Housing For All: Can Hope Negate Challenges?
As of April 25, 2016, the government has identified 2,508 cities and towns in 26 states for beginning construction of houses for urban poor. However, certain phenomena make the success of Housing for All scheme tough. Let us look into some major challenges that the government faces in implementing its mission:
- About 97.2 per cent of the people in India who are classified as homeless live in dwelling units that are sub-standard. Of these, the ones that live in large cities dwell in slums as the real estate in these cities is expensive. People who live in informal settlements lack security of tenure as the land on which their settlement units stand is very valuable. They, however, want redevelopment but are unable given the huge expenses involved. In fact, such assets in the informal economy are probably greater than the government assets.
- Access to amenities is another challenge. According to the census commissioners’ report in 2012, urban slum dwellers enjoy amenities that are comparable to that of the amenities other urban Indians enjoy. In some aspects, the amenities slum dwellers enjoy are even better than that of other urban Indians and far superior to that of rural Indians. Field studies often confirm that though they would be happier with greater floor space and more amenities, they would not want to live elsewhere.
- Subsidies in the residential segment often fail to solve the problem because homes are not "portable". A low-income household in a slum, would not be willing to move into a formal unit in the suburbs. If evicted, they may live in informal settlements of even lower quality, in less centrally located areas.
- Even as the Housing for All scheme is seen as a national mission, local and state governments have a major role in executing such programmes. Due to lack of clarity on powers of various agencies, executing such schemes becomes more complex. Decisions that should be taken on a local level are often orchestrated by state government or central government. With the involvement of various agencies, communication among them is of key concern while implementing such large-scale programmes.
- We often see that the cost of building better infrastructure on existing urban land is less expensive than building more dwelling units in the periphery. For extending a city’s periphery more land would be required. As land costs more than infrastructure that stands on it, it is much cheaper to build infrastructure in existing areas, realign the streets, build better roads and provide access to tap water and better sanitation.
However, I never lost my hope. There are even good incentives to bring people to these new areas. For instance, the Pradhan Mantri Awaas Yojana, which was launched in June 2015 with an aim build two crore houses for urban poor including Economically Weaker Sections and Low Income Groups in urban areas by the year 2022 through a financial assistance of Rs 2 trillion from central government. This Mission has four components i.e. in-situ slum redevelopment with private sector participation using land as resource, affordable housing through credit linked subsidy, affordable housing in partnership with private and public sector and beneficiary led house construction/enhancement. Under these components, central assistance will be in the range of Rs 1 lakh to Rs 2.30 lakh.
There are few more catalysts. The features that the government will provide an interest subsidy of 6.5 per cent on housing loans availed by the beneficiaries for a period of 15 years from the start of a loan. Construction through eco-friendly technology, preference of allotting ground floors to differently able and older persons is set to act in favor of the mission.
Vijay Arora is the Vice President of real estate developer Jindal Realty Pvt Ltd.