Affordable Homes Affected By Infrastructure Problems
Mumbai outskirts are the best place for someone who wants to buy an affordable house. However, the affordable homes market on the outskirts of Mumbai is beset by problems such as poor infrastructure, lack of proper access and connectivity, delayed clearances and issues of land titles.
Most of the affordable houses on Mumbai’s fringes are about 60-100 km away from Mumbai. These are areas such as Virar, Panvel, Shahpur, Karjat, Boisar, Ambivali and Kalyan. The cost of these houses range between Rs. 10-35 lakhs. Most of these areas were developed during the 2008 boom to attract lower and middle class buyers. The areas registered good sales as well despite the distance from Mumbai.
Infrastructure and connectivity problems
After frenzied sales in these areas, people started realizing that most of these areas have poor social infrastructure and connectivity. For example, the nearest railway station in a couple of areas is about 8-10 km away. There are hardly any amenities such as schools, hospitals, markets or restaurants. There are no proper roads and street lighting. Many of these areas lack the livability factor and it will take at least a decade to come up with the required human mass to improve infrastructure.
Apart from the lack of social infrastructure, builders also face delays in obtaining environmental clearance for many of their projects. Tata Housing faced a similar situation in Vasind near Shahpur and had to scrap one of its projects because the necessary clearances got stuck in red tape. Another large low-cost project from another builder in Karjat saw the completion of only phase I. The remaining phases did not take off despite good initial demand.
Poor infrastructure affects project viability
Demand for affordable housing is high in Mumbai despite industry slowdown. Due the high capital values in Mumbai, affordable houses need to be built outside Mumbai. The capital value in these areas is typically in the range of Rs. 2,500-5,000 per sq.ft. Most flats in these areas are built by grade B and C developers. Without proper infrastructure, costs of construction go up and projects become unviable for many of these builders.
Many developers blame the government for neither promoting nor supporting affordable housing. They claim that permissions do not come in time and affect the projects.
