For a low-income person in a city like Gurgaon, owning a legal home is a distant dream. During my field trips, I have spoken to scores of families that belong to Gurgaon and its surrounding areas that have invested in unauthorized colonies (usually plotted from agricultural land) bought on power of attorney basis from landowners. This, they say, is their only option to own a home in the city.
The new Haryana Affordable Housing Policy 2013, the details of which are now out, seeks to address this issue by setting new rules to bring on private developers into the low-income housing game. In a city where land prices are through the roof and housing is unaffordable for middle-income people as well, it remains to be seen how transparently and efficiently such a policy can be implemented so that the intended ‘beneficiaries’ get to buy and occupy these homes.
How the policy is to work
Essentially, the government plans to grant special licenses to developers to build these projects. The carrot on offer, of course, is increased density and FAR norms. Under the proposal, the projects licenses would get to build out to a density of 900 people per acre as opposed to the current maximum of 300 people per acre. The units are to be 28-60 sq m in size, however 50% of the units must be less than 48 sq m.
The developer has to qualify in a point-based system that takes into account the condition of existing infrastructure (roads, water, sewerage, developmental works) and the developer’s presence in the specific sector where the project is proposed; thus encouraging projects in areas where infrastructure is better developed to come up first as well as preventing developer monopoly over certain areas. Only one project will be approved per sector as per Master Plan. Once the license is awarded, the project is to be developed with 4 years and cannot be converted into a normal project.
Projects on plots upto a maximum of 300 acres are permitted in the State’s larger cities like Gurgaon and Faridabad, while maximum plot sizes go down to 150 and 75 acres for smaller cities. The allotment process is to be stringent and in the hands of a panel and will be done at the rate of Rs 4000 per square foot in Gurgaon, Faridabad, Panchkula and Pinjore-Kalka, and Rs 3600 per sq ft in other development plans.
Out of the subsidy mindset, finally!
In a rare and progressive gesture, the policy refrains from labeling any units as ‘EWS’ and categorically does this to prevent any cross-subsidy from applying to these projects. While there is a concern that the Rs 15-30 lakh price that these units are expected to be sold at will not really be affordable to the ‘urban poor’ in Gurgaon, keeping these out of the ambit of subsidy certainly prevents gross misuse of the policy. By this I mean that there will be no perverse incentive for middle and higher income people to buy the subsidized units, nor for poor people who get them to sell for profit and exit the investment. The units will go to a section of people who are still under-served, even though they technically will not come under the EWS and LIG categories who can afford homes priced between Rs 5-10 lakhs typically.
Some things slightly off….need to be thought through further…
Cars are a reality, transport planning on urban scale needed urgently: Parking, a typical problem area, rears its head here too. Half car parking space per unit is to be offered as stilted/covered parking but not to be allotted to flat owners, who will get two-wheeler parking instead. Visitor parking is to be uncovered parking. We are talking about middle income people here and I would wager every unit will own at least one small car, so this is a highly impractical situation and we are staring at a parking disaster in these projects. It would be more practical to incentivize such projects along transit corridors and plan an efficient transportation system that links these areas with employment centres. So that people who are hard pressed to buy a home are not forced to buy cars in the first place! From an aspiration perspective, a four-wheeler is a craze. We regularly see families that have no savings to speak of buying second hand cars, partly because a car is a status symbol, and mostly because there is little public transit to speak of. There is a desperate need to align this policy with other larger, more ambitious transit initiatives, both public and private.
What’s in it for the developer besides FAR/FSI? Developers are to provide bank guarantee as well, in addition to putting their lad on the table AND putting in the money to develop the project. Seems a hard ask to me!
Migrants allowed? Eligibility criteria not so clear: The eligibility criteria prevent the allottee or any family member from owning another govt allotted unit in urban areas in Haryana and limits the number of applications to one only. However, this is only applicable to ‘licensed’ colonies, so those currently living in illegal colonies are eligible. Plus, the newspaper reports that this scheme is for residents of the State. The draft policy makes no such specification. Does this mean that no domicile will be asked for? Private property does not restrict higher income migrants from buying; will these units also be available to migrants from other States with no identity papers from Haryana? I find that hard to believe in the light of the general drift of State housing policies, but if this is so it would mean a huge step forward as well.
