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A mammoth task

In a market dominated by the private sector, access to housing depends a lot on the household income. More income translates to better housing opportunities. The last few years have seen a steep rise in housing prices, with the market remaining focussed on high income groups and leaving the poor under-served. Housing deficit continues to rise despite the fact that affordable housing has been a declared goal for the past several decades. In 2007, housing shortage for the lower income groups was estimated to be about 24.5 million units. One of the problems is that not only the term ‘affordability’ has remained loosely defined but the policies have not been oriented to achieve specific targets. In this context, the recently submitted report by the task force on ‘Affordable Housing for All’ has taken a commendable step by defining affordability in terms of unit size and household income. This will be useful only if it is followed by the publication of location-wise median income figures. The best practices in vogue elsewhere demonstrate that threshold income figures are necessary to set the affordable housing prices or rentals and regulate the market for achieving the targets.

The National Sample Survey (58th round) has shown that an urban household owns, on an average, only 398 square feet of living space. Against this, the recommendation of the task force to include units as large as 1,200 sqft as affordable housing for middle income groups is an aberration. Serving those who are not served by the market and providing “below-market housing” should remain the core of the affordable housing policy. The report emphasises the public-private partnership model and identifies real estate developers as the key participants in delivering affordable housing. In the process, it overlooks the alternatives practised in other countries which substantially increase access to both home ownership and rental housing. The European experience has shown that the state working with not-for-profit organisations can also enhance the supply of affordable housing. Further, successful devices such as mutual housing, a cooperative that discourages speculative housing and allows long-term affordability should also be explored. The other measures recommended by the task force such as creation of a shelter fund by levying a cess of 0.5 per cent on all Central government taxes may help the cause, but what would be needed are giant steps to deliver affordable housing.

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