Low-cost homes: too far and no time limit for possession
Following in the footsteps of Tata Group and Unitech, the Future Group has also entered in to affordable or low-cost housing projects. Future Group's unit FH Residencies has formed a joint venture with Kolkata-based developer Sumit Dabriwal, for building affordable, branded, ready-to-move-in homes.

Kishore Biyani, founder and chief executive, Future Group said it intends to be a Rs130 billion company by 2011 and the foray into building ready-to-move-in houses is part of the plan. The company has yet to work out the pricing strategies, but it would be affordable.

This is a national tie-up with Sumit Dabriwal and the target buyers would be young, working class, who are pressed for time, so we would take care of everything needed for a home, Biyani said. One more cash rich group entering into low-cost housing project is good news, but there are some concerns about the theme itself. In his recent letter to shareholders, Deepak Parekh, chairman, Housing Development Finance Corp (HDFC), said: "Affordable housing is not about box-sized, budget homes in far-flung places where there is no connectivity to work places and little surrounding infrastructure. Affordable housing has to be able to cut across all income segments and has to make economic sense in terms of proximity to the work place. The agenda for affordable housing requires combined public-private collaboration and a strong political will to enforce change."

Developers have recognised that the real demand no longer lies in the premium segment and are therefore opting to build smaller, no-frill apartments. 'Affordable housing' is suddenly in vogue. But this is a bit of a misnomer. Some correction in prices has happened, developer margins have come off, but real estate prices are still high, he added.

An industry associate has suggested the government and realty players should jointly undertake low cost housing projects in rural areas where shortage of houses is estimated to be more than 47.43 million up to 2012.

Developers are now reintroducing one-bedroom apartments, which seemed to have disappeared from the market. Further, with interest rate reduction, many who were earlier out-priced are now able to come back into the housing market. While these developments are positive, the real agenda for affordable housing has still not been brought to the table, Parekh said.

Talking about the shortage in affordable urban land, Parekh said the inability to adjust land policy with the changes in demand and supply conditions has led to serious shortages of urban land at affordable prices, encroachments on public and private lands, irrational land use and absence of spatial plans in cities.

The total urban land stock in India is only 2.3% of the country's total geographical area, but houses 30% of the country's population.

Parekh said there is a need to bring in additional urban land on a regular basis through a policy change and the floor space index (FSI) should be increased at the same time urban infrastructure should also be upgraded.

Talking about the role of housing boards in the development of houses, the HDFC chairman said although some state housing boards are performing their duties, in recent period many of them have shifted their focus to merely selling land for profit and sitting on cash surpluses. Such profits should be mandatorily ring fenced and deployed only for affordable housing, he added.

Separating challenges of urban housing from rural housing, Parekh said the government need to go for key reforms like permitting the mortgage of agricultural land for residential purposes and introducing title insurance which could give the much-needed thrust to rural housing.

There is such a compelling need for state level real estate regulators whose role would be to oversee and monitor the affordable housing agenda, promote real estate reforms, ensure transparency especially by mandating that flats be sold only based on carpet area and most importantly, act as a platform to protect buyers from real estate fraud, the HDFC chairman said. -Yogesh Sapkale [email protected]

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    Surreal Estate

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    The real estate industry is in a bad shape. Builders are making less money, selling fewer flats and are whining louder. They are making noise in public to obtain more handouts from the government. Given the nexus between politicians and builders, it will not be surprising if the Budget has something for them. The past few...

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  • Nilekani to resigns from Infosys following PM’s offer to head UIA
    Infosys Technologies Ltd’s Nandan Nilekani has resigned from the company’s board and also relinquished his position as co-chairman following his appointment as chairperson of Unique Identification Authority of India by Prime Minister’s office, the company said in a release.
    Prime Minister Manmohan Singh had invited Nilekani, co-chairman of the country’s second largest software company, to chair an authority that will create a unique identification database of the country's citizens, reports PTI.

    As chairperson of the Unique Identification Authority of India (UIA), Nilekani would enjoy the rank of cabinet minister, the Prime Minister's office said in a notification.

    The functioning of the authority and activities to be performed by the UIA would serve multiple objectives. The authority shall have the responsibility to lay down plans and policies to implement the unique identification scheme in the country. It shall own and operate the unique identification number database and be responsible for its updation and maintenance on an ongoing basis.

    Nilekani’s name had earlier been discussed as a member of the planning commission with the rank of a minister of state. But it was later felt that the UIA project requires a professional of the stature and calibre of Nilekani. As the chairperson of the UIA need to deal with other ministries like home, labour, rural development and information technology, it was felt to assign cabinet minister’s to the post.

    The first UPA government had on 28th January notified the UIA under the planning commission and provided Rs1 billion in the interim budget to start the project.

    Nilekani is co-founder of Infosys and has served as a director on the company’s board since its inception in 1981. Between March 2002 and June 2007, he served as the company’s chief executive and managing director. Thereafter, he was re-designated as the co-chairman of the company. – Yogesh Sapkale [email protected]

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