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AFFORDABLE HOUSING & its future in India

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The Concept of Affordable Housing

• Affordable housing caters to the lower and middle income groups earning less than the median household income (1.3-3 lakh annually).

• The monthly carrying costs of affordable houses should not exceed 30-35% of household income.

• These homes range in the price bracket of Rs. 20 - 50 lakh with 300 to 600 sq. ft. of area.

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Need for Affordable Housing in India

• As per 2011 census, urban population is accelerating at a CAGR of 2.8% leading to shortage of land and housing.

• Excessive urbanisation and skyrocketing property prices have forced people to live in slums in deteriorating living conditions.

• According to the 11th Five-Year Plan 2007-2012, India has a shortage of 26.53 million homes.

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• Cities like Delhi NCR, Chennai, Bengaluru, Mumbai, Kolkata and Pune need 5,34,400 housing units.

• It is clear that affordable housing is the only way the government can fulfill its dream of providing ‘Housing for All by 2022’.

• Minimum requirement of 30 million houses by 2022.

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Characteristics of Affordable Housing

A JLL report titled “Affordable Housing in India”, has attributed certain features to affordable housing units.

• A minimum carpet area has been assigned to these dwellings for different population sections.

-Economically Weaker Section (EWS) - 250 sq. ft. -Lower Income Group (LIG) - 300-600 sq. ft. -Middle Income Group (MIG) - 600-1200 sq. ft.

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• Should have basic amenities such as power and water supply and sanitation.

• Provision of civic amenities such as schools, parks, healthcare, etc. either within the project or in the neighbourhood.

• Located within a 20 km radius of workplaces with decent connectivity to public transit hubs.

• EMI should not amount to more than 30-40% of the buyer’s income.

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Stakeholders of Affordable HousingThe 3 major stakeholders in affordable housing segment and their roles:• Government: The

Government of India has taken measures such as subsidizing interest rates on loans, increase in floor space index (FSI), exempted profits from housing projects of taxation, and launched a major initiative of providing housing for all Indians.

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• Real Estate Developers: They are now launching projects within the same price range and have even agreed to operate on lower margins. Developers like DLF and Tata Housing are working to provide affordable housing units in the coming 4 years.

• Financial Institutions: Banks have agreed to fund suitable affordable housing projects and many microfinance institutions are funding EWS housing units.

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Budget 2016’s Impact on Affordable Housing

Many experts are looking at the Union Budget 2016 as one great thrust for promoting affordable housing in India. Some measures announced in the Budget 2016 will have a definite positive impact on the affordable housing segment and will go a long way in assisting the Government of India’s initiative of providing ‘Housing for All by 2022’.

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• Firstly, 100% deduction on profits will be given to firms undertaking the construction of housing units measuring 30 sq. meters in the 4 metros and up to 60 sq. meters in other cities.

• Developers will not have to pay any tax on their profits encouraging them to launch more affordable housing projects.

• This will also help in providing housing facilities to the masses.

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• First time home buyers will get an additional deduction of Rs. 50,000 on home loans up to Rs. 35 lakh annually.

• This measure will be applicable on houses costing up to Rs. 50 lakh.

• They will also get service tax exemption allowing many families to get a roof on their heads easily and within a relatively lower budget.

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• An exemption on Ready Mix Concrete that was announced in Budget 2016 will lower the construction of costs of housing units, benefitting the developers at large.

• The government allocated Rs. 2.18 crores for promoting economic and infrastructure development in a sustainable manner.

• These measures will encourage the growth of affordable housing in a country like Indian where millions are in need of proper housing facilities.

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Major Affordable Projects in NCR

Realising the vast potential of affordable housing segment in India, developers have already begun to venture into this arena. The National Capital Region has lately seen a rise in the number of affordable housing projects that are spread across Noida, Greater Noida, Yamuna Expressway and NH-24.

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NoidaAjnara Ambrosia: This is a residential project by the revered developer, Ajnara Group, located in Sector 118 in Noida. The beautiful Spanish architecture, broad archways, and wrought iron work sets apart this haven of comfort and luxury, available at affordable rates to the end customers.• 17 acre area• 2/3 BHK apartments (1095 - 1995 sq. ft.)• Air conditioned lobby• 24 hour supply of water and power• Earthquake resistant structure• Internet connectivity• Contemporary facilities• Connected to major locations in NCR• High tech security

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Samridhi Grand Avenue: A grand yet affordable venture by the Samridhi Group, this project is a perfect fusion between excellent housing facilities and fantastic connectivity amidst lush greenery.• 2/3 BHK (980 - 16856 sq. ft.)• Loan approval leading banks• 70% open spaces• Vaastu based architecture• Situated on 130 m wide road• Superior quality fittings• Earthquake resistant building• Grand club house• Cafeterias• Advantages of connectivity

Greater Noida

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Migsun Wynn: A project laced with all possible comforts, Migsun Wynn comes from the well-established Migsun Group in Eta 2 in Greater Noida. This is a venture laden with lush green surroundings and impeccable standards of life.• 2/3 BHK (1060 - 1650 sq. ft.)• 3 side open plot• 25 storied high rise towers• Build on a 100 m wide road• Round the clock water and power supply• 24x7 security• Club membership• Play facilities for children• Metro connectivity

Greater Noida

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Aditya Urban Homes: Located within Aditya World City, this project is an amalgam of world class facilities and comfortable and affordable living spaces presented by Aditya Group.• 1/2 BHK (585 - 840 sq. ft.)• 80% open areas• 24 hour security• Shopping arcade • Health center• Open air theatre• Intercom facility• 24 hour water and power supply• Connectivity to Ghaziabad, Noida, Indirapuram

NH-24

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Gulshan Botnia: Located at a sought after location of Sector 144, Gulshan Botnia is the brainchild of Gulshan Homz. This project brings together comfortable living and budget housing like never before.• 2/3 BHK (1025 - 1475 sq. ft.)• 12 storied elegant towers• Neo-classical façade• Central landscape podium• Adjoining a green belt• Seamless customer services• Connectivity to Delhi, Noida, Ghaziabad• Neighbourhood laced with diverse facilities

Yamuna Expressway

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Gaur Yamuna City Villas: Located within Gaur Yamuna City, this is one of the most sought after residential project of Gaursons India Ltd. These villas are sprawled across endless expanse of greens offering beautiful residences at affordable rates.• 3/4 BHK villas (990 – 1440 sq. ft.)• 6-screen multiplex• 5.7 acre retail complex• Contemporary club house• Community center• Conference hall• Schools, hospital, tec.• Pollution free surroundings

Yamuna Expressway

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References• http://www.joneslanglasalle.co.in/india/en-gb/Research/

Affordable_Housing_in_India_2012.pdf?27e6f554-2aa8-4864-8bc3-9127a4b902bc

• http://www.kpmg.com/IN/en/IssuesAndInsights/ThoughtLeadership/Affordable_Housing.pdf

• http://economictimes.indiatimes.com/wealth/real-estate/budget-2016-budget-to-boost-demand-supply-of-affordable-homes-realtors/articleshow/51197365.cms

• http://economictimes.indiatimes.com/wealth/real-estate/budget-2016-gives-massive-push-to-affordable-housing-supply-and-construction-activity-seeks-to-spur-demand/articleshow/51191895.cms

• http://www.hindustantimes.com/real-estate/affordable-homes-get-a-push-in-budget-2016/story-uJsS0LP6WOAP7QowejB0WO.html

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