Inclusive housing needs the right policy

The affordable supply is slowly taking off,led by private players who are developing townships on the outskirts of metros. Several developments are now underway on the fringes of cities such as Mumbai,Bangalore and Chennai and are leading to the emergence of new poles such as Bhiwadi in the National Capital Region (NCR).

The densification issue is,however,tricky,Hoek-Smit noted,where the government needs to step in to provide infrastructure to cater to the sudden population spurt.

Alluding to the Mexican example,she pointed out that a state-led home ownership drive in the early 2000s saw small,heavily subsidised units come up far away from the cities. However,most remained unoccupied as there were no connections to the place of work. Developers who thought they saw a balanced demand-supply equation went bankrupt. Home owners saw no resale value in the property.

The next project was densification of existing cities by bringing in small affordable units in high rise towers was more practical. But with affordable stock available within the metropolis,developers in the affordable space working on the fringes of the city were hit even more. This,Hoek-Smit points out to one fallacy in defining inclusiveness in the context of housing,for it is limited to a narrow definition of home ownership. “It is not just financing,it is not about subsidies. Inclusiveness should mean a home that is an asset,that has a value attached,” she says.

That brings the next point: the definition of inclusiveness should have flexibility as it would vary in different markets,more so in a country like India. That would mean market segmentation with a focused strategy for each kind of buyer: economically weaker section,low income group and middle income group,a strategy that Chile followed successfully after much trial and error. The Latin American nation also brought in an innovative approach by involving NGOs in the delivery of housing stock to target groups,which made the programme a success.

India has a huge housing gap to fill,at 18 million houses. The challenge is immense,and so is the opportunity. It is not impossible,says Hoek-Smit if the three ingredients she lists out are worked out correctly: a long term policy with clear strategies,transparency and efficiency of procedures,and backed by real investment commitment.