The Housing Paradox

The Housing Paradox

The Affordable Housing Crisis Amid High Vacancies

The 2011 census, even though now a decade behind, brought an interesting housing paradox to light. The findings were such: Out of 90 million, 11.09 million housing units were listed vacant, or 12 percent of the total urban residential stock. To put it into perspective, this is sufficient to house as many as 50 million people i.e. 13% of the urban population. On the other hand, the nation is suffering a housing shortage of nearly 19 million housing units. 

Yes, we have the same questions, how and why?

The Problem

These vacancies have been seen majorly in the western parts of India, with the vacancy rates being as high as 19% in Gujarat and 16% in Maharashtra. Cities in the outskirts of metropolitan areas are prone to higher vacancy rates than central regions. 

Just looking at the figures, it can be speculated that the housing crisis could be averted to a great extent, solely by efficient management of the existing stock. It also must be mentioned that the obtained figures presumptively refer to units in the formal sector (either government-provided or privately owned) and not informal housing. 

We often look to slums as by-products of migration and population explosion, hardly considering them to be symptoms of a flawed system. If there are so many vacant houses, why are people compelled to live in slums?

Government Sponsored Schemes

Since the turn of the century, the centre has been vigorously working towards the urban housing mission. The three largest and most popular programs, Jawahar Lal Nehru National Urban Renewal Mission (2005-Extended till March 2017), Rajiv Awas Yojana (2011-2015) and Pradhan Mantri Awas Yojana (urban), all together have provided 1.1 million units. Although it might not be enough to match the required figures, coupled with the vacant housing units, the problem can be deflated to a great extent. 

Private Housing: Renting 

In India, rental housings play an integral role in the housing supply of India. Often considered a risky endeavor, it comes with its own set of hurdles. Different states have different rent control laws that are not always at par with the current market rates. Causing problems for tenants and landlords alike, there is now an air of hesitancy and suspicion surrounding the subject. 

The issue is further intensified by the slow pace at which disputes are addressed by the judicial system. With reformed laws and an efficient judicial framework, private housing can play a pivotal role in addressing the affordable housing crisis. 

Much-needed Reforms

If we are being realistic, we need to accept that there are no utopian agendas to fall behind. Reform is a social and slow-paced process that can take years to bear results. However, this does not mean that we don’t have options. 

We have listed here a few hopeful courses that can be taken to tackle the issue:

Creating incentives

There are many active developers in the affordable housing space but investments at this front remain low. Mainstream private equity investors have preferred to distance themselves from such projects since the margins are low. They undertake projects that they deem fit as commercially viable, and cannot be easily swayed to take up projects under social obligation. 

Therefore, a symbiotic environment where houses built for Low Income Groups (LIG) or the Economically Weaker Section (EWS) can be made commercially viable needs to be created. 

A show of Ingenuity 

Considering mass housing schemes in the planning and development stages of city master plans, improving infrastructure, a smoother judicial and record system, etc. can have huge benefits in the long run. 

Providing better employment opportunities can address challenges being faced by LIGs, who are vulnerable in the present climate. New policies that address their issues, such as an innovative financial model that provides micro mortgages and flexible payment options. 

Looking for Inspiration

India is not the only nation that is tackling similar hardships. There exist successful models of mass housing plan implementation in other countries with a similar demographic, e.g., China. Studying and analyzing these models can give us insights into things that we might have overlooked, and help us customize our plans in the overall development of the scheme. 

Looking Ahead

It has been estimated that India will nearly double the size of its urban population between 2018 and 2050. This rise will have many repercussions, one very significant one being the matter of finding affordable housing. Land is limited and so are natural resources. If we can’t tackle the situation at hand, we are in for an avalanche of challenges in the very near future. 


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