Affordable Housing in India: Myth or Reality?

The concept of affordable housing involves the provision of housing with adequate facilities and decent standard of living for the lower and middle income households of the society, at moderate prices. The Ministry of Housing and Urban Poverty Alleviation (MHUPA), Government of India, defines affordable housing as “houses ranging from about 300 sq. ft. for Economically Weaker Section (EWS), 500 sq. ft. for Lower Income Group (LIG) and 600 sq. ft. to 1200 sq. ft. for Medium Income Group (MIG), at costs that permit payment of home loans in monthly installments not exceeding 30% to 40% of the monthly income of the buyer”.

In a quest to serve these segments of the society, quite a few projects of budget housing have been launched across the nation.

According to 2011 census, 31.6% of the population lives in urban areas and the number is increasing with the migration of people from rural areas. This rapid urbanization has led to land and housing shortage, thus deteriorating the living conditions of EWS. In a report by MHUPA, it was estimated that there is a housing shortage of 88% for EWS and another 11% for LIG in urban areas, whereas there is merely a shortage of 0.04% for MIG and the Higher Income Group (HIG).

Owing to the increasing demand, several builders and developers have added affordable homes to their portfolios. Property builders like VBHC, TATA Housing, Mahindra Lifespaces and TVS Emerald Haven Realty, among others are offering suitable houses and apartments at very reasonable rates. Some of the ongoing projects of affordable housing by these developers are: 

• VBHC's Vaibhava - Kengeri project in Bangalore
• VBHC's Vaibhava - Bhiwadi project in Delhi NCR
• TATA Housing's Subh Griha project in Ahmedabad and Mumbai
• Mahindra Lifespaces Nova in Chennai
• TVS Emerald Haven Realty in Chennai 

Apart from the above mentioned projects, there are several other projects by different builders that are currently in progress. All these projects are located in the suburbs of cities as it is a conundrum to offer affordable houses within the city limits. Several builders have also proposed to develop such projects within cities to facilitate people in the LIG. 

Although affordable housing has emerged as one of the most lucrative segments in the Indian real estate sector, the fact that it is still facing scarcity in terms of supply cannot be ignored. Ranging from regulatory issues to lack of home finances to the LIG, there are a number of roadblocks in the development of affordable housing in the country. In addition, excessive control by local authorities, lack of marketable land parcels, and lack of information and rising cost of construction are some other factors responsible for the slow progress of affordable housing. 

Rapid urbanization has further fueled the need for affordable housing, however the current status seems to be uncertain due to several aspects discussed above. Only time will tell whether the development of affordable housing is a ray of hope or a mirage to the economically weaker sections of the society. 

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