Urban housing shortage declines 25% in five years to 18.7 mn in 2012

Last Updated: Sun, Sep 23, 2012 08:40 hrs

The urban housing shortage in the country declined 25 per cent from 24.7 million in 2007 to 18.7 million in 2012, suggests a report by the Ministry of Housing and Urban Poverty Alleviation. The ministry attributed this decline to a confluence of factors like increase in banking finance, along with efforts of central and state government programmes, and the general increase in per capita income.

About 56.2 per cent of housing shortage was in the economically weaker section (EWS) category at 10.5 million, followed by 39.5 per cent in the low-income group at 7.4 million and just 4.3 per cent in the mid-income group. Despite the statistics pointing to massive demand, developers do not find low-cost housing attractive enough due to high land cost and low floor space index (FSI), leading to low margins.

"We are coming up with an affordable housing policy next month to address this," said Arun Mishra, secretary at the housing ministry. The policy will include increasing FSI, TDR (transfer of development rights) easing of density norms, which is one of the major demands of the realty sector. Also, compulsory parking lot norms will be relaxed.

About 60 per cent of the shortage was in seven states--Maharashtra, West Bengal, Bihar, Andhra Pradesh, Uttar Pradesh, Tamil Nadu and Rajasthan.

On the one hand, there was a shortfall of 18.7 million houses and on the other, 11 million houses were lying vacant. Ironically, in Maharashtra, which had the maximum housing shortage of 1.94 million, there were 2.2 million houses vacant. "But the housing shortage is mainly in the EWS category, while the vacant houses are mid-end or high end," said Kumari Selja, minister of housing and urban poverty alleviation.

A massive 14.9 million housing shortage was due to congested houses-defined as house where a married couple and at least one adult share a room, while 2.27 million housing shortfall was due to obsolete houses-structures of over 80 years and bad structures of 40-80 years.

A technical group committee, headed by Amitabh Kundu, a professor at Jawaharlal Nehru University, New Delhi, used a different methodology to calculate the housing shortage compared to the one used in 2007. The committee noted that using the present methodology as well, housing shortage in 2007 was about 23 million.

Kundu suggested taxing vacant houses to bring them into the housing market. The technical committee also suggested households that have the problem of congestion must be enabled to create extra space or build extra rooms through support from public agencies.

Other suggestions ranged from shifting the households living in houses built before 80 years to new units by making changes in the Rent Control Act. Currently, the biggest shortage of housing is found in the cities where the landlords are not renting out their homes.

The report asked giving "industry" status to the housing sector, which will open up avenues for small developers to get loans from the banking sector and tax rebates from the government and will help in contributing to the overall gross domestic product (GDP). The housing and real estate sector contributes about five per cent to the overall GDP.

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