Wednesday, January 14, 2009

A roof above our heads

For the larger part of 2008, middle class people in Delhi looked forward to the housing scheme of the Delhi Development Authority who offered 5,238 flats n various sizes and prices by lottery among 5.67 lakh applicants. What made the flats attractive was the fact that they were priced 50 percent lesser than the market rates. In 2006, the DDA had put up 3,000 flats for sale for which it received over two lakh applications.

And of course hundreds of thousands of Mumbaikars lined up on Monday for a chance to own a flat in prime areas, as the Maharashtra Housing and Development Authority (MHADA) opened the process of allotting low cost flats. 3,863 low-cost flats are being allotted in prime areas like Versova, Ghatkopar, Chembur and Goregaon. There are different housing schemes for different income groups and again the flats are being offered at nearly half the market price, ranging from Rs 1 lakh to Rs 50 lakh. And of course the political potential of a roof above your house has been well exploited by the Shiv Sena who has demanded an 80 percent reservation for Maharashtrians in the allotment.

Housing is a hot potato…. riven with shortages, land mafias and crime; all playing on the shortages for housing units; particularly low cost housing units. According to a 2007 report of the National Sample Survey Organisation, one out of every seven urban households in India today lives in slums. About eight million households live in slums now — two million more than those lived there a decade ago. Further, according to data provided by National Buildings Organisation, combined housing shortage in the country has increased by 134% during the last six years from 10.56 million units in 2001 to 24.71 million units in 2007. The number of urban households during this period has increased by 11.5 million. Many of them found their ways to slums for shelter.

Of course you wouldn’t guess that there is a housing shortage by looking at the housing portals and the Sunday classifieds in any of the leading newspapers. A recent television commercial recently even offered a free Mercedes car thrown in with a high end villa. The economic melt down has frozen or brought down property prices to an extent, but of course, recession or no, the advertised houses will forever be out of reach for those lining up to collect the forms for the DDA or the MHADA flats.

One of the reforms that are urgently needed in the housing sector is the need for a regulator. The sector doesn’t have one despite its size and importance and the fact that the government recently saw it fit to nudge housing loan interest rates downwards in a bid to increase demand. The lack of a regulator means that builders can be any body with cash – and possibly muscle power to invest and acquire land. There is no universal service obligation to ensure that a certain portion of houses and private builders build are for the lower income sections of society. This is much needed much like airlines are required to fly to financially unlucrative locations because they are in the strategic national interest. or the telecom companies which pay a universal service obligation service fee to the state so that remote parts of the country can receive connectivity.

the housing sector so far has received none of these attentions and has become the domain of big private builders who build only for the rich. as long as this climate stays the way it is, with only a few state players building a miniscule number of flats and then selling them by lottery, the misery of those get passed over in the drawof lots will know no end.

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