Will Affordable Apartments be a Reality in Gurgaon?

Gurgaon has primarily been a luxury real estate market, and this in turn has increased the demand for support staffs, like drivers, electricians, plumbers, etc. But, inspite of the real estate growth, the city has been facing labour crunch due to the inadequate supply of affordable houses. Gurgaon offers a range of 2BHK and 3BHK apartments, but lags behind when it comes to 1 BHK apartments. Currently, an apartment in Gurgaon costs nothing less than 75 lakhs, thereby dashing the dreams of any middle class family of owning a home in the city.

Catering to the housing problems of all sections of the society, the Haryana Government had announced the Affordable Housing scheme for Gurgaon in 2013. Though the proposed plan had gathered momentum, but there have been many factors that have led to the supply constraint, one of them being the lack of affordable land. After the government and RBI announced special schemes and incentives for affordable housing, developers are struggling to acquire low cost land for affordable housing projects. The land prices in Gurgaon are soaring sky high, and cheap land is only available in the outskirts of the city, where transportation is poor.

Regulatory hurdles and approval delays are another cause for the lack of affordable housing inventory in Gurgaon, creating a supply demand gap. To overcome this gap the Haryana government had proposed an affordable housing scheme, under which the government aimed to provide 30,000 residential flats for the lower middle class segment, and offered special rebate for building affordable houses. Around 35 developers had applied for the rebate, and were instructed to complete the projects within stipulated time.

But the scheme is indefinitely delayed, due to a petition filed by a resident, claiming that the regional development plan has not yet been approved and further construction approvals in Gurgaon should not be given. Post this, the Haryana and Punjab high court prohibited the Haryana Government from issuing any change of land use (CLU) licence to builders and developers for building colonies in the National Capital Region (NCR) and Gurgaon, till the National Capital Region Planning Board (NCRPB) approves a sub-regional plan for Haryana. NCRPB was supposed to meet in January 2014, to finalise the plan, but the meeting was postponed for elections. Hence, the scheme was never implemented, and the case is adjourned till August 22, 2014.

The town planning department also submitted a revised plan in February, hoping to get an early clearance, but NCRPB did not approve it. It is also alleged that the Haryana Government was seeking hasty approvals in order to issue licences to builders and developers.

The board said that the Haryana government has not taken the mandatory approvals from the Union ministry of environment and forest (MOEF). Also, mapping and delineation of the area has not been conducted. The delay in approvals will not only delay the affordable house offering, but will also affect the cost of the houses offered under the scheme. Initially the price was fixed by the government as per their present market value, keeping in mind the current construction costs. These new developments have pushed the affordable housing scheme towards uncertainty, until the plan is approved.

The proposed Gurgaon master plan will further increase the land prices and ultimately the buying price for the end user. The continuous urbanisation of the city is also going to add to the construction and land costs, making affordable housing in the city a distant dream.

Though the government has voiced a clear idea to increase the supply of affordable housing in the current budget, there are various other hurdles that are creating obstacles for the builders.

Cheap land and construction technology providing precast houses are something that can help lower the overall cost of building a house. Also, the regulatory problems, plan approvals and infrastructure development need to be completely thought through to provide low cost housing facilities in Gurgaon. Till that time, the affordable housing scheme seems to be a distant reality.

So, do you think the Haryana government will be able to implement its long proposed affordable housing scheme in Gurgaon? Share your views by commenting below.