Page 12 - CO JAN 2020

COVER STORY

Current Scenario
Regulatory challenges and major hurdles on the ground need to
be resolved to ensure proper implementation of the mega housing
scheme. Around October three construction projects under the
Pradhan Mantri Awas Yojana (PMAY), in cities like Mumbai have
now been shelved. They were earlier granted location clearance
for building 6,415 low-cost houses at these sites, but now it has
emerged that the lands in question were already reserved for other
public purposes. Another 50-hectare plot in Vasai’s Juchandra was
cleared for building 3,630 low-cost homes, but it seems the land
has a dense mangrove cover and has the status of a “reserved
forest.”
With no development permissible on the plot due to its eco-
sensitive belt, Maharashtra Housing and Area Development
Authority (MHADA), the nodal agency implementing PMAY the
Urban Development Department (UDD) for changing the plot’s
land use, the latter declined the request citing environmental
loss. Another 11-hectare plot in Khalapur, Raigad, cleared by the
Centre for building 2,685 low-cost homes, was already reserved for
recreational open space and public institutional space. The UDD
locked this proposal too on environmental grounds.
Experts have predicted that the low-income housing finance is
expected to grow at 30-40 per cent over the next five years. As
per the report, 62 per cent of the new housing finance is being
used to fund self constructed standalone houses while 38 per cent
of financing from affordable housing finance companies (AHFCs)
is taken up by low-income customers to “purchase apartments,
As per the 2011 census, over 30 per cent of the population lives often in areas with higher land costs, where self-construction is less
in urban areas. India currently reflects urbanization of 32 per cent affordable.”
(2017). Over 40 per cent of the country’s population is expected The report pointed out that large and mid-sized formal
to reside in urban areas according to the UN State of the World developers have largely been “unsuccessful in supplying
Population report in 2007, by 2030. 377 mn people out of India’s affordable housing to low-income customers” as projects tend
to be more expensive and located further away from the city in
1.21 bn population are urban dwellers as per the 2011 census. less desirable locations. These distant locations also may lack
According to a report by PropTiger.com, over a million housing infrastructure and require large investments, which further shrink
the already low margins of such projects.
units will be delivered between 2019-2020. It has been reported
that out of these, a whopping 2,05,279 were delivered within While 1 per cent of the low housing supply comes from large and
branded developers, around 9 per cent of the supply is built by
the first half of 2019. The rest 8.5 lakh homes are said to be mid-size and formal developers. The rest 90 per cent of the supply
available in the next year and a half. The highlighting factor is came from small and informal developers who typically construct
that the remaining homes that were sold in the second half of small projects on the outskirts of cities, like in the jurisdiction of Gram
2019 are unsold units. Our cities now face the consequences of Panchayats.
exponential urbanization and ‘development’ - increase in squatter It is also a well assumed, that there is a good chance of the urban
and slum settlements, sub-standard and lack of basic services, household living in slums could provide an opportunity for housing
companies to expand their reach as slum dwellers comprise 17
limited access to quality healthcare and education, all hinting at per cent of the urban population. In total, around 14 million urban
a substantial decrease in the quality of life of the migrants. households live in slums with poor living conditions. According to
recent data records, the estimated market for housing loans in
notified slums is about `23,000 crore.
Out of a validated demand of 1.12 Cr
houses in urban areas, 1 Cr houses have Affordable?
already been sanctioned. Further, a total Mumbai alone accommodates 12.5 mn people and is the largest
of 57 Lakh houses are in various stages metropolis by population in India, followed by Delhi with 11 mn
of construction of which, nearly 30 Lakh inhabitants. Witnessing the fastest rate of urbanisation in the world,
houses have been completed. Compared
to the earlier JnNURM scheme, PMAY (U) Delhi’s population rose by 4.1per cent, Mumbai’s by 3.1per cent
has achieved 10 times more in a span of and Kolkata’s by 2per cent as per the 2011 census in comparison
4.5 years, whereas the earlier scheme had with the 2001 census.
taken 10 years to achieve a significantly
less number. Pradhan Mantri Awas Yojana Affordability isn’t an issue since over 1.2 lakh of the over 2.32
(Urban), [PMAY (U)], is one of the largest lakh homes unsold units, are homes priced below `45 lakh. It
affordable housing programmes in the world. begs mention here that the government in the past one year has
HARDEEP S PURI, MINISTER OF STATE (I/C), launched many measures to boost demand in the affordable
HOUSING & URBAN AFFAIRS housing segment to fulfill its ambitious target of ‘Housing for All

12 CONSTRUCTION OPPORTUNITIES|JANUARY 2020