to offer housing for the low-income population.”
A related challenge is the lack of master plans for areas where such housing typically comes up. “Banks are willing to finance only those projects that come up in areas with a master plan. There are several towns and cities where the demand is high, but we are not able to venture for they lack master plans,” says Getamber Anand, president-elect, Confederation of Real Estate Developers Associations of India (Credai).
The next issue is regulation. “Currently the policy direction is tailored towards increased FSI (floor space index), with high rises being seen as a solution to the problem of affordability. FSI does not work in all markets,” says Kulkarni.
“Regulations being followed for a usual middle/high income project is being followed for such projects as well. What purpose does it serve when I am building two low rise developments with small units separated by a 70 feet road? We need a new set of rules for such projects,” says Garg.
Kulkarni calls for a special environmental certification mechanism for low-income projects so that more supply can enter on larger tracts of land and would not get caught in environmental clearance tangles due to the threshold norms. “There has also got to be a mechanism for reserving lands in non-metros for such projects,” says Kulkarni.
Developers in this space are exploring new technologies that bring in a “manufacturing mind set” to housing projects. However, they are not taking off since projects are scattered and haven’t reached numbers that can afford economies of scale. “There is also the issue of excise duty. The raw materials are taxed, and so is the finished product. This has to be rationalised,” says Kulkarni.
With nearly 49 per cent of such home buyers being under 35 years, there is a huge opportunity waiting to be tapped, says the report, and identifies “enabling environment” as a key deliverable from the government to enable home ownership.