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Affordable Housing in India

There is fresh new opportunity for developers, architects, engineers and contractors in India, in the form of Affordable Housing. With a 1.9 Crore (19 million) shortage in urban housing, there is a huge gap that needs to be bridged. The market demand for affordable housing had already existed, but due to absence of an enabling regulatory framework and policies, developers shied away from the sector.
The present Central government has formulated several changes in the form of incentives and tax breaks in the Union budget to address the bottlenecks. The primary changes are:
1.     Infrastructure status to the affordable housing sector – This allows the developers to raise funds at lower interest rates.
2.     The maximum permissible size of the apartments was increased to 60 sq.m. of carpet area.
3.     The time limit for completing the projects was increased from three years to five years.
4.     100% deduction of income tax from profits from affordable housing.

Many large developers have seized this opportunity. Companies like Tata Housing Development Company, Shapoorji Pallonji, Mahindra Lifespaces, and Purvankara Developers. They have launched separate brands for the affordable housing segment;
·         Tata Housing - Tata Value Home Ltd.
·         Shapoorji Pallonji - Joyville
·         Mahindra Lifespaces - Happinest
·         Purvankara – Privident Housing

These affordable homes are priced in between ₹15 lakhs to ₹35 lakhs, with the strongest demand in the ₹15 – 24 lakh range. These apartments are located primarily in tier-II cities or on the outskirts of tier-I cities. Land cost is one of the biggest component of development costs, sometimes going up to 50-60% of the total cost of development in metros. Curbing the land cost development is of primary importance in affordable housing. Most developers prefer the JV model or the PPP model for affordable housing, where they have to invest minimum resources. This works out to be a win-win situation for the land-owners, developers, government, and the buyers.
Since large development houses have forayed in to the affordable housing sector, they are also trying to carry forward their attention to quality of design and construction of their market-rate housing, to affordable housing as well. So, apart from low-cost, there is also attention to quality of construction and materials. This is possible through new and innovative construction technologies and methods, being adopted by many developers.

The three key aspects of affordable housing are:
1.     Low cost of production through creative planning, and new construction technologies like pre-cast construction and  
2.     Reduced construction time through innovative construction methods and efficient project management.
3.     High quality of construction through integrated design and construction, within all the disciplines and construction teams, from conception to end of construction. This can be done by setting up processes that ensure the original design intent is not lost during construction.

The other aspects that should not be forgotten in affordable housing is Sustainability – environmental, financial and social. Environmental sustainability through energy-efficient design, reduces the operational cost of energy for the end-user. There is enough research and data to prove the strong linkage between affordability and energy-efficiency.
The financial sustainability of the project needs to be considered with the economic status of the users. Materials and finishes should be durable and low-maintenance.

Lastly, though every strata of the society has aspirations of higher standards of living, in the form of amenities, every social strata has their own unique lifestyles and ways of living and socializing. Architects and developers should be highly sensitive to this for the project to be truly a successful affordable housing project.

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