Challenges and solutions of affordable housing in India


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Against the backdrop of large scale urbanisation anticipated in India over the next few decades, it becomes crucial to identify and evaluate the needs of the large mass of urban housing consumers, and address the challenges pertaining to the affordable housing segment.

In India, affordability can be defined as a function of three broad parameters - the monthly household income, the size of the dwelling unit and the budget of the homebuyer.

When buying a house, every customer seeks a strong value proposition which must be understood. For instance, a well-constructed home with adequate sanitation, security, privacy, play areas for children, and uninterrupted water and electricity supply holds significant aspirational value for a customer who currently lives in compromised conditions. Connectivity to places of work in urban centres and the presence of social infrastructures such as schools and hospitals are added drivers. However, limited income and difficult access to credit remain the major challenges that must be addressed.

Lack of land is another major roadblock, particularly for an island city like Mumbai. With burgeoning population, there is a huge need to cater the housing needs of the lower and Middle-Income Groups (MIGs) in Mumbai. Therefore, it is essential that the government frees up more land. If additional land tracts are provided, it will significantly address the needs of the existing home seekers.

Similarly, the reduction in the Goods and Services Tax (GST) rates to five percent and one percent is another way to meet the rising need of homebuyers. The announcement will not only reduce the housing prices but will decrease the burden on the end-users too. It will encourage them to come forward and invest in real estate actively. The government should use the opportunity to the fullest by ensuring planned developments and reviving the earlier announced Smart City projects.

Efficient town planning and management is the need of the hour and smart cities will enable us to utilise space, time and money in a far better way. It is imperative to create more organised structures and inculcate a habit of optimum utilisation of space while ensuring minimal wastage. Incentivising rental housing along with the real estate developers will also enable the government to achieve the objective of “Housing for all by 2022”.

Globally, there are several examples of how fast-growing and dynamic cities have successfully addressed various challenges of impending urbanisation. Compact and high-density neighbourhoods have been strategically promoted, typically around railway stations, and are served by an efficient public transit service. Similarly, it is essential for the high-density housing estates in the new towns to be well-connected to the central business districts and industrial estates. The integration of land use with transport networks should form the backbone for a sustainable urban development framework. Also, measures have been taken to encourage the redevelopment of dilapidated housing areas, to be replaced with high-density residential developments and, wherever possible, appropriate, affordable housing solutions.

The synergistic approach has the potential to accelerate the momentum of ‘right time right place’ affordable housing development across India. An enabling ecosystem will facilitate well-planned and sustainable urbanisation that will adequately meet the housing needs. Self-certification should be the rule of the game with a proper carrot and stick approach to reduce project development costs significantly. The development of Affordable Housing Zones, along with the promotion of innovative construction technology can be a win-win solution. This approach offers multiple benefits, both from the perspective of individual project requirements via speeding up supplies and to the technology provider who can achieve the desired scale by catering to the various projects within the zone.

It is a bit of a paradox that while a basic human necessity like housing is becoming increasingly expensive, luxury items such as smartphones and electronic goods are more and more affordable. The neighbourhood taxi driver may wield the latest mobile technology, but home might still mean a compromised solution. And yet, the future holds infinite possibilities. All it needs for affordable housing to become a widespread reality in India and all stakeholders should adopt a unified and sustainable approach with one common goal in mind – Quality Housing that is indeed for all.

Disclaimer: The views expressed in the article are solely of the author and may not represent's opinions on the subject. does not take responsibility for any actions taken based on the information shared by the author.

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