Incentivize Private Players to Achieve 'Housing for All': Property Consultant

Government needs to formulate policies and provide incentives to ensure more private sector participation if it has to bring its ambitious plan of 'Housing for All' by 2022 into reality, property consultant Jones Lang LaSalle (JLL) has said.

"The private sector can play a big role in affordable housing, most notably in terms of providing technological solutions, project financing and delivery."

"Disruptive innovations on these fronts, with a specific focus on affordable housing, are the need of the hour," JLL India chairman and country head Anuj Puri said.

The government thus needs to formulate policies for greater participation from the private sector.

He said given the complexity of the affordable housing conundrum in India, only a multi-pronged approach with equal weightage given to each element can hope to break the deadlock.

Mr Puri said urban local bodies can develop guidelines by giving free sale areas, extra floor space index (FSI) and other policy-level incentives to real estate developers, thereby attracting them to develop affordable housing.

"Schemes for redevelopment and slum rehabilitation should be developed with incentives that generate sufficient returns for the developers, while simultaneously controlling the development density," he said.

Mr Puri opined that a cost-benefit analysis of regulations should be carried out from a development perspective to ensure that schemes to facilitate affordable housing development are actually realistic and feasible.

Also, it is important to formulate guidelines that will identify the appropriate beneficiaries for affordable housing projects.

"This is critical, as the involvement of speculative investors in such projects defeats the whole purpose... The National Population Register and issuance of unique identities via the Unique Identification Authority of India will become crucial elements in identifying the right beneficiaries if they are linked with income levels," he said.

Apart from this, the government also needs to innovate on micro-mortgage financing mechanisms to ensure a larger reach, streamline land records to improve planning and utilization of land, include mass housing zones in city master plans and also deploy well-researched rental housing schemes in urban areas.

"Housing for all by 2022 is indeed a workable vision if a determined and focused effort based on these solutions is employed - and it will definitely yield the desired results," he added.

Source: PropertyatNeoDevelopers.Wordpress.Com

Smart cities, housing for all mark a new beginning for urban India in 2015

A slew of mega projects worth over Rs 4 lakh crore for developing smart cities and towns and providing housing for all in the next seven years besides proposed amendments in real estate rules marked 2015 for the urban development sector.

The government approved various amendments to the contentious Real Estate (Regulation and Development) Bill, 2015, introducing provisions for depositing 70 per cent of the project cost by builders into an escrow account and punishment for violations of the proposed law.

The amendments are aimed at protecting the interest of the buyers and promoting investments in the sector while ensuring transparency.

Another major reform introduced was allocation of central assistance to states and Union Territories based on total urban population and number of statutory urban local bodies besides number of urban poor and slum dwellers in each state.

Allotment of the bungalow of late President A P J Abdul Kalam at 10 Rajaji Marg to Tourism and Culture Minister Mahesh Sharma, however, created a controversy with the Aam Aadmi Party severely criticising the move. The party had demanded that the bungalow, where Kalam was staying after his term as President ended in 2007, be converted into a knowledge center.

Urban Development and Housing & Urban Poverty Alleviation Minister M Venkaiah Naidu defended the move saying the allocation was made as per "rules and procedures" and the government had already decided to set up a memorial in memory of Kalam in his native place of Rameswaram in Tamil Nadu.

Prime Minister Narendra Modi launched Atal Mission for Rejuvenation and Urban Transformation (AMRUT), Smart City Mission and Prime Minister's Awas Yojana (PMAY) on June 25 with a call to promote 'bottom up' planning in the country, setting off a new beginning in urban areas, which are being looked at key drivers of high rate economic growth.

While 500 cities will be developed under AMRUT scheme, there will be 100 smart cities over five years and housing- for-all scheme under PMAY aims at construction of two crore houses in urban areas in the next seven years.

"The year 2015 is very significant in the sense that we have set urban planning in the country on a new course. Consequent to the provisions under AMRUT, Smart City Mission and Housing Mission, there is a new churning resulting in a new conscience on the part of urban local bodies, which are the Achilles tendon for effective planning and execution," Naidu told PTI while summing up the new initiatives.

Introduction of competition for selection of cities under Smart Cities Mission is a first of its kind in the country for allocation of resources. Citizen consultation for planning and prioritisation of projects at city level has been made mandatory under the new urban initiatives launched this year.

Terming the initiatives as a "new beginning" in the urban sector, Naidu said, "I am happy to see urban local bodies rediscover themselves, identifying gaps and coming out with strategies for correction. Smart City Mission has caught the imagination of harassed urban people. A new beginning has been made. Now the task is to collectively succeed on the execution front to make urban areas more livable and conducive to business and economic activity."

Under the new urban missions launched, the union government will extend an assistance of about Rs 4 lakh to states and urban local bodies during the next 7 years as against central assistance of only Rs 38,000 crore released under the 10-year-long JNNURM.

After holding extensive stakeholder consultations last year to conceptualise new urban initiatives, AMRUT, Smart City Mission and PMAY (Urban) took off the ground this year.

States and UTs have nominated 98 cities for developing as smart cities after the first round of intra-state competition under 'City Challenge' and Smart City Plans for 86 have been approved by respective states and UTs.

UD Ministry gave its nod to state annual action plans for 16 states and union territories under which Service Level Improvement Plans (SLIPs) for 358 of the 500 mission cities have been approved with a total investment of Rs 14,524 crore in basic urban infrastructure relating to water supply, sewerage network services, storm water drains, urban transport and provision of green spaces and parks.

Central assistance under AMRUT is to the extent of about 50 per cent of total approved expenditure.

Under PMAY (Urban), almost all the states have signed Memorandum of Agreement with the Ministry of HUPA to implement six mandatory reforms required for successful implementation of the mission.

The Mission has sanctioned 2.54 lakh houses for economically weaker sections in 98 cities in Andhra Pradesh, Chhattisgarh, Gujarat, Rajasthan, Tamil Nadu and Telangana.

The ministry organized several rounds of inter-ministerial consultation with the participation of ministers and senior officials concerned of eight ministries to streamline approvals for construction projects in urban areas.

Fund release and implementation of Swachh Bharat Mission that was launched last year began in January. So far, construction of 19 lakh individual household toilets and over one lakh community and public toilet seats have been taken up.

Door-to-door collection of solid waste has been reported in 42 per cent of the 78,000 urban wards in the country.

UD Ministry also took up several Delhi specific initiatives. These include sanctioning Rs 3,250 crore from out of Urban Development Fund to Delhi government, DDA and North Municipal Corporation of Delhi for decongestion of roads, announcing Transit Oriented Development policy and approving Land Pooling Policy of DDA for promoting vertical construction to meet the growing demand for housing stock.

Source: PropertyatNeoDevelopers.Wordpress.Com

Housing for All scheme will fail without release of land

The Narendra Modi government's 'Housing for All' scheme will remain unrealised without massive efforts to unlock non-essential lands being held by state-run units, speeding up approvals and financial empowerment of the poor.

"This will require massive efforts to recognise and delineate the non-essential lands currently being held by large government bodies such as Indian Railways, ministry of public enterprises, port trusts and department of heavy industries," JLL India chairman Anuj Puri said in a statement here, indicating the need to build 20 million homes to achieve the scheme by 2022.

"Unlocking such lands while speeding up the approval process and creating incentives for private sector participation are all needed as part of a large, coordinated effort if we are to realise the vision of Housing for All by 2022," he said.

"To create housing for these urban poor, the only solution lies in the unlocking of land in the urban areas. The kind of housing supply that the government is targeting seems out of the question if appropriate lands are not made available," he added.

Under the scheme, the government seeks to make the houses in urban areas, mainly to service the urban poor.

"This scheme aims to provide the urban poor with the financial muscle to buy affordable houses. By providing an interest subvention/subsidy scheme, the government is allowing access to cheaper structured finance to such low-income categories," said JLL India.

Puri also pointed out that though the scheme provides homes to slum-dwellers at no cost through a public-private partnership (PPP) slum rehabilitation project, it offers no concrete solutions for the urban poor not residing in a slum and who want to own a house in a metro city.

"Though the loan amounts have been increased, his income levels may not qualify him for the loan disbursal amount that is high enough for him to buy a house in the current scenario, when housing prices are high," he said.

