Measures needed to pave the way for an efficient affordable housing market

Affordable housing finance is estimated to be a Rs 6-lakh crore business opportunity by 2022. Planning mechanisms play a major role in ensuring sustained growth of the affordable housing sector. Long-term and short-term measures necessary to produce a comprehensive and effective environment for private sector provision of affordable housing must be made part of the agenda to achieve an upward trajectory in the sector. Following 6 key factors can pave way for a smooth and accessible market for the sector:

Strong partnerships

The government partnering with private players is a key success driver in the development of affordable housing projects through a commercially viable project structure. A policy pool that caters to innovative implementation methods that foster healthy competition between strong developers in the market will ensure effective and sustained growth of the sector.

Innovative finance mechanisms

Innovative PPP models make room for finance mechanisms that provide relief to the private developers and provide a thrust in the right direction to the affordable housing sector to encourage the private developers to participate in the affordable housing.

Demand analysis

Optimised allocation of the planned housing stock to the right section of the population is a key growth retardant to the number of vacant and unsold inventory. A part to whole approach that takes into account the distribution of beneficiary population and the ratio of mix in the areas identified for development of housing units (to understand the actual demand in an area) is imperative to successful implementation of a project from inception to sale / rental. And, developing affordable housing units with access to modes of transportation, better connectivity, quality healthcare and education, proximity to community services, etc. is the need of the day.

Single-window clearances

Recent social housing schemes across the globe aim to quicken the pace of development of housing units to bridge and secure the gap between supply and actual housing demand. A recent trend involves provisions for single-window clearances. This measure will stimulate the supply of viable affordable housing by minimising construction cost overruns (owing to delay in approvals) to substantial levels.

Construction tech

Leveraging the benefits of new advancements in the construction sector will have long-term implications on cost, quality and safety of the housing units. Adopting low-cost construction technology such as pre-fabrication will help developers construct units at lower costs and at a quicker pace. The higher initial cost of technology is compensated by lower labour costs and higher efficiency in construction.

Standards, monitoring

Introducing monitoring mechanisms to ensure delivery of quality homes to the beneficiary population will not only imply enhanced living standards but also strengthen sector values. Guidelines prescribing standards for construction methods, technology, material as well as execution and implementation along with efficient monitoring mechanisms will help streamline the project right from activation to the sale / rent of property to the target population. Innovative maintenance mechanisms result in sustainable development and longer life of affordable housing units.

Conclusion

Affordable housing reflected a y-o-y growth of 27 per cent between January and September 2017. Out of the total supply, the share of housing supply in the housing segment with capital value below Rs 4,000 per sq ft has increased to 28 per cent in 2017 from 23 per cent in 2016. The affordable housing segment is on an upward growth trajectory. The housing shortage, earlier projected at 18.78 million in 2011, has been revised downwards to about 10 million units as of 2017 through subsequent assessment carried out by the MoHUA. This comes with the assurance of provision of housing for all by 2022, in alignment with the PMAY-U programme objectives. In the long run, a wider set of policies and innovative mechanisms for achieving a renewed role of the PPP model in affordable housing will create a solid foundation for uplifting livelihood of the vulnerable section and thereby provide the thrust required for the transformation of ‘affordable housing’ from mere budget housing units to the provision of ‘more than just a home’.