Making Housing more affordable and sustainable
Attributed to Dhaval Monani, Founder and Managing Director, First Home Realty Solutions~ India needs 40 million urban homes, if we consider that over the next 15 years more than 300 million people are expected into move to cities then we are looking at a shortfall of over 100 million units. Majority of these homes are in the affordable segment. Though this is a huge opportunity it is also a massive challenge. Over the last few years the government has stepped up with a number of incentives for the private sector while simultaneously increasing the supply for the lowest segment through its Pradhan Mantri Awas Yojana (PMAY). They have been successful to an extent and the private sector has also benefitted as the affordable housing segment has remained the one sustainable asset class in a challenging market. Going ahead if we are to address the massive under taking of creating 10s of millions of homes, we will need to rethink the conventional method of development and make these homes not only more affordable but sustainable and easier to maintain. The biggest component to the cost of a home is land. It is also the one area with the most ambiguity and risk - this is where the government can create the maximum impact in the least amount of time. The current models of government development through PMAY are capital inefficient. The government is unable to meet the demand and due to the inefficiencies is not able to get the maximum value out of its landbanks and expenditure. If we were to consider rural as well, we are looking a further deficit of 20 million homes in addition to the 40 million urban ones. A robust Public Private Partnership (PPP) model in this context would help not only bring out efficiencies but go a long way in addressing this unmet demand. Such a move would also give a huge boost the sector in general. PPPs would also give developers access to unencumbered land for private development. This becomes even more important in light of the COVID crisis when the demand for these homes could increase substantially. In India it is traditionally home ownership that has created the most security for the population in the Economically Weaker Section (EWS) and Lower Income Group (LIG) segments. The pandemic has been unprecedented as in addition to the economic crisis the threat to life is also a reality. The main affected are those without access to adequate housing. Addressing affordable, adequate and safe housing for all should be a priority for the government going ahead. When talking about the affordable sector, we seldom look at sustainability - most design schools don’t even have programs on this topic and the industry has made little progress on making housing sustainable. Organisations such as the International Monetary Fund (IFC) part of the World Bank Group has a department dedicated to promote Green Buildings that works with both start up and existing companies. So, it is heartening to see an Indian University, Anant National University setting up a Fellowship on Climate Action (FCA) that will help bring forth innovation not only in the construction and real estate space but to other related disciplines. Lately a wave of start-ups have emerged that are bringing fundamental change in building materials and practices. Saltech, a company that uses unsegregated plastic to make paver blocks for roads is one such example, we need many more of such companies. The coming quarters will need a huge push by the government to keep the Real Estate Sector buoyant, the sector contributes 9% to the GDP and employs over 40 million making it a bellwether of the economy. The government has a chance to fundamentally change ongoing building practices by linking various incentives it offers to how sustainable the buildings are not only to make but to run and maintain.
Tags : Interviews