Homes no bigger than a bus

Affordable,but how liveable?

In order to reduce costs and improve affordability for the buyers,reducing the saleable area is one of the several measures adopted by real-estate developers (in the National Capital Region,Mumbai,Ahmedabad,Kolkata,Pune,Bangalore and Chennai) selling affordable houses. As a result,affordable houses have shrunk by at least 40 per cent of the sizes that existed a decade ago,say real-estate experts.

“According to our estimates,the sizes of affordable houses in Gujarat has shrunk by at least 40 per cent in the last decade,” says Nirav Kothary,head of industrial real-estate division at Jones Lang LaSalle (JLL),a global property consultant.

A recent report titled ‘Affordable Housing in India’ from JLL clearly states,“In order to reduce costs and improve affordability for the buyer,developers have adopted several measures. This includes units having reduced saleable areas of 250-350 square feet for one room-kitchen,and 400-500 square feet for one bedroom-hall-kitchen formats.” Experts describe these homes as being no bigger than a state transport bus operating in the state.

The child star of the Oscar-winning Hollywood film,‘Slumdog Millionaire’ – Azharuddin Mohammed Ismail – is one such person who currently occupies a 250 square feet,one-bedroom apartment at Santacruz West Mumbai. “The apartment for Azhar is 250 sq ft. I agree it is very small but even this was unaffordable for him,had the trust had not supported (the trust had bought the apartment for Azhar),” says Nirja Matoo,one of the trustees of Jai Ho Trust,set up by the filmmakers to help Azaharuddin and his co-star Rubina Ali,who earlier used to live in a slum in the megacity.

Real-estate developers say that the rising cost of land in urban centres is the main cause behind the shrinkage in the sizes of affordable houses. While experts believe that smaller housing units are an apt answer for India’s housing problems,a research study conducted by the Hyderabad-based Indian School of Business (ISB) in 2011,points out that families feel “uncomfortable” to live in houses that are smaller than 700 square feet.

Even large affordable housing players like Tata Housing who operate in a joint-venture agreement with Arvind Real-estate in the Ahmedabad property market are offering units as small as 293 square feet (carpet area) for about Rs 8 lakh in the city.

In the period 2009-12,affordable housing projects priced between Rs 5-10 lakh have been sold on”an “application m”del” due to huge demand,with multiple takers for the same unit,says JLL.

Thriving market,new suburbs

Increasing land prices have also pushed affordable housing projects away from city centres. Mumbai and NCR have affordable housing projects located 65-75 km away from the city centre. On the other hand,Ahmedabad and Kolkata provide better proximity,with projects located at a distance of 15-20 kms. Bangalore,Pune and Chennai also have projects after a distance of 25-30 km from the city centre,states the JLL report.

The shortage of land has been exacerbated artificially by poorly conceived central,state and

municipal regulations. As a result,land prices in India are much higher than intrinsic levels that can support mass real-estate developments.

Mumbai is currently leading the affordable housing sector,with over 15 projects. Karjat,Palghar and Boisar in the neighbouring Thane and Raigad districts are the popular locations for homes at that price point. In Ahmedabad,the localities of Narol and Vatva have multiple ongoing projects.

Apart from Tata Housing who have entered the market under the brand name Shubh Griha,the other players are Value Budget Housing Corporation (VBHC) that has already launched multiple affordable housing projects across various cities. In both the Ahmedabad and Mumbai markets the players are Foliage,DBS Affordable Homes and Nirman Group.

Housing Development and Infrastructure Limited (HDIL and Usha Breco Realty have experimented the format with their projects successfully in Palghar and Boisar. Other notable developers who have announced future developments targeting this segment are Mahindra Lifespaces,TVS Housing and S Raheja.

“There cannot be houses as small as 250 square feet,” says a surprised Umang Thakkar,CMD Dharmadev Infrastructure which is currently building 10,000 affordable housing apartments in Narol,Naroda,Ranip and Vasna areas of Ahmedabad that have sizes which range from 600 square feet onwards.

Thakkar who has been in the affordable housing business for the last 20 years feels that rising prices of land and the changing lifestyles of people have caused houses to shrink. “The prices of land have risen several fold over the last few years. Moreover,people no longer live in joint families. There are more number of singles and migrants who prefer smaller houses,” says Thakkar.

In order to ensure low construction cost,the building structure is typically low-rise with Ground+ four floors,without

a lift. “The low-rise structure and adoption of technologies such as aluminium formwork and building information modelling enables developers to complete the project within a short period of 18-24 months,thus decreasing the collective time and better returns,” the JLL report states.