By Sachin Agarwal, CMD – Maple Shelters
When we talk of affordable housing in India, we are not talking merely about cheap homes. If that were the only parameter to define, affordable housing, then houses in villages or in utterly remote outskirts with no back links to the main cities would qualify as ‘affordable’. Needless to say, homes in such locations tend to be affordable more or less by default, because of the low land prices and the leisurely nature of demand there.
In the Indian context, affordable housing as a market concept must refer to homes for people working in urbanized areas. Thanks to our cities’ economic activity spreading steadily outward, this does not necessarily mean that projects offering such homes must coexist with pricey developments in the central areas. To put a finer point to it – affordable homes are needed wherever people find jobs that pay well enough for them to run their families, but not well enough to pay for the financial indulgences that the middle and upper-middle class can afford.
In what price bracket should such homes fall? The rates for genuinely affordable homes in India should range between Rs. 10 lakh and Rs. 20 lakh. It is true that every city has its own benchmarks of affordability, but it is also true that there are fairly large families in every city whose combined income does not exceed Rs. 15,000-20,000 per month. Regardless of how well the Indian economy performs or how well the job market does, there will always be such families in the country.
Who are these people? They are the ones no city can do without – they are the factory fitters and turners, the construction workers, the hypermarket assistants who bag groceries, household maids and drivers, roadside vegetable and newspaper vendors, ‘alteration’ tailors and rickshaw drivers, to name just a few. Their skills and services are very important to the city, but their scope for income growth is inherently limited. They work hard for a livelihood and to educate their children so that they have the possibility of a better life, but they themselves rarely – if ever – manage to improve their own financial status quo.
The majority of these people, collectively known as the LIG (lower income group) segment, live on rent in ramshackle chawls and slums. They are the mercy of ruthless landlords, highly erratic water and electricity supply, public sanitary facilities and a very high risk of disease. For them, owning a secure home with decent facilities in a modern project is more than just a dream – it is a necessity. Such a home is also usually their sole source of financial security, and the only tangible asset that they will be able to pass on to their children.
As a rule, what the Indian property market has to offer to this segment of people in most of our cities falls in the category of concrete ‘pigeon coops’ with thin walls built from substandard materials, no balconies, no common facilities or amenities, almost no security, and no play areas for children or open spaces of any kind. Developers of such projects cut their costs in every possible manner and in turn over-price the flats within them, secure in the knowledge that they will still sell because of the severe dearth of affordable housing.