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National Convention on Affordable Housing For All Mumbai June 02, 2007 1 Presentation Overview Concern Theme Objectives Housing-An overview Critical Factors Urban Housing and Economy National Urban Housing & Habitat Policy Market Oriented Approach Builders Role Conclusion Looking Ahead Slides 03 04-05 06 07 08-09 10 11-13 14 15 16 17 2 THE CONCERN The growing housing shortage issue calls for a well coordinated and concerted effort of all the stake holders especially those from the private sector to ensure that all segments of the population aspiring to own a house should be catered. 3 THEME • Housing is an important source of financial stability and economic well being as also social inclusion. • The theme “Affordable Housing for All” has been espoused by the Ministry of Housing and Urban Poverty Alleviation. • The Government endeavours to seek partnership with all stake holders specially the private sector in order to arrive at a viable solution. 4 Affordable Housing for All • “Affordable Housing for All” is consistent with the Government’s approach to financial inclusion. • The two mutually reinforce each other. • “Affordable Housing for All” is a step beyond and can work as well in tandem, with financial inclusion approach 5 OBJECTIVES OF THE CONVENTION Development of integrated solutions for “Affordable Housing for All” - viable and sustainable. 6 HOUSING – AN OVERVIEW India’s population (2nd highest in the world) Total : 1,028 m (2001 Census) Urban : 286 m ( 28% ) Rural : 742 m ( 72% ) • Estimated Housing Units Shortage as on 01.04.2007 Total : 24.7 m* Urban : 10.60 m Rural : 14.10 m *Source: Report of the technical group on estimation of housing shortage constituted in the context of preparing the 11th Five Year plan document • More than 70% of the shortage was for the poor 7 CRITICAL FACTORS Two critical factors determining provision of housing for the masses are: (i) Accessibility to housing finance issues: • the rapidly increasing prices of dwelling units • The underwriting criteria adopted by the lending institutions include regularity of income, equity contribution by the borrowers, and other pre-requisites such as collaterals, guarantee etc., which are difficult for a large segment of the population to fulfill. • Subsidy, land title and land tenure, longer repayment periods, risk perception etc. 8 CRITICAL FACTORS (ii) Affordability of house • • Affordability involves not only cost of housing finance but also that of land, infrastructure, building materials, technology. high interest rates 9 Urban Housing and Economy • Housing activities, not only generate employment opportunities but also add to the capital formation. • Job opportunities get generated resulting in all round economic development • Backward and forward linkages of housing investments result in significant multiplier outcomes for employment and output, which in turn contribute significantly to GDP. To sum up- Housing activities, can prove to be an effective tool for and a critical source for Individual and Social well being, “Employment Generation”, “Poverty Alleviation” & significant contribution to GDP. 10 National Urban Housing and Habitat Policy The ultimate goal of the Policy is to ensure that the basic need “shelter to all” is fulfilled The central theme of this Policy is on creating strong • Public - Private partnerships for tackling the housing and habitat issues • Informal and formal sector integration • synergise the potential of all actors and stakeholders in the housing sector. 11 National Urban Housing and Habitat Policy • The private sector as a long term partner would be encouraged to take up land assembly, housing construction and investment in infrastructure services. • The cooperative sector is expected to play a lead role, particularly in land acquisition, allotment of land and housing sites to encourage group housing and development of amenities in their projects 12 National Urban Housing and Habitat Policy GOVERNMENT INTERVENTION The Government could consider fiscal concessions, enable legal and regulatory reforms and create an enabling environment • through efficient functioning of the land market • Streamlining of all approval processes • provision of efficient infrastructure • e-governance viz. introducing electronic record for land and bringing in more transparency in the record of land and houses. The Ministry has also been convening the State Housing Ministers and the State Housing Secretaries Conferences and sensitizing them about the need for reforms at the State level as an on going process. 13 MARKET ORIENTED APPROACH • There is a limit to which such subsidies can be provided. • A more viable and sustainable strategy has to be evolved to meet the challenge of housing finance for the sector. 14 Builders Role The Builders have to take the lead role in • land assembly, construction of houses an development of amenities within projects • Adoption of new and innovative systems of construction for making housing affordable. • Optimum utilisation of land to reduce on infrastructure costs. • Completion of projects within stipulated timeframes and cost. • to encourage group housing by this sector. • State Governments to work out schemes in collaboration with the private sector • slum reconstruction on cross subsidization and TDR basis. 15 CONCLUSION • Builders have large operational spread across the country with large outreach capabilities. • There is a huge business potential for the Builders for providing affordable housing. • New and innovative systems of construction technologies, design and planning options have to be evolved for different segments of the society in order to meet the demand of the target groups. 16 Looking Ahead Development of a roadmap jointly for achieving the objective of “Affordable Housing for All”. 17 Thank You 18