Top Challenges Faced By Affordable Housing In India & Their Solutions

With a demand of around 18.78 million homes in 2012, majorly by the economically weaker section, the government introduced the affordable housing concept in India. ‘Housing for all by 2022’, an initiative launched by Mr. Narendra Modi in 2014, Real Este Regulations Act (RERA), implemented in 2017 to regularize the real estate transactions, and Goods and Services Tax (GST), a unified taxation law put to effect in 2017, were some other steps to speed-up the affordable housing scheme. Despite all these promising schemes and laws passed by the government, there are several challenges faced by the real estate sector. Here, we are discussing the top challenges faced by affordable housing in India and some quick solution to them.

• Paucity Of Land: One of the biggest challenges faced by the affordable housing to all in India scheme is the paucity of land. While the need for housing within budget has boomed in the past few years, the requirement for land has also increased. However, finding land at a lower cost in urban cities is something that every builder/developer is tackling. There is a dire need for the government to free up land in the urban localities to offer scope for the development of affordable flats and individual house for sale in India.
• Financial Literacy: The government of India has initiated many finance schemes for the people belonging to the economically weaker section, lower income group, and middle-income group. But the roadblock that is stopping them from enjoying these benefits for the purchase of houses built under the ‘Housing for All’ mission is the lack of financial literacy. They are not aware of the facilities, interest rate subsidies, easy home loan options, and various other financial schemes available for them. Unaware of the financial aids offered by govt., many economically weaker people tend to avoid buying even a room in the affordable housing scheme.
• Unclear Policy Framework: Another challenge that affordable housing in India needs to overcome is the unclear policy framework. Many builders and developers are still confused about the definition of affordable housing in India. They believe that although this housing scheme has the power to take away all the problems of buying a house in the country, the execution of this scheme is pretty confusing. Its definition seems to change from state to state, group to group, and from the state level government to the center level government. These ambiguities around the policy framework are one of the chief challenges that the government needs to remove to promote affordable housing.  
• High Approval Costs: Another reason why many of the affordable housing projects get bagged is because of the high approval cost of the land. There is a lack of affordable land in main cities lead to these projects being pushed to the rural, countryside, or pre-urban areas. This, thus, increases the requirement for connectivity and decreases the value of the affordable housing scheme. Land in city’s center or at other prime locations needs to be released by the government at an affordable price so that builders and developers in India can carry on with the construction of affordable houses that would attract more buyers.

Key Solutions To These Challenges

• Regularizing the taxation system can be a boon for the affordable housing segment
• Educating the people of the lower income, economically weaker section, and the mid-income group about the financing aids and other terms is imperative
• Offering affordable housing to all with reduced interest rates is a step by the government and the segment targeted at affordable housing should be made aware about it
• As most affordable housing projects are in the periphery of cities, the government needs to improve the connectivity of the cities should be improved
• Prior planning and sustainable urbanization can also help in meeting the vision created by the affordable housing mission
• Instead of treating affordable housing as a profit-making scheme, it is important to help the poor and create a roof over their head
• Government taxes, charges, fees, etc., levied on the development of any project should be removed from the affordable housing segment to encourage builders and developers to invest in this segment

While affordable housing has enabled many people in India to have a home of their own, there are some challenges to this amazing scheme that are hindering its fast growth and quick implementation across the nation. By acknowledging these challenges, the government and other players in real estate India can come up with solutions to ensure that the ‘Affordable Housing’ or the ‘Housing For All’ mission is a success.