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Indian Real Estate News
CREDAI expresses resentment government's reservation on LIG housing
Source: ET Bureau Nov 06, 2012

Realty Developers apex body CREDAI has expressed strong resentment to the Union Government's proposal for compulsory reservation of 35% of dwelling units built for the economically weaker sections (EWS).

"Such a directive, without any incentives to the developer community, would only burden the open market buyers, mainly the middle income group, which will be forced to cross-subsidise the LIG or EWS" said a CREDAI memorandum to Union Minister for Housing and Poverty Alleviation, Mr. Ajay Maken.

CREDAI, with over 8,800 members across India and it is the largest representative body of the developer community, ha sought time with Mr. Maken to discuss the various issues concerning the housing industry.

CREDAI National President Mr. Lalit Kumar Jain said the government should model the housing policy to suit the poor in such a way to encourage developers to rush for it rather than taking compulsory steps which ultimately might be counterproductive as they could lead to a fall in the housing stock.

The demand-supply mismatch is one of the reasons for the market price movement and any further fall in the housing stock will only contribute to rise in prices, CREDAI argued.

Central guidelines must have a systematic and rational approach on incentives, cross-subsidization and be aimed at solving problems in a practical manner. For instance, reservation for EWS / LIG is not possible in every project across the board as maintenance will be a major issue.

High rise buildings with lifts and other amenities push up not just the cost of the project, but also the subsequent maintenance. Most LIG or EWS families might not be able to bear the high maintenance cost which would mean that the MIG and others might have to bear the brunt. The EWS and LIG categories will have to be given walk-up apartments which will not be more than four-storey high and this in turn could pressure in FSI.

Tag: property buying in india, real estate trends, property of india, real estate in india, CREDAI
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