All You Need to Know About ‘Housing for All’ Mission
The launch of the ‘Housing for All by 2022’ scheme has come as a shot in the arm for millions of urban dwellers that dream of owning their own house in the city. It is part of the three mega urban schemes launched by Prime Minister Narendra Modi recently and is directed at the rehabilitation of slum-dwellers and promotion of affordable housing for the urban poor.
The ‘Housing for All by 2022’ scheme targets 2 crore homes to be built across all the urban locations in the next seven years. To meet this target, the Central government will provide a grant of Rs 1 lakh to Rs 2.5 lakh for every home. The vision is to provide a home to everyone living in an urban city. Women, SC/STs and people from Economically Weaker Sections (EWS) would be the main beneficiaries of this project
Mission Guidelines
The housing-for-all mission rests on four legs – slum rehabilitation with private developers using land as a resource, affordable housing for the poor with credit-linked subsidy, housing projects in partnership with public or private sector entities and subsidy for individual house construction.
Following are the specific mission guidelines:
• Ownership of houses to be in the name of woman or jointly with husband
• Houses of 30 sq mtr carpet area to be built for EWS category. In case of non-availability States can relax with the consent of beneficiaries. States also can enhance the area while meeting the additional expenditure.
• Central grant of Rs one lakh on an average per house to be provided by the Central Government can be used by States for any slum redevelopment project in the state to make them viable.
• Interest support at the rate of 6.5 per cent to be paid soon after sanction of loan to the beneficiary so as to bring down EMI.
• Under Affordable Housing in Partnership with Private and Public Sector, Central assistance of Rs 1.5 lakh to each beneficiary would be provided to promote housing stock for urban poor, provided 35 percent of dwelling units of the projects proposed are earmarked for EWS category.
• Under in-situ slum redevelopment, private developers to be chosen through open tendering and it is developers’ responsibility to provide transit accommodation during construction period.
Funding
The scheme, being launched in phases, will cover the entire urban area consisting of 4041 statutory towns with initial focus on 500 Class I cities and will largely be implemented as a Centrally Sponsored Scheme. It is estimated that while the central government may be providing funds to the tune of Rs 2-3 lakh crore rupees, the scheme may pull an investment in the range of Rs 12-13 lakh crore.
Scope and Scale of the Mission
The Urban Housing Mission will be taken up in all the 4,041 cities and towns. Initially, focus would be on 500 cities and towns with a population of one lakh and above each, as they account for about 75 percent of urban population.
Hundred such cities will be included in Phase-1 (June 2015-March 2017) and 200 cities in Phase-2 (April 2017-March 2019) and the remaining would be covered during 2019-22. The Credit Linked Subsidy Scheme would however, be implemented in all cities and towns from the current year onwards.
Under the Housing Mission in urban areas, houses of up to 30 sq mtr carpet area would be built with basic civic infrastructure like water, sewerage, roads, power and telephone lines and social infrastructure such as community centres, parks and play grounds, livelihood centres etc.
Directives given to States
• States/UTs are given flexibility in this regard to make necessary changes as deemed appropriate by them in consultation with the Central government.
• States/UTs are also given the flexibility in appraising and approving the housing projects at their level to enable faster implementation of the scheme.
• The scheme has suggested states/UTs to do away with permissions for land use conversion if agricultural land is already included in the residential zone in Master Plans.
• States/UTs have been asked to prepare/amend Master Plans earmarking land for Affordable Housing using innovative methods such as land pooling.
• States/UTs are being asked to amend existing rental laws and also for putting in place a mechanism for time-bound clearances for layout approvals and building plans by the urban local bodies.
Challenges
• The biggest challenge to create housing for the urban poor is the unlocking of land in urban areas. Unless adequate land is made available, creating 2 crore homes may be distant dream.
• According to an estimate, close to 57,392 acres would be required to build the 2 crore homes, if one were to assume a size of 500 sq ft per home and an available FSI of 4. This will require unlocking non-essential lands currently being held by large government bodies.
• For buildings to become homes, they have to be located amidst schools, hospitals, police stations, playgrounds and other amenities. To achieve this, urban local bodies need to be created and empowered.
• The role of the private sector needs to be clearly defined and some incentives must be doled out to ensure its participation.
Real Estate Impact
• Indian real estate market, which has been experiencing a sluggish growth rate since last couple of years, has be enthused by the launch of these urbanization projects as more than Rs 4 lakh crore is expected to be invested directly or indirectly into the real estate market, on a national level.
• The government’s call of housing for all by 2022, coupled with interest subvention scheme for small ticket home loans, will give a new direction to creation of housing stock in the affordable segment
• By providing an interest subvention/subsidy scheme, the government is allowing access to cheaper structured finance to such low-income categories. By increasing the income limits for the EWS and LIG categories, the government has also ensured that a larger portion of the urban poor will be covered under the scheme.
• Fewer approvals and interventions by the Central government would reduce overall costs and compress timelines, ultimately the home buyer would benefit.
