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Indian Real Estate News : Chennai
India facing urgent need of affordable housing
Source: The Times of India Dec 16, 2013
Affordable housing in the last five years has been the most talked about topic. Where industry experts like to believe that there has been a lot of progress on the affordable housing front but the fact is that a lot more needs to be done to meet the actual demand.

"There is a demand for 15 million affordable homes and the demand for these homes comes from buyers with an income of Rs 10,000-25,000 per month," says Vikram Jain, who leads low-income housing practice at Monitor Deloitte, a management consulting firm.

"The solution to the demand for affordable housing is to build homes with clear title, provide lighting, water, electricity and move people away from renting in a poor neighborhood," he says.

"The idea is very simple, i.e. to build small flats of 229 sq ft in space, with no wastage of space and costing around Rs 8 lakh," Jain adds.

So what is stopping in development of such homes? Profit margin is not as big in low income housing, which could be a deterrent for developers to get into this segment. "It would help if the government declared real estate as an industry. This will allow real estate players to get capital at cheaper rate and more easily. Eventually, it will help in reducing prices of homes," says Geetamber Anand, president, elect, CREDAI.

Another big problem with low income housing is that 70 per cent of low income people donít have access to home loan. According to industry experts, inefficient government policies are also hampering the development of affordable housing. "We found from the survey that the basic problem is government norms. When you develop a low-cost housing, the norms you are subjected to are the same that apply to the high income groups as well," Raghav Garg, director, Landcraft Developers.

Norms, such as road width, parking, single window clearance, etc also apply to low-income housing. "Therefore, there is more incentive to do unauthorised development rather than authorised development," he adds.

"Also, because people don't want to buy homes far away from their workplace is also a reason that not many affordable homes have come up", says Manish Srivastava, CEO, Muthoot Housing Finance Company Ltd. "So, you need good infrastructure as well to encourage housing to come up near cities," he says.

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