Module 2

AFFORDABLE HOUSING IN INDIA
Pavana Rao A - 163710003

Ch.Lakshmi Bhargavi -163710010
Akshatha rao- 163710015
Surabhi Kanade - 163710017
Affordable housing ??
• No clear cut definition

• As per RICS report affordability means provision of
adequate shelter – sustained basis, ensuring
security with means of common households.
• According to the KPMG report, affordable housing
is defined in terms of three main parameters
1. Income level
2. Size of dwelling unit
3. affordability
• According to task force on affordable housing,
affordable housing is the size of the dwelling and
housing affordability derived by the income of the
population.
Source : jones Lang LaSalle; Affordable Housing in India- An Inclusive approach to shelter the bottom of the pyramid
Definitions….
• Affordable Housing:
o Generally considered as 3 times the annual income
o In all schemes and projects where subsidy is offered by State/Central Govt., for dwelling with
carpet area less than 60 sqm, affordability is considered 5 times of the annual income.
o Areas of dwelling unit for affordable housing:
• Affordable Housing project:

o Housing project in which at least 60% of the FAR consists of dwelling units of carpet area not more
than 60 square meters and 15% of the total project FAR/FSI or 35% of the total number of
dwelling units, whichever is higher, reserved for EWS category.
Source : video - Affordability & Housing Finance, NPTEL under the government of India
Need for affordable housing ?? Current scenario of Housing in India :
Urbanization Reasons for Housing

Housing gap in2011
(million units)
shortage
Economic Social well Demand
growth being
lack of access to home
Growing importance  urban areas finance for LIG
economic sphere opportunities
led to migration and increase in Supply
rate of urbanization lack of availability of
INDIA POPULATION(1950-2016)
urban land, rising
construction costs and
population
13268 regulatory issues
14000 12131
12000 10535 • India’s urban population is
Hundred millions
8706
10000
6972
growing at an average 2.1%
8000 5539 every year since 2015. It is
6000 3763 4497
4000
likely to reach 60crore by
2000 2031.
0 • GOI - shortage of 18.78 million
dwelling units
1951
1961
1971
1981
1991
2001
2011
2016
Source : Census, India

• 96% Economically Weaker
Section & Low Income Group
Source:http://economictimes.indiatimes.com/articleshow/57768759.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst
http://www.indiaenvironmentportal.org.in/content/438681/the-housing-gap-indian-cities-needs-18-million-houses/
Need for affordable housing ??
Current scenario of Housing in Various states :
Gap
limit
Supply side Capacity
intervention Demand side
• Land supply intervention
• Technology Market Housing
• Finance
• Institutional Price Affordability
• Reservation
• policy (Subsidy)
• Interest Subsidy
• Mortgage Subsidy
Issues related to provision of affordable housing…
High cost and difficulty in acquiring land in Urban Areas:
• Undersupply of residential land in urban India because of government regulations,

• Land conversion issues from agricultural to non- agricultural.
• Land Ownership arguments and issues.
Cost escalation of the land required for Increased construction cost as well as the
the construction prices of the housing which is to be provided.
Location of the site provided for housing:
• High land cost Development at outskirts preferred to keep minimal overall cost
Increased urban sprawl Increased commuting and traffic on roads.
Source : Affordable housing: In conversation with Ramesh Ramanathan, Chairman, Janalakshmi Social Services and Janaadhar
Getting bank loans:

• If the affordable housing scheme is being carried out in the city area, though the time to
commute decreases and there is enough availability of basic services around, the prices
automatically increase.
The EWS and the LIG section cannot afford to take loans from the bank to pay for the housing
provided
Acquiring customers from the target segment
• Economically well- to- do people also purchase the housings from this segment as an
investment option, fearing price escalation, thus creating scarcity.
While low cost houses are small in size and located far away from the center of the city, they are
comparable in their structural quality to any of the other houses, thus making it more affordable
to the classes other than intended for.
Source : Affordable housing: In conversation with Ramesh Ramanathan, Chairman, Janalakshmi Social Services and Janaadhar
Low FAR/ FSI:

• Affects height of buildings, hence affects supply.
• Low FAR created to limit density, but density has not reduced due to availability of land, hence
property prices shoots up.
Land Transfer Policies:

• Construction of development site involves lot of steps and unnecessary hurdles.
• Conversion of agriculture to non-agricultural land is a tedious process.
• Stamp duty and registration process is expensive, hence housing price increases.
• Slow process for permission and corruption prone.
Non – Usage of Government Land:

• Various government bodies own land which gets wasted
Source : Anindo Sarkar, Udayan Dhalavikar, Vikram Agrawal, Sebastian Morris, Examination of Affordable Housing Policies In India, March 2016
Affordable Housing : Institutional Framework…
• 3 tier government : Various level organizations at three levels.