The other issue is the one-year limit on reselling the flat. How will that be monitored?
No clarity on O&M: The developer is to maintain the project free of cost for five years, after which a resident association takes over. While this policy is an improvement over the existing one, this is a tough issue with affordable housing and needs definition certainly for a sustainable solution.
Imperative to learn from failures elsewhere: This policy has been a long time coming and it takes a few very bold steps forward; however, I wonder if the failed or partially successful experiences of other States have adequately been considered while drafting this (O&M experience of SRA scheme in Maharashtra, a case in point).
NCR cities might be special? The situation in Gurgaon and Faridabad is drastically different from other cities in Haryana. It seems to me that a differential approach could have been taken for these two cities to position them better within the NCT of Delhi.
Dovetail with other schemes critical for a sustainable and viable solution
It is clear to any practitioner in the housing space that this policy will serve middle income customers and not EWS/LIG and that is fine! However, other solutions like employer-built housing, rental housing dormitories and family units, public housing projects as built by Housing Boards as well as regularization of illegal colonies are critical to addressing the issue of affordable housing in the larger context. Otherwise, the truly under-served section of the urban poor will continue to be denied quality housing or a right to improve their socio-economic conditions; surely, that is fundamental to planning the cities of the future?
The longer I work in the low-income housing sector, the more appalled I am by government apathy towards providing shelter, one of the most basic human rights upheld by the Constitution of India as well as in the Universal Declaration of Human Rights, to which India is not merely a signatory but a nation that has played an active role in drafting the declaration!
Over the years, governments have distanced themselves from the role of provider of housing, citing the need for private investment. The bald truth is that private developers have no reason to build homes for lower income groups as long as the middle and high income markets continue to offer good returns. Government intervention is therefore essential. Various models to deliver affordable homes are being adopted by States across India. However, much distance lies between promises made and achievements on ground.
Take Haryana for instance. In 2009, the Haryana government declared it would build 100,000 low cost homes across the state- 40,000 in Gurgaon, and 30,000 each in Faridabad and Panchkula. These are urban centers in the state that border the cities of Delhi and in the last case, Chandigarh.
In Gurgaon, the State government intended to build homes on 200 acres of land and these homes were to be prices between Rs 4 and 16 lakhs. Unit sizes were to be 270 and 520 square feet. Clearly, these homes were targeting LIG households in the city.
In a departure from the way governments have traditionally acted in building homes themselves (DDA in Delhi, for example), the Haryana government decided to distribute licenses to private builders to construct these affordable homes. A planning department official has told the media that about five such licenses have been granted, but refused to divulge the locations of these projects or any other details. The land for these projects, however, has not been acquired. The state town planning department’s website apparently shows that only 21 acres out of the total 200 (11.26 acre at Sector 67 and 10.06 acre at Sector 93) are actually available for this scheme. Meanwhile, developers have rapidly acquired land in the sectors demarcated in the Gurgaon Manesar Master Plan 2031 and it seems that the government is playing into the hands of the builder lobby rather than protecting the interests of the citizens.
Citizens groups and the media has alleged that HUDA has not acquired any land to build government housing or sell plots that would be affordable to the middle class either, leave alone provide shelter options to the poor. The last time plots were auctioned at affordable rates was in 2008 in Sector 57.
My fellowship research is attempting to study the possibilities of evolving an inclusive approach to housing in this city. My initial sense is that there has been a definite (and deliberate?) failure of the government to do its duty. Now, with land prices extremely high on the back of anticipated rapid development of the demarcated sectors in the city, there is little hope of the poor being accommodated easily. How is this city going to survive if it continues to deny shelter and even the most basic living conditions to its supply of labor, that essential workforce that is an important pillar that supports the city’s economy? My research attempts to prove that the poor have a stake in this city’s story, that they do have the resources to survive and they will, if only they were given a chance and recognized as stakeholders rather than as nuisances to be swept under the carpet!
