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Affordable Housing Scheme Aiming a home for everyone

16, Jun, 2017


Affordability, especially in the Indian real estate sector, can mean a wide range of things. Specifically, the term holds different meaning for different categories of demographics. Generally, affordable housing refers to residences that have been especially designed for the economically weaker section (EWS) and Lower Income Group (LIG) who are looking for the same comfort and security of a self-owned property/home that the more fortunate middle class enjoys.

Though different countries have different definitions for affordable housing, but it is largely the same, i.e. affordable housing should address the housing needs of the lower or middle income households. Affordable housing becomes a key issue especially in developing nations where a majority of the population isn't able to buy houses at the market price.

In India, it is appropriate to define affordability in housing as being a function of three broad parameters - the monthly household income (MHI) of prospective buyers, the size of the dwelling unit and the affordability of the home buyer (the ratio of the price of the home to annual income or the ratio of EMI to monthly income).' First and foremost, the Affordable Housing customer seeks a strong value proposition. Limited income and difficulty in access to credit mean that a home will most likely comprise the most important asset/biggest investment in his/her lifetime, and will form the starting point for the long-term welfare of his/her family. A well-constructed home in a planned development with adequate sanitation, security, privacy, play areas for children, and uninterrupted water & electricity supply holds significant aspiration value for this customer, whose current living conditions are likely to be compromised. Good connectivity to places of work in urban centers and the presence of social infrastructure such as schools and hospitals are also key.

As per the estimations are made, there are around 589 million people who are expected to make urban India their home by 2031, a whopping 59% growth over 2011. As an increasing proportion of India’s population starts participating in its growth story, it brings with it mounting pressure on the existing infrastructure, which needs to at least keep pace with the growing demand, if not be ahead of the curve. The current housing deficit in India stands at 19 million units, which, in the absence of any meaningful intervention, is slated to double to 38 million units by 2030. 95% of this deficit is around the EWS (Economically Weaker Sections) and LIG (Low Income Group) segments, which technically puts the figure at a staggering 18 million units in this category (approximately). While this number is huge, there is also a substantial chunk of upper end of LIG band and lower to middle end of MIG band, which we can say comprises ‘the emerging middle class’, who are also deprived of decent living conditions. The deficit in this category is approximately 4 lakh units, which, if not addressed, would further aggravate the proliferation of unplanned and unsustainable urbanization. Statistics show that more than 80% of these category are staying in congested homes.

The development of Affordable Housing Zones, along with the promotion of innovative construction technology providers co-located with the Affordable Housing projects and catering to project requirements, can be a win – win solution. This approach can entail varied benefits, both from the perspective of individual project requirements via speeding up of supplies, and to the technology provider who can achieve desired scale by catering to multiple projects within the zone. New-age construction technology like Pre–Fab can help speed up the construction process, while ensuring uniform, high quality standards.


Posted by : Satish Singh

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