Housing For All - Need for Caution

What is the issue?

While the successful implementation of Pradhan Mantri Awas Yojana (PMAY - HFA) is welcome, the overall nature of the housing sector has to be accounted in assessing the outcomes of the scheme.

What is PMAY-HFA?

• The Housing for All/Pradhan Mantri Awas Yojana was launched in 2015 with an aim to provide affordable housing to urban poor by 2022.
• It is proposed to build around 2 crore houses for urban poor including Economically Weaker Sections and Low Income Groups, with central assistance in the range of Rs.1 lakh to Rs.2.30 lakh.
• This Mission has four components namely:

1. In-situ Slum Redevelopment with private sector participation using land as resource.
2. Affordable Housing through Credit Linked Subsidy.
3. Affordable Housing in Partnership with private and public sector.
4. Beneficiary led house construction/enhancement.

• Appreciably, affordable housing has recorded a considerable growth in recent months.
• This comes as a result of mission-mode implementation, new found infrastructure status and better inflow of formal credit to the segment.
• The uptake among slum dwellers for affordable housing is closely related to the balance of benefits and costs.

Why is the need for caution?

• ‘Housing for All’ is getting to be a unilateral, supply-side push.
• Given this, it has to be ensured that this social policy is not a response to a mere artificial demand.
• This also happens at a time when Indian real estate is witnessing supply excess, marked by a great deal of unsold inventories.
• Examples of empty low-cost housing units have also begun to emerge.
• This is notably the outcome of false hopes of adequate demand for housing.
• There is also the challenge of land scarcity for developing new housing units.

What should be done?

• This reality with the Indian real estate should be accounted for the large-scale state-subsidised model for housing projects.
• It calls for making well-informed and contextualised policies.
• In situ development - Notably, as of latest data, only 2.2% of the total approved housing under PMAY-HFA was for in situ development.
• Government can consider increasing this proportion and go for a sustained focus on in situ upgradation.
• This would alleviate much of the social capital concerns, entail lower costs and address the concern of scarcity of new land.
• Rental housing - Rental housing is being proposed as a smart, complementary solution to the housing shortage.
• The National Urban Rental Housing Policy, 2017 is currently awaiting the Cabinet’s approval.
• An important aspect of rental housing is that it would absorb floating population/seasonal migrants, who might not want to invest in an immovable property.
• With utilisation of large number of existing vacant houses which do not enter the rental market, rental housing can certainly drive down the land requirement.
• Legislation -As a concept, social rental housing needs greater impetus, beyond the commercial purposes rental housing in metropolises.
• Proper legislation on renting houses and a monitoring procedure are essential for the potential use of vacant houses.
• Housing policies should thus go beyond hard core infrastructure alone, and address other associated issues for a better insight on the outcomes.

Source: BusinessLine