Urban professionals are likely to view Minister Kamal Nath’s obsession with higher FAR with a liberal dose of skepticism. Turning Delhi into a Shanghai or a Manhattan is exactly the kind of glitzy dream private sector developers have been selling to the government for many years. Which makes me suspicious indeed about how exactly this all will happen, who it will benefit and who will lose out.
We do know that Indian cities have a really low Floor Area Ratio (FAR, or Floor Space Index, FSI). We also know increased FAR would create a lot more space. Space that is much needed. But will we be smart about the kind of space we want to create? Let me explain. There is this peculiar herd mentality among developers in India and developers tend to have a short-sighted approach. NCR towns have many ghost malls and ghost commercial buildings that were built to sell space to speculative investors. That may not happen in the city centre, but in order to make the optimum use of the increased space, we do need to be really smart about ensuring the right mix of uses are accommodated in the high FAR zones. We need a new kind of vision, new ideas, innovative fresh thinking. Affordable housing, public spaces, large green areas, accessible public spaces at suitable scale, safe spaces for children, walkability, transit-oriented development, mixed-use, mixed-income communities, sustainable communities, a whole host of new concepts need to be built into a new vision for Delhi.
To densify is not enough, it needs to be done very sensitively. People need to be involved. We need to take firm decisions, not pander to a specific class of people, politicians, bureaucrats, the usual suspects. Increased density will need a new moindset and buy-in from all the above mentioned anf that is an uphill task. For instance, New Moti Bagh is a government colony recently built. Driving past is enough to see what a colossal wastage of land it is, in a prime South Delhi location. Smartly built apartments or duplex villas would have freed ample spaces for more multistorey housing and a large green lung for the neighborhood. Instead, the government has built a large number of ill designed, poorly planned, sprawling ‘bungalows’ that smack of an outdated post-colonial mindset of what the ‘sahib’ is entitled to. Urban Harakiri is what I call it.
And of course, there is that critical piece- infrastructure. Roads, sewage, drainage, electricity, water, public amenities, parking, so many details to get right if increased FAR is to be a reality. The carrying capacity of the land needs to be increased hugely by planning, engineering and investment. This is an enormous opportunity for sustainable design as well.
My third concern is more at an urban design scale. How exactly will the FAR increase happen? Will low-density areas that are now aging and dilapidated, like some Central Delhi government colonies, be slated for the redevelopment? I certainly think that is a great opportunity to give the city much-needed housing, retail, commercial space and public spaces right in the heart of the city. Then there are sensitive areas in the city that cannot be touched, like historic precincts. Will redevelopment happen in an incremental manner, or will we expect things to be razed to the ground and replanned and rebuilt? These are all issues that impact the lives of common people as much as they affect the economic survival and success of the city.
All I know is that there should be far more public debate about the measures proposed by our Urban Development Minister. Citizens deserve more information, more transparency about monumental changes that will impact their lives closely, give a new identity to their city and therefore impact their identity as well. Citizens and urban professionals must be involved to build a new vision. I cannot emphasize this enough. If we do not insist, we will once again see our beautiful city being raped and plundered, like it was when the invaders came in during the Medieval Times. Ironically, these would be invaders from within. And we would be defenseless and defeated.
Affordability is relative, for sure. But when those who profess to be socially inclined build ‘affordable’ projects that are clearly catering to techies and professionals, I wonder who they think they are fooling. It is far easier to accept and understand mistakes in judgement made by a social developer when you clearly see their affordable projects are designed for low-income people. Yes, it is a hard market, but no, playing with nomenclature isn’t really fair. Yet, they say all is fair in low, war and business. And when profits get hit, strategies are known to go haywire and even the vision statement changes.
