Housing - India

The housing is an important social welfare measure and is an integral part of the nation’s
economic development.

Housing deserves a high priority in planning. But it indeed received very little attention in the
past. Main reasons can be stated as the tremendous growth in population, scarcity of land
and rise in the cost of construction material.

Industrial growth and employment opportunities, excellent facilities for higher education,
research, lucrative careers, social welfare in the town & cities have acted as powerful
magnets to attract rural population.

The urban population has therefore increased by about 30 % in the last decade. This has
resulted in not only over crowding and congestion inn the towns & cities but also aggravated
acute shortage of housing.

The planning commission had provided in the sixth plan period an outlay of Rs 9400 crore for
Urban Housing. Despite this the backlog of housing increases by a million units every year.

The housing problem revolves around three important factors such as poverty,
transportation, and low investments. All this must be accounted for in a successful urban
strategy.
To meet the growing demand of houses for the millions, we have not only to build houses but
also plan towns near existing urban areas. Neighborhood units, Satellite towns, Suburbs,
Garden cities, seem to be a reasonable solution for the housing problem. In short we require
properly planned long term housing strategy.
 Agencies for Housing Schemes

The following are the agencies established with a view to tackle housing problem under
various housing schemes:

 State Housing Board

 Co-operative Housing Society

 Private Enterprises

 Individuals
State Housing Board

To undertake housing programmes, to arrange for finance, to work in liaison between the
central agencies and the state, housing boards have been set up in many states.

The function of the Boards:

 To construct new houses to reduce the shortage of houses.

 To construct houses and to allot them under the categories of high income group, middle
income group, and low income group
 To select the sites for housing and decide the services to be provided
 To formulate schemes for self financing that help the middle and high income groups
 To construct commercial complexes, multi-storied buildings, and shops and then to lease
them out in rent so as to secure financial resources for the boards.
 To increase the standard of the types of houses to be constructed by other agencies.
 To implement the Housing schemes of State and Central Government as are entrusted to
it from time to time.
Co-operative Housing
Housing cooperative has been defined as: “A legally incorporated group of persons,
generally of limited means, pursuing the same cause of meeting the common need of
housing or its improvement based on mutual assistance. In such a cooperative, the
membership is voluntary and control is democratic, and members make an approximately
equal to contribution to the capital required”.

 These societies are formed to provide residential houses to members.

 They purchase land, develop it and construct houses or flats and allot the same to
members.
 Some societies also provide loans at low rate of interest to members to construct their
own houses.
 The legal body functions according to the rule and regulations framed by the society.

Different types of housing cooperatives

Housing cooperatives at the primary level can broadly be classified into four groups as
detailed below:
a. Tenant Ownership Housing Societies
b. Tenant Co-Partnership Housing Societies
c. House Mortgage Societies
d. House Construction or House Building 4 Societies
Co-operative Housing …

1. TENANT OWNERSHIP HOUSING SOCIETIES

Under this category the land is held either on leasehold or free hold basis by societies, and
houses are owned by members.

2. TENANT CO-PARTNERSHIPHOUSING SOCIETIES

These housing societies hold both land or building, either on leasehold or freehold basis
and allot flats to their members.

3. HOUSE MORTGAGE SOCIETIES

Such societies lend money to their members for construction of houses. The members have
to make their own arrangements for building their houses. This type of societies are really
credit societies as distinguished from other credit societies as per the objects for which
they lend, the duration of the loan and the security they demand.

4. HOUSE CONSTRUCTION ORHOUSE BUILDING SOCIETIES

Societies of this type spend money on behalf of the members for building the houses, and
the houses are handed over to members when ready and the money spent is recovered as
loan.
CHARACTERISTICS OF CO-OPERATIVE HOUSING SOCIETY
 Open membership
 Voluntary Association
 State control
 Democratic Management
 Service motive
 Separate Legal Entity
 Distribution of Surplus
 Self-help through mutual cooperation

FINANCE
A housing cooperative is normally non-profit, since usually most of its income comes
from the rents paid by its residents , who are invariably its members. There is no point in
creating a deliberate surplus except for operational requirements such as setting aside
funds for replacement of assets. It is relatively difficult to start a housing co-op because if
the idea is, for instance, to build a building or group of buildings to house the members,
this usually takes a significant mortgage loan for which a financial institution will want 14
assurances of responsibility. In the lifecycle of buildings, the replacement of assets
requires significant funds which can be obtained through a variety of ways:
1. Assessments on current owners.
2. Sales of Treasury Stock to new shareholders.
3. Draw down of reserves.
4. Operating surpluses.
5. Fees on the sales of units between shareholders and new and increases to existing
mortgages.
ADVANTAGES OF HOUSING COOPERATIVES

1. A housing cooperative is neither a public nor a profit seeking organisation.

2. Its principal objective is to eliminate economic exploitation as it is controlled by
members only.
3. Contrary to public housing, cooperative housing provides opportunities to its members
to control the house designs at the planning stages.
4. The maintenance of the estate is also in the hands of members, which leads to
maintenance at lesser expenses and in a better way.
5. Cooperative housing satisfies quantitative as well as qualitative aspects of housing.

Advantages Disadvantages
Easy formation Limited Capital
Open membership Problems in Management
Democratic Control Lack of Motivation
Limited Liability Lack of Cooperation
Elimination of Middleman’s Profit Dependence on Government
State Assistance
Stable Life
Private enterprisers

Now a days many private enterprises have entered the field of house construction. They
invest their own money for the construction of houses, flats, which are later sold at fancy
prices. Usually these enterprisers are interested to get high returns.

Individuals

Many Individuals also try to contribute to solve housing problem.