Acts/ legal Frame Policy planning Organization Role
Central •Constitution of India •National Urban •Ministry of Housing & •Streamline
Government Act Housing and Habitat Urban Poverty Alleviation Funding
•Land acquisition Act Policy(NUHHP) (MoHUPA) •Facilitator
•Developers Act •National Urban Rental •NHB •Monitoring
Housing •BMTPL
Policy(NURHP) •HUDCO
•HPL
State •Town and Country •Public Private •Dept/ Directorate of •Enabler

Government Planning Act Partnership Town & City Planning •Implementer
•Municipal Act •Land Policy •Dept/ Directorate of •Monitoring
•Slum clearance/ Town & City Planning –
Improvement act State Planning Board
•Developers’ organization
Local Local Building bye- •Housing •Development Authority

Government laws/ regulation Strategies/Master •SPV
plans •NGO
•SFCP •Pvt. Developers
•Land banking
Roles of Government at Central Level:
• Followed by Central Ministry i.e., Ministry of Housing and Urban Poverty Alleviation, Building
Material Technology Planning Council(BMTPC), HUDCO :
o Policy direction and decision
o Streamlining of funding through state government at local level
o Facilitating and supply and markets for people from all classes
o Monitoring of central schemes ( e.g.. PMAY, JnNURM etc.)
o Hand holding and capacity buildings line model municipal bye-laws, Model state affordable
housing Policy etc.
o Promote the growth of housing stock in the country
o Ensure availability of housing and rental stock for economically weaker sections
o Promote low cost financing and micro-financing opportunities
Roles of Government at Central Level:
• Government of India shall support State Govt through following aspects:
o National Policies, Programs and Schemes and act as a facilitator.
o Provide capital grants support to Affordable Housing projects under various schemes.
o Greater channelization of credit to the urban poor to enhance their purchasing power.
o MoHUPA will time to time provide inputs to the Ministry of Finance for providing fiscal and
financial incentives to this segment.
o GOI strives to accord industry status to the real estate segment.
o GOI considers making Viability Gap Funding available for Affordable Housing projects.
o Flow of capital through external sources like the External Commercial Borrowings and Foreign
Direct Investment
Roles of Government at State Level:
o Provision of housing for all categories, through housing boards, development authorities ,
municipal corporations
o Streamlining of the funding and land acquisition
o Regional and Urban Planning
o Facilitating land management and housing market & institutional reforms
o Public Private Partnership
o State specific policies on Affordable Housing.
o States to draw up the road map and a vision for a ‘Slum Free City’
o Rapidly upgrade civic infrastructure to expand city limits and establish satellite towns.
o Ensure rapid connectivity between existing urbanized limits and new far flung locations to
ensure lack of infrastructure don’t dissuade target beneficiaries from such projects
Initiatives by State Government:
Land: Finance:
• Min 15% of total project • Financial incentives to reduce cost of dwelling
FAR whichever is
through monetary interventions
higher-
35% of total number of reserved for
• • Encourage private developers and
dwelling units EWS category
ULBs/Development Authorities/Housing Boards
etc.
• People friendly land acquisition policies
• Facilitate targeting of subsidies for access of
• Offering infrastructural facilities and transportation
individual loans under the Rajiv Rinn Yojana (RRY)
linkages to such sites .
and Rajiv Awas Yojana aiming at slum free India.
• Property rights to slum dwellers
• Promotion of Innovative and demand driven
Public Private People Participation (PPPP) projects
• Non-eviction policy for residents of slums with over
for affordable housing.
5 years of documented stay in a particular location.
• At least 25% of the budget under the Basic
• Mortgageable leasehold property rights and land
Services for Urban Poor Fund
titles for the EWS and LIG by Revenue Department
and the ULBs
• Social security programs for urban poor dovetailed
with housing programs of State/Centre
Legal and Regulatory Reforms: Technology Support and its Transfer:
• 10 years affordable action plan targeting housing • Encouraging vernacular styles of architecture
requirements. for housing construction
• Fast track the building permits - Establish Single • Promoting innovative technology and building
Window Clearance cell to provide building permit materials for low cost and mass housing
within 60 days from date of application.
• Encouraging Prefab Techniques, Green
• Facilitation faster conversion of agricultural land to Housing, Low energy consuming building
non-agricultural land with in urban planning materials, Rain water harvesting and water
boundary. conserving techniques, and other latest
technologies.
• Development zones for EWS/ LIG/MIG in Master
plan • Necessary support to technologies through
standard schedule rates , price preference etc.
• Liberal FAR to create more housing stock for LIG in
affordable housing projects.
• Builders and Developers incentivized by additional

