Averting future Ejipuras

What can we do to make sure the kind of tragedy that we are witnessing in Ejipura does not come back to haunt us again and again? Nothing short of a comprehensive review of the housing market will suffice, because there is a fundamental problem – the cost of land is so high that too many people are priced out of home-buying. Here are some things we can explore to overcome that.

1. Can the impact of ‘land value’ in housing projects be reduced?

The biggest stumbling block in cities is the scarcity of good quality land. As a result, land prices are extremely high relative to affordability levels. What are some of the ways in which land value can be reduced, or made a relatively small factor in overall property prices?

– What is the feasibility of converting non-fertile (or even non-cultivated) agricultural land into land banks for housing?
– Can encroached land be reclaimed?
– Can land pricing be made more transparent?

2. Can ‘rental housing’ play a role in ensuring pucca homes for all?

The vast majority of the populace dreams of owning a home. But affordable housing doesn’t only mean home ownership. In the absence of property ownership, could renting be a satisfactory option? Currently, there are over 11 million homes lying vacant in urban areas in India. What are the reasons for this? How can this situation be ameliorated?

3. Can housing guarantees be topped up by debt finance?

Governments at the central and state level offer various sc/hemes such as VAMBAY and Rajiv Awas Yojna for guaranteed housing. In many cases, the houses on offer are not accepted by families. What are the reasons for this? Could alternate funding models be worked out, for example, that instead of the provision of a physical house, the government can provide cash, topped up by home loans provided by banks or other financial institutions?

4. Can innovation in construction help?

The construction industry has traditionally focused at higher-end segments and has not been very concerned about construction costs. With the real estate market undergoing a downturn, developers have been forced to look at affordable housing and consequently, how to innovate in terms of construction cost reduction. What are these innovations? And how could they help in lowering the costs of construction?

5. Can mandatory social housing investment by private developers create new options?

Can government create mandatory social housing programs involving private sector developers, incentivized suitably? What could those incentives be, and what form could they take? Could slum redevelopment measures be undertaken in conjunction with the private sector?

6. How can existing unused parcels of land in the city be tapped?

Can large tracts of urban land be identified and used? Do government organizations have unused land banks that can be used for housing projects? How could these land banks be optimized for use in the creation of affordable housing? 

7. How can government intervention help?

Could the government (at the central, state and local levels) use some of the following levers to improve the housing situation?
– Permit higher FSI (Floor Space Index)
– Tax land that is lying unused and undeveloped
– Improve land-use planning
– Enable the judicial system to solve land disputes quickly
– Lower taxes for construction materials
– Subsidize new technologies used in affordable housing
– Lower taxes based on employment generated
– Lower loan rates for developers undertaking affordable housing projects
– Provide exemptions or lowering of duties (eg registration) for customers of affordable housing
– Provide single-window facilities and quicker clearances for affordable housing projects

These are the contours of the approach I’m taking to solving this problem. I’ve been talking to both the Central and State governments to see how many pieces of these can be moved, so that we begin to work on a long-term solution, which at least has a chance of averting future Ejipuras.

Comments:

  1. vedu vedanthan says:

    Why not promote and encourage prefab houses well constructed and mass produced to reduce costs and shoddy work
    Plumbing wiring also can be included in these

    Vedanthan

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