We saw two projects in Bangalore. The first, by Janaagraha, is an impressive project. One that appeals and invites even as you approach it, one that has tried its best to play fair, but also one with many loose ends (no electricity supply, stilted parking that cannot be accessed really because of crazy slope designs). The quality of construction is commendable and families we interviewed were thrilled to live here.
The second, by VBHC, was swank, used an efficient aluminum formwork technology to achieve efficiency, speed and quality. Safety, excellent finishes and the planning of the site smacked of middle class customers and sure enough, the prices range between 7 and 20 lakhs, with few units at the lower end and many more at the higher end of the price spectrum. Young IT professionals seems to be the target customer here; no auto drivers or factory workers would live here I think.
It was very interesting to see both these projects. The baby steps to what is hopefully set to grow into a more robust, well developed market in the future, to which the ratings we are working on will contribute. Here are a few snapshots from the site visits. Keep in mind- What I click is what I feel, not what I want to show you, the reader!
At work, I’m part of a team working to set up a system for certifying affordable housing projects. The initiative is that of the Ashoka Innovators for the Public and we at mHS are working on the aspects of the rating system that would impact the low-income community.
Anyway, during our discussions, we often come to the point where we wonder if the rating should consider whether the contractor uses ethical and legal practices for treatment and payment meted out to labor working on the project. If they use child labor, for instance, or use sub-standard shelter to house their labor, they should drop lower in the ratings, we think.
Today, on the occasion of Labor Day, The Hindu carried an excellent editorial written by Moushumi Basu on the subject. She spells out clearly the Acts contractors and construction companies violate when they pay lower wages, do not build decent shelter, do not ensure safe conditions for work, etc. Moreover, developers and construction companies who have ridden the wave of India’s GDP growth (and continue to do so despite slower growth) have no business to do this at the cost of the labor that works for them. It is a sad tale of mistreatment of those who have no voice. Besides the legality, where’s the humanity here? Would it really hurt to pass on a tiny bit of your profits towards improving the lives of those that made your projects possible, often risking their lives, migrating far from their homes?
So in our ratings projects, we’re really wondering….how do we factor in the humanity/ethics (or lack of these) of developers into ratings for affordable housing, where profit margins are lower than regular projects, when they fail to factor in regular projects where profit margins are decent?
Implementing quality through self regulation is the only way for developers to gain credibility- Feb 17, 2012
Every time I help someone out with interiors advice, I am aghast at the poor quality of construction developers offer. It is specially galling when the buyer has paid an exorbitant rate and is hoping to achieve a high quality of life in an apartment into which he/she has poured a lifetimes savings and expectations.
Far from being ready to move in, apartment owners have to deal with poorly finished woodwork, peeling paint, tiles without the joints pointed, and much more. This morning I saw a sagging front door that was dragging on the floor and coming off its hinges. The builder had nailed on some shards of wood to fill in the gap above the door caused by the poor installation.
Developers are clearly taking advantage of low awareness among buyers about what quality and aesthetics to expect.
I fail to understand why builders turn a blind eye to quality issues when indeed quality is the most important differentiator, guaranteed to impress and build a credibility that will win customers with much less effort. Organizations like CREDAI, which work towards improving the real estate industry by bringing together private sector developers, must focus on creating awareness of quality standards among customers. Teaching buyers to look out for signs of good quality will place pressure on developers to maintain minimum standards. In fact sample homes must be mandatory, display the promised quality of construction and further, builders should legally promise to match the displayed quality. A quality checklist must be made public and a complaint cell created in builders organizations to address grievances in a professional and technical manner.Unless proactive steps like this are taken by the developers and a progression towards self regulation occurs, buyers are going to continue to brand builders as a bunch of rogues. That the homeowners I meet shrug and sneer at basic quality glitches speak for how low their expectations are from the builder.
At mHS, we are a part of a larger exercise facilitated by the Ashoka Foundation to develop ratings for affordable housing, where quality is an even greater challenge. How do we hope to deliver private sector housing that meets basic standards to the poor when the rich do not yet dare to expect quality?