FAR and TDR for their affordable housing projects.
Institutions: Capacity Building: Sustainability Concerns:
• Existing institutions like State • Capacities of functionaries

Housing Boards, in State/ Housing Boards • Nodal Agency to monitor
Development Authorities and and ULB’s shall be enhanced Environmental sustainability
Slum Redevelopment for effective and efficient in terms of materials.
Authority/Clearance Boards provision of housing
rejuvenated to meet growing services. • Economic sustainability of
demands on affordable constructed projects with
housing. • Dedicated Municipal Cadre adequate provisions for
for effective delivery of community structures.
• Need based Special Purpose services and housing.
Vehicles for promoting • EWS and LIG households will
Affordable housing projects. be educated regarding
building maintenance and
community management.
Roles of Government at Local Level:
• Include Municipal Corporations, Municipal Councils, Development Authorities, Nagar Palikas,
Panchayats
• Constitution of India, Article 243W(12th Schedule) has 18 sections in the list. In that there are few
section related to affordable housing;
o Section2- Regulation of landuse and construction of buildings
o Section 10-Slum improvement and upgradation
o Section 11-Urban Poverty Alleviation
o Section 12- Provision of urban amenities and facilities such as parks, gardens and play grounds.
o Construction of houses for the poor

o Linking livelihood and infrastructure with housing
o Promotes Public Private Partnership
o Taking Feedback and Evaluation of masterplan
Roles of Non-profit organizations and cooperative sector, employer welfare associations:
• Land at institutional rates made available to cooperative housing societies and Employee
Welfare
• A part of the funds should be earmarked for in-situ development routed through Non-
Government Organizations (NGOs) and Community Based Organisations (CBOs)
• Undertake land assembly and development: focusing housing with complementary basic
services.
• Design public-private partnerships for slum reconstruction on a cross subsidization basis.
• Augment housing stock at an accelerated rate both on ownership
Roles of Private Developers:

• Undertake construction of affordable housing in partnership.
• Compensate the lower profit margins with the sheer volumes involved within this segment
which pose as a great business opportunity.
• Channelize resources towards affordable residential development by duly following norms of

reservation in housing for the EWS
• Invest in innovative construction technologies to promote mass housing developments at

subsidized construction costs
• Establish Resource &Development centers for identifying new technologies and opportunities
• Follow quality control and monitoring standards to ensure developments are habitable and
specifications of permissible quality
• Maintain housing as a priority asset and continue subsidized pricing for budget housing
development. Maintain 30-40% pricing discount from market rate
Objectives:
HOUSING FOR ALL
INSTITUTIONAL APPROACHES
Affordability to buy Affordability to rent
Enablers
Private sector developer Self help groups
NGO & registered societies
Providers
Government agencies, ULBs, ULB’s, Financial institutions,
UDAs MoEF, RBI Government Departments,
Research Institutes
Financial Institutions, Banks, Executors

NBFCs & other financial Private Developers, PSUs
institutions PPP companies
Affordable Housing : Policies…
Past Scenario:
• Post independence Low priority for Housing
• In 1956 Constructions Materials played role
• 1980s Formulated policies for housing HDFCs, LIC, HUDCO
Facilitate the
National housing policy 1988 policy
National housing bank, HUDCO
• 1991 Liberalization o Freed banks and financial institutions to make loans to

individual households for construction and purchases
o Builders to finance their construction
• 2003 to High growth of Large Government Affordable

2008 8.5% per investment in focus housing
annum housing
• 2007 National Urban Housing First policy on Focused on

