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Affordable Housing in Mumbai

Affordable Housing in Mumbai
Affordable Housing is one of the most important issues for Mumbai's development. due to its complex and dynamic nature it is a big challenge for the Government, urban planner and all stakeholders. In Mumbai, approximately 42% of the people live in slums and about 57% households live in one-room tenements, with 9 out of 24 wards with more than 50% slum population. (Census 2011)
Affordability is a relative concept. It means different things to different people. But then how do we define Affordability? A high-level Task Force on Affordable Housing for All, set up by the Government of India in 2008, and headed by Deepak Parekh, has put forth the following definition of affordable housing: (http://www.naredco.in/pdfs/report-high-level-task.pdf)
For EWS/ LIG:
≤ 4 years of income or EMI/ Rent ≤ 30% of gross monthly income
For MIG:
≤ 5 years income or EMI/ Rent ≤ 40% of gross monthly income
Currently the two approaches being adopted to address the issue of affordable housing in Mumbai are:
  1. Free or subsidized housing through SRA Schemes (Slum Rehabilitation Authority) and MHADA Schemes.
  2. Incentivizing the private sector by increasing FSI.
Both these solutions are not delivering the desired results, and the housing situation in Mumbai is not showing any signs of improvement, especially in the affordable sector. There is a need to formulate a sustainable and innovative solution to this housing crisis.
Firstly, it is important to understand that Affordable Housing is not a design problem. Though cost of construction and material and space efficiency play a significant part in reducing the development cost of a project, there are other factors which play a much greater part in determining affordability.
According to noted Urban Planner, Shirish Patel, the 3 factors for the success of Affordable Housing are:
  1. Access to public transportation
  2. Provision of "incremental" housing
  3. Availability of affordable land
These three factors have to be implemented simultaneously for the success of Affordable Housing. In cities like Mumbai, where the land prices account for almost 60% of the project cost, it becomes impossible to provide housing at affordable cost within city limits, close to public transportation. If the component of land price is taken out of the equation, the problem becomes much more manageable. This is possible by way of Land Trusts. In the USA, Community Land Trusts have been successfully providing affordable housing in urban areas since the 1970s.
Through Community Land Trust, the ownership of the land lies with the trust, only the built house is owned by the residents. The sale price of the house is then exclusive of the price of the land, and the appreciation in value of the land, can fund the maintenance and improvements of the development.
Another solution, that is being implemented quite successfully in other parts of the world, is Inclusionary Housing. Inclusionary housing shifts the burden of providing affordable housing to the private sector. A private developer, when constructing a new development, has to set aside a certain percentage of the land area/ built area for affordable housing. This may range anything between 25% to as high as 50% like in Spain.
A third option of making land available for Affordable Housing is through Town Planning Schemes (TPS). In a Town Planning Scheme, the land parcels are readjusted to optimize the land and maximize its value. The same amount of land can be readjusted, and existing residents encouraged to give up a certain percentage of their land (40% - 50%) for public good, including affordable housing. The incentive for giving up and is the increase in value of the land due to improved amenities and infrastructure.
There is an urgent need to put Affordable Housing at the center of Public Policy. Though the Maharashtra Government has made a start with the Draft Housing Policy in June 2015, there is still much more that needs to be done for implementation.

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