Success of urbanisation depends on making houses affordable

Success of urbanisation depends on making houses affordable

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The extent of the affordable housing challenge varies from city to city, from state to state and from region to region.The housing market is affected not only by market conditions but also, nowadays, to a great extent,  by socio-political factors, environmental factors and the regulatory framework. Therefore, finding solutions in a particular city requires a broader understanding of what constitutes affordability and the factors that affect it. At times, the government may have to intervene, to ensure smooth functioning of the market, both on the supply and demand side

Every hour nearly 2,000 Indians move from rural areas towards cities in search of better opportunities. This trend may gain further momentum unless the government is able to provide the rural mass better employment opportunities and living standards. At the same time our cities are already overcrowded with the available infrastructure grossly inadequate to meet the growing population.

One of the biggest problems faced by the migrating population to cities is that of accommodation and that too at affordable rates and within reasonable distance of place of work. Everyone deserves a safe place to live: it can transform the quality of life of individuals and families. A world in which only a few can afford housing is not sustainable. But Indian cities are facing major challenges in providing safe and adequate housing for their people, especially cities that have already reached the saturation point where the affordable housing options are limited.

Even those who earn steady income are unable to buy or rent affordable housing as the rents remain alarmingly high and out of line with incomes forcing many to pay more than half of their income each month on housing. Most of the people who work in offices including teachers, police officers, firefighters and nurses cannot afford to live near the communities they serve, instead having to live in far off places and spend too much of money and time daily on commuting.

Indeed the task at hand is challenging one and overcoming this challenge is easier said than done, but at the same time it’s not an impossible task either. The extent of the affordable housing challenge varies from city to city, from state to state and from region to region.

The housing market is affected not only by market conditions but also, nowadays, to a great extent,  by socio-political factors, environmental factors and the regulatory framework. Therefore, finding solutions in a particular city requires a broader understanding of what constitutes affordability and the factors that affect it. At times, the government may have to intervene, to ensure smooth functioning of the market, both on the supply and demand side.

Often the government has a greater role to play to sort out the issues relating to land acquisition and regulation, upgrading property tenures, financing models, and design and development costs. Initially, the programme may have to rely on the government support system and incentive schemes for its success. However, long term reforms may gradually reduce the dependency of the programmes on government supports. Reforms need to address both the supply side and the demand side of the housing market, and involve public-sector, private-sector and non-profit stakeholders.

The success of the programme also calls for the judicious inclusion of the private sector. Further, non-profit organizations such as housing cooperatives and microfinance institutions may have to play a critical role in bridging the gap between government and the private sector to improve the affordability of housing. This will also allow working with individuals to help them understand their options and make informed decisions.

India will become the third largest economy in the world within next few years. But it is upto us to decide whether we should reach the landmark with millions of families still struggling to have a roof over their heads and exposed to extremes of the climate every year. Though the destination is already decided now we have to adopt a suitable path to reach there. India will truly become the third largest economy only when all its citizens get their basic needs including housing.  A nation becomes developed one only when basic the needs of all residents are met and ensuring affordable homes is a critical step in that direction.

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