economic growth, expanding middle class, growth in nuclear
families and rapid urbanisation rate is contributing to housing
demand which is most profound in the Tier 1 cities
There is a huge demand-supply gap in the low and mid-
income segments
This gap is expected to widen further

3. Birth of
The
Concept
Prior to the economic slowdown in 2009, the construction activity
was largely dependent on advance bookings by customers. This
operating model worked during times of economic boom
During the outbreak of the economic slowdown highlighted the
weaknesses of this model leading to the liquidity crunch for the
sector
As a result, construction activities suffered, projects were
postponed, and developers had to offer deep discounts
Also the market in upper-mid and luxury segments became very
competitive due to the entry of new players in the last decade
These crisis gave birth to the concept of affordable housing in India
boosting collections from advance bookings and further improving
the finances

4. Compelling
Potential
1 crore annual urban population growth expected by 2050
11 crore houses will likely be required 2022
70 per cent of the urban housing need is in the affordable
segment
About 1.7 to 2.0 lakh hectare of land is expected to be
required to fulfil urban housing need by 2022.
Housing for All by 2022 is the vision of the new government
and initiative of PPP model

5. What is
Affordable
About It
The meaning of ‘Affordability’ changes with the context being
considered
There is no fixed definition of affordable housing that can be
applied uniformly
The definition and scope of affordable housing is greatly
contingent on a region's level of economic development and
income levels
Whilst most of the definitions for affordable housing consider
area, price and affordability of the buyer, the key ideas of
making affordable housing work through adequate amenities
and appropriate location remain unanswered

6. Truly
Affordable
Minimum volume of habitation: as pressure on urban land
increases, architecture of all forms, be it commercial or
residential, are going vertical
Provision of basic amenities: while factors like minimum area
and cost, provision of basic amenities such as sanitation,
adequate water, power supply, community spaces, parks,
schools and healthcare facilities is crucial and desirable either
within the project or in the neighbourhood
Cost of the house: the cost of the house should consider not
only the purchase cost but the maintenance cost of the unit
Location of the house: if the project is very far from major
workplaces, affordability is greatly affected. It should be
located within reasonable distances from workplaces and
should be well connected through public transport

7. Recent
Buzz
Around
On 29th May 2015, Indian Express reported - "PM Narendra
Modi takes stock of progress of infra projects"
Chairing a high-level meeting on infrastructure sectors, the
Prime Minister asked for specific data to be collected and
presented on priority areas such as toilets, affordable housing
and smart cities.
On 29th May 2015, Business Standard reported - "Fullerton
India to enter affordable housing finance"
Fullerton India Credit Company (FICC) is planning to enter
the affordable housing finance segment and has applied for a
licence to the National Housing Bank (NHB). The home loan
arm will be called Fullerton Home Finance Company.
On 28th May 2015, Economic Times reported "PM Narendra
Modi's 'Housing for all by 2022' scheme to be launched by
mid-June“ The government is getting ready to launch themost
ambitious scheme: Housing for all by 2022. Modi is likely to
launch the scheme as an umbrella mission, dovetailing all
affordable housing schemes and slum redevelopment
projects.

8. Recent
Buzz
Around
On 28th May 2015, UNI reported - "Tata Value Homes
launches New Haven, affordable project, in Boisar"
The company announced the launch of its second affordable
housing project in Boisar, near Mumbai. Launched under the
brand New Haven, the project aims to fulfil the lifestyle
aspirations of a common man at an affordable cost.
On 27th May 2015, Economic Times reported – "Affordable
housing in Delhi could get major boost"
Delhi could get a major boost with the centre notifying norms
for the land pooling policy, a decision welcomed by the
industry.
On 21st May 2015, BBC reported -"Why are more than 10
million homes vacant in India?"
If you travel through the suburbs of the Indian capital, Delhi,
you will see miles and miles of built homes with nobody living
in them. And despite this, there is a huge shortage of housing
in urban India. The latest official Economic Survey says there
is a shortage of nearly 20 million homes in India.

9. Recent
Buzz
Around
On 16th May 2015, Times of India reported - "Housing for all to get
a boost, govt plans higher interest subsidy for economically weaker
section“ The housing ministry is likely to increase interest subsidy
for flats under economically weaker section (EWS) and low income
group (LIG).
On 14th May 2015, DNA reported - "Mhada to build 50,000
affordable homes in next five years“ The state housing ministry has
decided to construct as many as 50,000 affordable houses, which
will be bigger and better with more amenities.
On 13th May 2015, Business Insider reported - "IFC enters
agreement with Tata on affordable housing projects"
The IFC has signed an agreement with Tata Value Homes to invest
$25 million or Rs 160 crore to provide affordable houses to people
across India.
On 6th May 2015, Times of India reported - "Nod to four new urban
townships“ The second phase of the Yamuna Expressway
Industrial Development Authority's Master Plan-2031 was approved
by a joint board of the three development Authorities Noida,
Greater Noida and YEIDA on Monday, paving the way for four new
urban townships adjacent to the cities of Aligarh, Agra, Hathras and
Mathura.

10. Affordable housing looks very promising at one hand but to
address India’s urban infrastructure problems, there is a lot
ground work needs to be done to provide real affordable
housing for all. We will watch this space and continue to
update you in times to come.
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