National Conference

“Affordable Housing for All”

on
4th & 5th April 2007, Hotel Ashok, Chanakyapuri, New Delhi
(In association with Ministry of Housing and Urban Poverty Alleviation,
Govt. of India)

The Chief Ministers Conference on “Affordable Housing for All” is being organized by National Real Estate Development Council (NAREDCO) on 4th & 5th April 2007 at Hotel Ashok, Chanakya Puri, New Delhi, as part of 7th National Convention of NAREDCO, to focus on provision of affordable housing, real estate and allied urban infrastructure & services in the country. The Chief Ministers’ conference is aimed at deliberating and recommending concrete action plan to make affordable houses available to all, particularly
to poor and economically weaker section of the society.

Affordable Housing: Present Scenario

As the country enters in to an era of economic growth, economic liberalization and prosperity, cities seem not yet ready to accommodate the growing population in terms of housing, basic services and city infrastructure. The twin problems of affordability and availability continue. The estimated shortage of houses in urban areas, at the beginning of the Eleventh Five Year Plan, is around 25 million and 97 per cent of this is in Low Income Group (LIG) and Economically Weaker Sections (EWS) categories.

The growing urbanisation is creating immense pressure on existing civic amenities. Lack of housing and civic facilities have led to the creation of slums and squatter settlements. The slum dwellers live in unhygienic condition and do not have access to basic services like drinking water, sanitation, healthcare and education etc. As per latest statistics, nearly 62 million urban people live in slums and squatter settlements, consisting over 21 per cent of the urban population.

Though cities are engines of growth and contribute nearly 60 per cent to the country’s Gross Domestic Product, the urban infrastructure has not developed in accordance with the requirements of time. Massive effort is needed to streamline and upgrade the existing infrastructure including renewal of old cities to meet the need of growing urbanisation. The potential of JNNURM, launched by Union Government in December 2005, is to be fully utilised in this regard.

What are the deterrents to the growth and development of housing and urban infrastructure in cities? Are they due to archaic rent control laws, Urban Land Ceiling Act, high stamp duty, low property tax, lack of material standards and modern construction techniques or due to limited access to housing finance, lack of FDI, problems in land acquisition by developers, non- availability of single-window clearances for realty projects, absence of regulatory mechanism and lack of appropriate and cost effective technologies in housing construction. All these have to be properly evaluated and addressed.
     
Since the country is likely to face huge shortage of houses, there is need for a sustainable, equitable, humane and socially inclusive development plan which would cater for the housing and basic services of the citizen in general and Economically Weaker Sections, Urban Poor and Slum Dwellers in particular across the country.

Opportunity for the Economy: High Growth Sectors

As there is a pressing demand to meet the social obligation of affordable housing for all, this provides an opportunity to boost real estate development & investment, which in turn has the potential for the rapid growth of the Indian economy. The massive demand for housing and related infrastructure translates into huge business opportunity for the industry.

Some of the high growth sectors offering abundant opportunity to the industry are:

Housing
The housing shortage, as per official estimates of 10th Five Years Plan, is 22.4 millions, almost evenly divided in urban and rural segments. The investment estimated to cover this shortfall is Rs. 1,50,000 crores on housing and Rs. 2,50,000 crores on related infrastructu res. The nationwide housing shortage at 22.4 million residential units continues to increase, with increase in population and urbanization, creating more demand for housing.

Office
One-fifth of all Fortune 500 companies including Eli Lilly, General Electric, and Hewlett Packard have set up research and development facilities in India. By most estimates, the IT/ITES growth is fuelling huge real estate requirements - some 20 million sq ft of high quality IT/ITES space would be required this year and looks set to be the level of demand in the next few years.

Retail
A study done by Knight Frank India indicates that by 2007, approximately 75 mn. sq.ft. of mall space would be available in India. Retail sector, which is USD 200 million presently, is expected to grow to USD 450-500 billion by 2010. Organized retail, currently at USD 3.2 billion, is poised for strong growth in India because of its demographics. Some 70% of its population is under 35 years of age and the median age is 24 years.

Special Economic Zones
Special Economic Zones (SEZs) are likely to generate US$ 2 billion of FDI in next three years. A 50 per cent growth in employment opportunities in the SEZs is also expected. The additional employment expected in the Zones is about 50,000 in the next year, up from the current 95,000. SEZs can help create high quality infrastructure in pockets, provide a liberal and supportive business policy environment, thus kick starting growth in manufacturing. For the Real Estate Developers, Special Economic Zone is another area of growth and diversification.

Housing Finance
Rapid population growth along with the growth of India’s middle class is creating demand for housing. Household formations are increasing and to increase home ownership, the government has begun to develop a mortgage market. Financing is becoming available to more first-time buyers and buyers of second or vacation homes. Currently, mortgages account only for about 2 percent of India’s GDP, compared to 54 percent in the United States.

National Urban Renewal Mission
To develop 63 cities, total support available from Government of India is Rs. 50,000 crore through JNN-URM with matching contribution from cities/states. An outlay of Rs.1, 26,586 crores over next seven years, starting from 2005-2006 is proposed under the National Urban Renewal Mission (NURM) to cover 63 cities comprising 7 mega cities of over four million population like Delhi, Mumbai, Ahmedabad, Bangalore, Chennai, Kolkata and Hyderabad, 29 one to four million population cities and 29 less than a million population cities.

Conference:
With the above background, NAREDCO is organizing the “Chief Ministers’ Conference”, as part of its 7th National Convention, on “Affordable Housing for All” on 4th & 5th April 2007 at Hotel Ashok, Chanakya Puri, New Delhi.

Objective:
To evolve a blueprint for building a global India with special emphasis on “Affordable Housing For All”. It will include the following sub-issues: