The provision of affordable housing in India: Are commercial developers interested?. (July 2016) - Ram, Padmini
Abstract: In many developing countries, insufficient provision of affordable housing for a fast growing urban population is leading to informal squatter settlements and slums. One way of improving housing for poor households is that commercial developers build simple and decent housing for sale at prices which many of those households could afford. This is called a 'market strategy' and the government of India (GoI) and the state government of Chhattisgarh (GoCG) have been trying to enable such a market for almost two decades now. However such a market has not yet arisen in Raipur, India. The indications are that many of the urban poor there could afford to buy their own dwelling if it was below a certain price. The question is: what is preventing commercial developers from building those dwellings? This is investigated by interviewing nearly half of the developers working in Raipur (30 firms). It was discovered that if certain constraints were to be lifted, developers would build such housing, commercially. The constraints related to credit, land availability, lengthy bureaucratic approvals for construction, among many other factors. According to the developers, the government could lift or ease those constraints which would enable the market to ease the massive housing shortage. This way of analysing constraints on the supply of affordable housing could be applied to other situations where there is a pressing need for such housing. Highlights: Most governments are usually lacking the resources to finance affordable housing for all who need them Within a supportive legal and regulatory framework, can affordable housing potentially be a large and profitable market?. Institutional constraints limit the market in varying degrees; some are more binding than others. Institutional constraints interact with each other at various levels and cannot be addressed in isolation.