Source: PropertyatNeoDevelopers.Wordpress.Com

Housing for All: Interest rate subvention hike okayed for EWS beneficiaries

The Cabinet Committee on Economic Affairs on Wednesday approved a proposal to increase the interest subvention rates for affordable housing through credit-linked subsidy component of the ‘Housing For All’ by 2020 mission.

The committee, chaired by Prime Minister Narendra Modi, accepted recommendations of an inter-ministerial committee to increase the interest subsidy to 6.5 percent for loans of up to Rs 6 lakh for Economically Weaker Section (EWS) and Lower Income Group (LIG) beneficiaries under the mission. Of the total interest rate of 10.50 per cent, beneficiaries will now have to bear only the remaining 4 per cent.

“While the mission was broadly approved by the Union Cabinet on February 19 this year, the group of ministers was formed to study the feasibility of raising the interest subsidy levels from the existing 5 per cent,” said an official from the Ministry of Housing and Urban Poverty Alleviation.

The proposal placed before the Union cabinet in February had, in fact, suggested that the existing interest subsidy be lowered further to 4.98 per cent for EWS and 3.33 per cent for LIG category on net present value basis. It was, however, turned down by cabinet members who were in favour of a hike in subsidy, said officials.

The inter-ministerial committee has asked for the interest subsidy of 6.5 per cent to be kept constant even in the event of a future increase in interest rates.

The hike in interest subsidy amounts to a central assistance of Rs 2.30 lakh per beneficiary through the credit-linked subsidy scheme of the mission.

The other three components of the mission, namely slum redevelopment through private developer participation, affordable housing in partnership with private and public sector and subsidy for individual-led construction or enhancement, will get central grants in the range of Rs 1 lakh to Rs 1.5 lakh for each of the beneficiaries from the EWS and LIG category.

Source: PropertyatNeoDevelopers.Wordpress.Com

Housing for All initiative to address shortcomings of earlier housing schemes: Venkaiah Naidu

Minister of Housing and Urban Poverty Alleviation M Venkaiah Naidu said today that the housing for all initiative that will be launched soon seeks to address the shortcomings of earlier housing schemes and will be more workable.

He was addressing the concerns voiced by the members of the Parliamentary Consultative Committee of the Ministries of Urban Development and Housing & Urban Poverty Alleviation. The MP discussed various implementation issues relating to construction of 2 crore homes for the urban poor by the year 2022.

Naidu said that an investment of about Rs 3 lakh crore is required to meet the housing shortage in urban areas and the new housing for all scheme has been formulated to create an enabling environment based on the experiences of implementation of earlier housing schemes.

He informed the MPs that the urban component of the housing mission has four components - slum redevelopment, affordable housing through credit linked subsidy, affordable housing in partnership (with private or public sector agencies) and subsidy for beneficiary - led individual house construction/enhancement.

He acknowledged that the task of building 2 crore new houses in urban areas is a challenging one and informed the MPs that several measures have been taken to enable mobilization of required resources by the states and urban local bodies. These include leveraging the land for slum redevelopment, liberalizing norms for FDI flows in construction and housing sector, streamlining clearances for construction projects, substantial assistance to the beneficiaries belonging to Economically Weaker Sections and Low Income Groups, enabling urban local bodies to issue municipal bonds etc.

The minister said that affordable housing in rural and urban areas needs land acquisition and this was one of the objectives of amendments proposed by the central government to the Land Acquisition Act of 2013.

In the discussion, MPs expressed concern over steadily declining housing loans to weaker sections from public sector banks and housing finance corporations even as total lending to housing sector has increased over the years. They strongly felt that granting 'infrastructure status' to housing sector would help in meeting the credit needs. MPs also referred to the availability of land, selection of beneficiaries, granting clearances to construction projects as major challenges which need to be effectively addressed by the states and urban local bodies.

Members of the consultative committee also urged the central government to continue to support housing projects sanctioned under earlier housing schemes and are still incomplete. Naidu said that it has already been decided to support housing projects sanctioned under JNNURM till March 2017 and the incomplete projects of Rajiv Awas Yojana have been subsumed in the housing for all scheme.

Source: PropertyatNeoDevelopers.Wordpress.Com