Reforms Needed to Meet Affordable Homes Demand

by RICS Studies

Urbanisation rates have varied across India over the past 30 years. Studies have confirmed that urbanization has been largely concentrated in states with the highest per capita income & within India’s larger metropolitan cities which are now home to some 44 per cent of the total urban population in India.

India’s housing system which is made up of a formal and an informal sector has seen the maximum housing shortage in the EWS (Economically Weaker Section) and LIG (Low Income Group) categories.

The housing shortage in the mid-income group is slightly more 4 % of the total pie. In addition to this, income inequalities in rural & urban India are growing.

Affordable housing options..

Faced with a lack of accessible or / affordable housing options, growing numbers of poor & not so poor households have resorted to residing in informal housing units or settlements.

This is also corroborated by the fact that India has the highest proportion of workers in the informal sector in the entire world.

The primary reason that has come to light is that the housing and urban development come under state functions. Therefore various policy initiatives so far have failed to give the desired results.

In addition to this, there have been some limited attempts to overcome constraints on land supply.

Rental housing..

Rental housing, which has the potential to reduce the burden on cities, have not been promoted at a large scale.

According to the findings of the task force on Rental Housing, set up under the Ministry of Housing and Urban Poverty Alleviation, there is a growing appreciation that the rental market has an important role to play in accommodating ‘migrant’ workforce that own housing elsewhere.

It also suggests that an expanded rental market would ease the pressure for government subsidies for serviced plots and owner occupied units.

Some of the mandatory reforms needed for the country are Rent Control Reform, Rationalization of stamp duty, Enactment of a Community Participation Act to give local communities more say in the design and implementation of local plans, Transfer of planning and other functions from state to municipalities.

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