& Habitat Policy (by Affordable Housing sustainable
MoHUPA) development
Need for the Policy:
Cities Centers of Migration Lack of housing Formation Affects

and Economic and and basic of slums health and
Towns Growth Urbanization services safety
• Housing shortage = 18.78 million units • Housing and construction industry = 10% GDP
• 96% belongs to EWS and LIG households • Generates job opportunities
• Private sector plays important role in housing infrastructure, as resources available with the
government is limited.
Target Groups:
• Urban poor classified by MoHUPA, GOI. Ie EWS and LIG, BPL etc based on income criteria
National urban housing and habitat policy, 2007:
• Affordable housing for all
• Sustainable Urban Development through private, public and PPP basis
• PPP for accelerated development
• Accelerating phase of development of housing and related infrastructure
• Special emphasis on EWS, creating adequate rental and ownership housing
JnNURM
Basic Services For Urban Poor: Integrated Housing And Slum Development Programmes:
• Integrated slum development • Central assistance in the form of ACA as full
grant
• Slum improvement and rehabilitation
projects • 80% project cost by center
• Provision of houses at affordable cost for • 12% beneficiary contribution for SC, ST, OBC
urban poor , EWS and LIG categories etc, for other weaker sections 10% beneficiary
• Implemented in 49 cities
Affordable Housing in Partnership (2013):
• Modifications of JnNURM (BSUP) to facilitate, incentivize land assembly for affordable housing.
• 25% cost central assistance for affordable housing at cost of approximatey rs. 5000cr.
• Support to build 1 million affordable dwelling units; in that 25% minimum dwelling units for
EWS
Interest Subvention Scheme

• Concession of 1% for borrowers of housing loans up to 10 lakhs
• Maximum housing unit price is not more than 20 lakhs- valid up to 2011
Rajiv Awas Yojana (RAY) (MoHUPA – 2012)

• Slum free India
• Also tackles the problem of affordable housing
• Two major objectives:
o Legal recognition of slums and bringing them into formal systems
o Readdress the failure of formal system
Slum intervention strategies Slum prevention strategies
• Dwelling units to all tenable slums • Address time consuming land approval
process, constraining building rules
• Upgradation from Kutcha to Pucca House
• Free up rental market
• In-situ redevelopment
• Microfinance institutions.
• Resettlement to nearby slum
Affordable housing in partnership scheme State Policy Reforms
• Subsidization upto 75000 per dwelling • Land bank for affordable housing.
unit of size upto 40sqm
• Efficient process of giving clearances
• Mix of EWS + LIG + Higher categories and
commercial • Nominal stamp duty for EWS/ LIG housing
Earmarking of 25% of Municipal Budget Cross subsidization and incentives to developers
• 15% FSI or 35% dwelling unit for EWS/ LIG in

• Civil and social services.
future housing
• Services for urban poor and slum dwellers
• Developers will be granted relaxations
Master plan amendments Assignment of lease rights

• Recognize slums in non-objectionable • Lease right for slum dwellers for residents
land. residing for more than 5 years.
• Simplification of sanctioning process. • Rental housing, dormitories and night

shelters.
Evaluation of RAY scheme:
Land bank State government Used for affordable housing
impact
Taxation Nominal stamp duty Affordable housing
Increasing FAR Reduction of Price
Subsidization of housing for poor Invite formal market
Assignment of lease right Increases liquidity in housing market
Housing For All 2022
• “Every family with pucca house with water connection, toilet facilities, 24x7 electricity supply
and access”
• Addresses the issue of………………..Housing shortage
Slum dwellers Urban poor living in Prospective Homeless and

non-slum areas migrants destitute
Slum on public land Slum on private land Unauthorized slums

• Redevelopment • Redevelopment
• Regularization of
colonies
• High FSI • Upgradation
• Services – road,
• Commercial through • Commercialization
sanitation
private
• High FSI
Housing For All In Telangana State
Statistical data
Total households 30,16,096
Total Population 1,25,78,290
No. of Slums (Notified & Non-Notified) 2,714
Total Slum Population 48,58,482
No. of Households in Slums based on average 9,71,696 (24% of
family size Total Households)
• The mission will be implemented through four verticals giving options to beneficiaries, ULBs and
State Government:
o In-situ slum redevelopment
o Affordable housing through credit linked subsidy
o Affordable housing in partnership
o Subsidy for beneficial led individual house construction

