Transcript Low Income Housing: State of the Market

Low Income Housing: Supply Ecosystem
Deloitte Consulting LLP
April 2013
Challenges in the Supply Ecosystem
Expressed needs and latent needs
Building at
Scale
Environmen
tal Impact
LIH developers struggling with rising costs of labor and material

Construction costs are reported to have increased by 15-20%
on yearly basis

LIH is a ‘low-margin’ business. Cost increases have forced
several developers to relook at their LIH plans

While developers have not expressed this need, it is
imperative to build for scale given the huge supply-demand
shortfall in this segment

Developers should start thinking about long-term
environmental impact of construction materials
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Rising
Constructi
on Costs

Market Response to these Needs & Challenges
Rising
Construct
ion Costs

Developers stagger sales, reduces risk of construction cost
increases and maximizes realization

Multiple developers have expressed interest in using fiber
walls, pre-fabs, fly ash bricks, etc
– However, nervous about their capabilities and/or
customer’s reaction
Building at
Scale

Dedicated LIH Developers are building systems and
capabilities
– Land teams constantly searching for land
– Sales teams from professionals in the two wheeler business
Environmen
tal Impact

A few players like VBHC & M&M are using Aluform to ensure
consistent quality, reduce timelines and dependence on labor

Very little activity; need to make this an industry standard
more
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Copyright © 2013 Deloitte Development LLC. All rights reserved.
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– Most developers are “prime” as contractors are unreliable