400-sq ft flat in T. Nagar at ₹7 lakh? Study shows how

New model of in situ slum redevelopment to boost affordable housing

Photo for representational purpose only.

As many as 16.68 lakh new houses could be developed in the city for low income groups and economically weaker sections with policy changes on town planning and more support from corporate social responsibility initiatives, according to a study by the Mylapore Institute for Policy Research (MIPR).

The proposal is to develop slums in the same locality with a minimum FSI (Floor Space Index) concession of 3. A goal will be resettling slum residents in-situ at no cost to them in approximately 60% of the built-up area with the remaining 40% to be sold on a lottery basis to economically weaker sections at a discounted price.

Exemption mooted

The study on affordable housing has pointed to two models — ownership and rental. In the rental model, the land-owning agencies continue to own the land. “Over 3.04 lakh households have been identified in 1,131 slums in the city. As many as 8.34 lakh housing units could be constructed with an FSI of 1.5,” said R. Ajay, principal research associate of the project.

MIPR president Shiv Kumar said affordable housing is possible only if land is acquired at minimal cost. “The heart and soul of a thriving city are its manual and blue collar workers, the drivers, cleaners, plumbers, gardeners and security personnel. The primary need of this group is affordable housing within city limits. MIPR is proposing an innovative solution by developing government owned lands for both affordable ownership and rentals. Chennai can seize the leadership in India on truly affordable urban housing and attract national attention", said Mr. Shiv Kumar.

“The key aspects of the proposed scheme are availability of land at zero cost, higher FSI and funds coming largely from CSR and some portion from the State government,’’ said Mr. Shiv Kumar.

The study recommends that the State government exempt the projects from registration charges. It suggests a project in Kannamapet slum generating 1,000 flats of 400 sq ft each, with an FSI of 3. The existing residents are expected to take up 600 flats. The remaining 400 flats could be sold at an affordable price of ₹7 lakh.

The EMI for new buyers under PMAY will be just ₹4,200 per month on borrowings of ₹6 lakh. Construction costs are assumed to be ₹2,000 per sq ft to provide an adequate developer margin. The total project cost including registration will be ₹95.89 crore.

An additional ₹55.3 crore will need to be mobilised after the State government contributes registration charges and 400 flats are sold.

The study has proposed that CSR route be accessed for this. Anna Nagar zone in the city has the highest area of slums covering 6.67 sq km.

According to a TNSCB survey, a majority of the slum households in Chennai are living in poor, semi-pucca or kutcha housing.

The study covered the substantial amount of government lands locked up in slum tenements, and vacant temple lands held outright particularly by the HR & CE. Hindu Religious & Charitable Endowments Department, State Government of Tamil Nadu.

“Provision of truly affordable housing to these workers, both on ownership and rental basis, with equitable access for them to livelihood and basic amenities within city limits remains a challenge. Further, rental income can transform the quality of valuable heritage assets,” said V. Balasubramanian, secretary of MIPR.

A project in Kannamapet slum generates 1,000 flats of 400 sq ft each, by realising FSI of 3. The existing residents are expected to take up 600 flats. The remaining 400 flats could be sold at an affordable price of ₹7 lakh. The EMI for new buyers under PMAY will be just ₹4200 per month on borrowings of ₹6 lakh. Construction costs are assumed to be ₹2,000 per sq ft to provide an adequate developer margin. The total project cost including registration is ₹95.89 crore. The amounts that need external funding after the State government contribution for registration costs and sale of 400 flats is ₹55.3 crore . The study has proposed that CSR route is accessed to meet external funding. Anna Nagar zone in the city has the highest area of slums covering 6.67 sq km.