Boost availability of land to provide habitation to the young mobile population of the country: MoHUA secretary

Katikithala said there is a need to ponder on how habitation can be made available to people, youth, especially on a real-time basis, on a need basis.

“Most of our population is mobile today, jobs are mobile. How can housing be made available to our people, youth specially on a real-time basis. For that, we have to move away from the concept of housing to habitation,” he said at a conference on ‘Indian Housing Landscape: Affordable to Accessible’ organised by CII in partnership with MoHUA in the Capital.

He said one needs to move beyond the perspective of asset and ownership to explore other innovative models such as ‘rental’ or ‘sharing’ to facilitate ‘accessibility’ alongside enabling mobility in the country.

“The ability to move from one urban place to another to participate in an economic opportunity is a function of that mobility. If we are not getting mobility, we are also not getting access to opportunities,” said Katikithala.

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“Today land is a factor of construction, a factor of cost, a factor of asset. How can we take land out of the play? How do you make land available at some point of cost in a way that the cost of the product comes down sharply. We are beginning to bring this thinking within the ministry” he added.

Katikithala said the government is investing huge amounts of money in improving transportation infrastructure, especially in urban centres.

‘Purchase houses in the same manner we buy refrigerators’

Kuldip Narayan, joint secretary, MoHUA, said that he hoped that the concept of energy efficient homes will turn into reality in near future. “We should be able to purchase houses the way we purchase refrigerators, which indicate energy efficiency during and post construction at any given point of time.”

He also informed the audience that the Department of Financial Services was working on a product to cater to the informal sector. “This will help provide loans to buyers who do not have salary slips or income tax returns,” he said.

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Chittaranjan Dash, principal commissioner, Housing, DDA, highlighted the challenges faced by people at the bottom of the pyramid in accessing affordable housing. “Unfortunately even after interest subsidy, they do not have the financial capacity (to buy a home).”

Pointing out that land costs are too high and construction costs are going up rapidly, Vipul Roongta, MD and CEO, HDFC Capital Advisors, said that the definition of affordable real estate should take into account inflation over the years.

Neel Raheja, chairman, CII National Committee on Real Estate and Group President, K Raheja Corp said that “we also have to ensure cities are sustainable. The real estate sector has been seeking policy changes from the government and RBI to make lower cost finance available.”

Pankaj Bajaj, managing director and CEO, Eldeco Group pointed out that the biggest challenge that real estate developers face today is that of finance for purchase of land. “A RBI circular prohibits banks from lending to developers for purchase of land and even for refinancing purposes…we are faced with a situation where there are more than 10,000 developers with execution capability but they do not have the land or the financing mechanism to buy land.”

This forces developers to go in for informal sources of funding that cost upwards of 18% to 24%. “If the government is able to impress on the RBI to reconsider availability of funding to developers for purchase of land, it will go a long way in resolving the supply side problem of affordable housing,” he said.