WRITTEN BY SRIRAM MAHADEVAN, BUSINESS HEAD, HAPPINEST, MAHINDRA LIFESPACES
Access to decent, affordable housing is embedded in the United Nations Universal Declaration of Human Rights. However, cities the world over are today faced with the challenge of housing not only their poorest citizens, but also of providing quality housing at a reasonable cost for low and middle-income populations.
Recent reports estimate that if current trends persist, the global gap in affordable housing could grow to 440 million households by 2025. The lack of affordable housing is thus clearly a pressing challenge worldwide; however, what we must remember is that it is also a significant opportunity.
Migration, industrial growth and job creation mean that today’s cities are integrated housing markets that cater to a mixture of incomes and socio-economic backgrounds. Catering to housing needs across income segments – especially affordable housing – can raise productivity, drive GDP growth and improve the quality of life of citizens. The sheer volume of affordable homes that need to be built provides the opportunity to shape urban development that is inclusive, sustainable and resource-conscious.
India’s housing deficit is slated to reach 38 million units by 2030, of which 95% comprises the Economically Weaker Sections (EWS) and Low Income Group (LIG) segments. Yet another significant segment consists of homes for the upper end of LIG band, and lower to middle end of MIG band, or the emerging Indian middle class. More than 80% in this category currently occupy congested homes in compromised and unsustainable conditions. The need of the hour is for all stakeholders to participate in this mammoth task of addressing the housing deficit.
The key supply-side constraints for affordable/value housing in India include lack of economical land parcels at well-connected locations, and access to low cost finance. There is an underserved market which caters to the demands of the emerging middle class, which are ever rising due to the rate of urbanisation that our country is witnessing – 10 million every year. However, affordable housing ecosystems cannot exist in isolation. Parallel focus on urban infrastructure such as roads, utilities, mass rapid transit systems and other social infrastructure is imperative to make the affordable housing proposition truly sustainable, across geographies.
Given the constraints of land pricing and availability in core city areas in India, affordable or value housing projects are typically located in urban peripheries or suburbs wherein, more often than not, basic urban infrastructure and connectivity to commercial districts is missing. In fact, efficient connectivity to the workplace is a key consideration for customers across segments, but especially important for end users of affordable projects, who have to contend with increased conventional transportation costs and time.
Urban planners around the world have acknowledged the need for the integration of land use and transportation (LUT) planning for many decades. Given their existing densities and public transportation options, many Indian cities now offer a conducive environment to scale this land-use-transportation integration model across India. Globally too, there are several examples of how compact and high density affordable neighbourhoods have been strategically promoted, typically around railway stations, and are served by an efficient public transit service. Denver, New York, Los Angeles, San Francisco and an increasing number of cities in the US are working towards establishing affordable housing development near city transit lines.
Often, new residential corridors, emerging around the construction sites of a mass rapid transit project, are competitively priced as compared to the more established residential corridors in the vicinity. They offer a good opportunity for all stakeholders, including intending home buyers, developers and investors. In the Indian context, Mumbai was the first city with nodal development centered around a suburban rail network. Furthermore, the Government of India is now working towards developing a Transit Oriented Development (TOD) policy to support the transformation process already underway in most Indian cities. This bodes well for the potential development of affordable housing zones, or concentrated ecosystems, around proposed transit nodes.
It is crucial to consider an affordable housing location with existing infrastructure and connectivity options. To sum it up, adequate and efficient connectivity is an important enabler of affordable housing proliferation. It creates efficient land utilisation; promotes economic development; generates resource efficiencies in a development and, most importantly, improves the quality of life.
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