Source : Pradhan Mantri Awas Yojana –PMAY Housing for All (HFA), M. Dana Kishore, IAS, Secretary of Housing Department, Commissioner & Director of Municipal Administration
Housing For All In Telangana State
Salient features
• Housing for All (HFA) dovetailed with 2BHK programme.
• AHP component of HFA (Rs. 1.50 Lakh per Unit) dovetailed with State grant of Rs. 3.80
Lakh per DU of 2BHK and Rs. 0.75 Lakh per DU towards infrastructure.
• Each house / Flat costing Rs. 5.30 Lakh.
• Cost of Infrastructure Rs. 0.75 Lakh per DU.
• Pattern of Construction : G+1 to G+9 depends upon the Land availability.
• Land : Government Land / Existing Slums / LA if necessary.
• HFA in Urban areas (68 towns) of Telangana State implemented from 2015-16 to 2021-22
(7 years period).
Source : Pradhan Mantri Awas Yojana –PMAY Housing for All (HFA), M. Dana Kishore, IAS, Secretary of Housing Department, Commissioner & Director of Municipal Administration
Affordable Housing : Strategies…
• Make use of government land to build affordable houses and placing existing slums on
these lands.
• Affordable housing to be developed at areas where commute to job areas become easy.
• High FAR can be made available to encourage more built up and increased number of
floors to accommodate large number of affordable houses.
• Formalization of informal markets – regularization of existing informal settlements/.
• Incorporating commercial zones within these development to add on to the value to the
land.
• Affordable housing should also focus more towards affordable rental schemes for the
migrants.

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AFFORDABLE HOUSING IN INDIA

Pavana Rao A - 163710003

• No clear cut definition

• Affordable Housing project:

Urbanization Reasons for Housing

Source : Census, India

High cost and difficulty in acquiring land in Urban Areas:

• Undersupply of residential land in urban India because of government regulations,

Location of the site provided for housing:

Getting bank loans:

Acquiring customers from the target segment

Low FAR/ FSI:

Land Transfer Policies:

Non – Usage of Government Land:

• 3 tier government : Various level organizations at three levels.

State •Town and Country •Public Private •Dept/ Directorate of •Enabler

Local Local Building bye- •Housing •Development Authority

o Policy direction and decision

o Streamlining of funding through state government at local level

o Monitoring of central schemes ( e.g.. PMAY, JnNURM etc.)

o Promote the growth of housing stock in the country

o Promote low cost financing and micro-financing opportunities

o National Policies, Programs and Schemes and act as a facilitator.

o GOI strives to accord industry status to the real estate segment.

o Streamlining of the funding and land acquisition

o Regional and Urban Planning

o Facilitating land management and housing market & institutional reforms

o Public Private Partnership

o State specific policies on Affordable Housing.

• Builders and Developers incentivized by additional

Institutions: Capacity Building: Sustainability Concerns:

• Existing institutions like State • Capacities of functionaries

o Construction of houses for the poor

Roles of Non-profit organizations and cooperative sector, employer welfare associations:

Roles of Private Developers:

• Channelize resources towards affordable residential development by duly following norms of

• Invest in innovative construction technologies to promote mass housing developments at

HOUSING FOR ALL

Affordability to buy Affordability to rent

Financial Institutions, Banks, Executors

• In 1956 Constructions Materials played role

• 1980s Formulated policies for housing HDFCs, LIC, HUDCO

• 1991 Liberalization o Freed banks and financial institutions to make loans to

• 2003 to High growth of Large Government Affordable

• 2007 National Urban Housing First policy on Focused on

Cities Centers of Migration Lack of housing Formation Affects

• Sustainable Urban Development through private, public and PPP basis

• PPP for accelerated development

• Accelerating phase of development of housing and related infrastructure

• Special emphasis on EWS, creating adequate rental and ownership housing

Affordable Housing in Partnership (2013):

Interest Subvention Scheme

Rajiv Awas Yojana (RAY) (MoHUPA – 2012)

• Also tackles the problem of affordable housing

• Two major objectives:

o Legal recognition of slums and bringing them into formal systems

o Readdress the failure of formal system

Slum intervention strategies Slum prevention strategies

Earmarking of 25% of Municipal Budget Cross subsidization and incentives to developers

• 15% FSI or 35% dwelling unit for EWS/ LIG in

Master plan amendments Assignment of lease rights

• Simplification of sanctioning process. • Rental housing, dormitories and night

Evaluation of RAY scheme:

Land bank State government Used for affordable housing