What is affordable housing?

Housing units that are affordable to those with incomes below the median household income are referred to as affordable housing. Affordable housing has become a big issue, particularly in developing countries where the majority of the population cannot afford to buy a home at market value.

Affordable Housing Scheme

Concerning the PMAY scheme, The Pradhan Mantri Awas Yojana (PMAY) was established in 2015 with the goal of providing a pucca house to all qualified urban Indians by 2022. The minimum housing size is 25 square metres (up from 20 square metres) with a clean cooking area. In this programme, the central and state governments will split the cost of unit aid 60:40 in plain areas and 90:10 in north-eastern and Himalayan states. In-Situ Slum Redevelopment (ISSR), Affordable Housing in Partnership (AHP), Credit Linked Subsidy Scheme (CLSS), and Beneficiary Linked Construction (BLC) are the four verticals of the PMAY scheme (BLC).

Issues with affordable housing

Land scarcity, high population density, fast urbanisation, and ill-conceived restrictions have resulted in a scarcity of development-ready land parcels. Excessive controls over cities’ centre districts, as well as obstacles in land recycling, intensify the trend toward the periphery. Land acquisition has long been a difficult problem, resulting in land mafias and unlawful encroachments, as well as a reduction in the availability of land at a reasonable price.

Land parcels that can be sold are scarce

Public agencies such as railways, ports, and defence authorities possess large areas of centrally placed urban land. Because the authorities are often unable to supervise their holdings, these non-marketable regions encourage the growth of slums and squatter settlements. Land for mass housing is difficult to come by because of the scattered and poorly planned towns. Property purchasers assess a variety of aspects in addition to project quality and cost, such as basic amenities, connection, infrastructure, and so on. As a result, AH demands a sufficient quantity of well-serviced land, which affects prices and willingness to pay.

Problems with titling

India currently lacks a strong framework to defend land rights. The land title has two aspects: first, the state’s legal acknowledgement of property rights through a system of titles; and second, the state’s facilitation of efficient trade-in rights through a registration process. Both of these elements can be found in India, although only in partial form. For starters, not all land transactions, such as land acquisitions, court rulings, mortgages, and agreements, necessitate registration. Second, while Indian law requires obligatory land sale registration, the registration body is not required to verify history or ownership; so, the transaction, not the title, is what matters.

Costs are increasing

Land and building expenses have risen, driven by increases in the cost of construction supplies and labour. Because of the disparities in building indices and incomes across the country, AH financing is limited. Even if clients have regular salaries when employed in the unorganised sector or lack income verification as necessary in the loan process, acquiring finance is tough from the customer’s perspective.

Regulatory restrictions

Project sanctions can take years to complete and require approval from as many as forty departments at the national and sub-national levels, including the environment, fire, revenue, and water departments, as well as the traffic police. Many entrepreneurs are put off by the resulting time and transaction costs. Furthermore, the lack of clear and transparent regulation exacerbates the situation. Building codes, floor space index criteria, and zoning and development plans of metropolitan municipal governments, for example, are frequently unclear, with overlapping guidelines.

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