Transcript Affordable Housing for All 2007 Key Recommendations by High

Key Recommendations of
the High Level Task Force on
Affordable Housing for All
Presentation to the Ministry of Housing and Urban Poverty Alleviation
December 29, 2008
Need for Affordable Housing
• Almost every available indicator suggests that the
provision of affordable housing is one of the most
formidable challenges facing India
• Delay in addressing the affordable housing problem
would seriously affect India’s economic growth and
poverty reduction strategies
• Multiplier effects of housing
• Need to build a property owning democracy
• Alleviating the urban housing shortage could raise GDP
growth by 1-1.5%
• Need to put affordable housing at the centre of public
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policy
Suggested Parameters for
Affordable Housing
Size
Cost
EMI/Rent
EWS/ LIG
MIG
300-600 sq ft carpet
area
Not exceeding 4 times
household gross
annual income
Not exceeding 30% of
gross monthly income
Not exceeding 1,200 sq
ft carpet area
Not exceeding 5 times
household gross
annual income
Not exceeding 40% of
gross monthly income
The Task Force visualises the size of household as five members
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Affordable Housing:
The Concept and Issues
• Difficult to adopt a ‘one-size-fits-all’ concept
• Government should undertake a separate exercise to
estimate the number of households falling under the
‘affordable housing’ category
• Need for regular data on housing starts and
completions
– Data to be collected through an institutional structure
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Land for Affordable Housing
• Bring in additional lands into urban usage on a
regular basis by
– Simplifying processes for land acquisition and
conversion of agricultural lands for urban use
– Reviewing processes of master planning for
making a proper assessment of land requirements
and allocation of such lands for different uses
– Treat affordable housing as a ‘public purpose’
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Land for Affordable Housing
• Upward revision of FAR/FSI
– Need for upward revision of FAR/FSI which is
commensurate with investment in infrastructure
– Infrastructure upgrading to precede FAR/FSI
increase
– Develop critical space plans
– Impose an impact fee on those benefiting from
additional FAR/FSI
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Land for Affordable Housing
• In-situ Development
• In-situ development on public lands is one of the most
effective instruments for addressing affordable housing
issues
• Formal recognition of ‘security of tenure’ by the
Government is essential to solving the housing problem
• Several forms of providing security
– Ensure that there is no threat of eviction
– Tenurial security to facilitate access to market funds
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Land for Affordable Housing
Land Policy
• Land related issues i.e. bringing in additional lands,
higher FSI and in-situ development need to be
implemented in an integrated manner
• Improve the speed of transactions through cadastrals,
computerised land records and application of egovernance to land transactions
• Government should commission a professional study to
examine issues covering urban land and recommend a
long-term urban land policy
• Need to foster an environment that will make rental
housing for EWS/LIG categories a worthwhile
investment
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Fiscal and Financial Framework
Recommendations
• Increase JNNURM funds for affordable housing by
100%
– Part of these funds to be used for direct provisioning
of housing for urban poor households
– Part of the funds to be used as supplements for in-situ
development to be routed through NGOs and CBOs.
• A housing cess of 0.5% on all central government taxes
be credited to a dedicated Shelter Fund to be managed
by NHB, along with budgetary support of an equal
amount
• Allow HFIs to access long-term External Commercial
Borrowings (ECB) market
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Fiscal and Financial Framework
Role of State Housing Boards (SHBs)
• The role of SHBs needs to be revamped
– SHBs must be encouraged to focus on playing a
more active role in the provision of affordable
housing, even if it is through PPPs
• Funds raised through sale of land transactions by
SHBs must be ring fenced, with a defined proportion
to be deployed only for affordable housing
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Fiscal and Financial Framework
Tax Related Incentives
• Reinstate Section 80 (IB) of the Income Tax Act for
developers engaged in affordable housing
• Extend the scope of Section 36(1)(vii) of the Income
Tax Act to include HFIs
• Further reduction in stamp duty rates and registration
fee for affordable housing to 2% ad valorem uniformly
in all states
• Levy a flat charge of Rs 1,000 on registration of
equitable mortgages
• Bring ‘affordable housing’ under the infrastructure
definition
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Fiscal and Financial Framework
Financial Institutional Recommendations
• Establish a housing finance company focusing only
on housing micro-finance
• Promote household savings: allow financial
institutions lending to the poor employed in the
informal sector to accept deposits:
– Savings can enable a down payment for a loan
– Will enable the financial institution to assess the savings
pattern of the customer
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Institutional Framework
• Need for a coherent institutional framework to promote
affordable housing
• Need for real estate regulators
– To serve as a single window for overseeing the affordable
housing agenda
– Regulate activities
– Promote policy reforms (e.g. stamp duty reduction)
– Protect consumers from real estate frauds
– Co-ordinate digitisation of land records
• Legislative process may be time consuming, hence in
the interim, Ombudsman type bodies need to be set up
at the state level to monitor JNNURM projects
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Closing Remarks
• Housing has huge multiplier effects and can
provide the much-needed triggers to the Indian
economy
• Set up an inter-Ministerial group to focus on
‘Housing and the Economy’
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