Housing shortage

GROUP MEMBERS : RASOON, RIFANA, ROHAN, ROSE, SANDRA

In general, a housing shortage follows the economic principles of supply and demand. When

the production of housing outpaces the demand there is a housing surplus. When housing

production falls behind demand there is a housing shortage.

A lack of housebuilding is the driving reason for the housing shortage, however, other

contributory issues include:

● Increasing population.
● Changing lifestyles meaning more people live alone or in small households.
● Difficulties and delays obtaining planning permissions.
● The cost of land.
● Protection of the green belt.
● Difficulties developing brownfield land,
● Land-banking by developers.
● Inefficient building methods.
● Skills shortages
● A decline of the small- and medium-sized housebuilding sector.
● Space standards and other minimum building requirements.

Housing shortage would not be a major problem if there is no mismatch between

the people for whom the houses are being built and those who need them. It would,

however, be unrealistic to assume that those living in ‘housing poverty’ would have

affordability and access to the burgeoning supply in the market. Within the urban

population, there is a rapidly growing informal sector whose ability to borrow from

the formal market is not adequately recognized.

Estimation of Urban Housing Shortage

in Urban India (2012) as per the estimate of the Technical Group on Urban Housing

Shortage (TG-12) (2012-17) constituted by NBO, M/o Housing & Urban Poverty

Alleviation. The estimate is based on Census & NSS 65th Round results on Housing

conditions and Urban Slums (July 2008-June 2009) with usual inputs like obsolescence

factor, congestion factor & homeless households

The Obsolescence Factor : Non serviceable Units (0.99 million as per Census

2011) is taken out of the housing stock. All bad houses excluding those that are

less than 40 years of age (1.39 per cent NSS 65th Round results ) and all houses

aged 80 years or more (1.43 per cent – NSS 65th Round results) constitute the

obsolescence factor (2.27 Million) .

The Congestion Factor :The ratio of households that are residing in

unacceptably ‘congested conditions’ from physical and socio cultural view point

(viz married couples sharing the room with other adults etc) was worked out

using NSS results – 65th round. The number of households requiring a separate

dwelling unit on account of congestion comes out to 14,986,312

Homeless People : Census 2001 data of 0.8 million homeless people has been

assumed to remain constant during 2001-11. Considering that half of the

homeless are single migrants and the other half have average household size of

three, Technical Group calculated total housing requirement of 0.53 million

a. Shortage = Households minus Houses or just add houseless households

b. Fixed proportions.

c. Demand and affordability based shortage and affordability based shortage

d. Regression equation based on HH and Houses

e. Normative approaches: Households living in unacceptable housing conditions

Issues in Estimating the housingk Shortage

a. Adding the different components (to include the difference between Households and

houses as done for the Eleventh Plan)

b. Shortage in terms of Households needing houses not in terms of Housing Units

c. Combining Census and NSS data in making projections

Components of Housing Shortage Households residing in

Obsolescence Factor •

Non Serviceable Katcha (temporary) Houses

All bad houses excluding those less than 40 years old

80 years old houses (Old structurally week)

(Unacceptable as per social norms)

• Households with one or more married couples sharing room with a person aged 12 years or
more

Houselessness

Households living without any house (open, pavements)

Three fourths of the shortage is in the EWS( Economically Weaker Section Income up to Rs
5000 per month ) category and another quarter of the shortage is in LIG (Lower Income
Group- Income between Rs 5001- 10,000 per month) category. In the latter, a significant
proportion of shortage is on account of congestion in living conditions.

Key statistics:

• By the year 2030, an additional 3 billion people, about 40 percent of the world’s population,
will need access to housing. This translates into a demand for 96,150 new affordable units
every day and 4,000 every hour. (UN-HABITAT: 2005) • One out of every three city dwellers –
nearly a billion people – lives in a slum and that number is expected to double in the next 25
years. (Slum indicators include: lack of water, lack of sanitation, overcrowding, non-durable
structures and insecure tenure.) (UN-HABITAT: 2006)
• As much as 70 percent of the urban housing stock in sub-Saharan Africa, 50 percent in
South Asia, and 25 percent in Latin America and the Caribbean is of poor quality and not in
compliance with local regulations. (Kissick, et al: 2006)

• Access to land is fundamental to adequate shelter. Having legal title to that land encourages
families to invest and improve their homes and allows them to access credit and other public
services such as water and electricity. Nearly one sixth of the world’s population is living
without secure tenure (UN-HABITAT: 2008).

• The quality of housing stock & amenities directly affect health & quality of life One’s health is
directly linked to housing and housing related basics such as water and sanitation. In Mexico,
researchers at the World Bank and University of California, Berkeley, found that replacing dirt
floors with concrete floors improved the health of children.

• 2.6 billion people or 39 per cent of the world’s population live without access to improved
sanitation and 751 million people share their sanitation facilities with other households or
only use public facilities. (World Health Organization, 2009)

Gap in Housing Stock as per Census 2011:

Eight Crore Census houses have been added. Figures of houseless population and infirm
structures would also be required for making accurate estimation of housing shortage, more
so in view of the increasing number of vacant houses owned by people who already own/rent
a house.

Govt Policies for affordable housing –

First National Housing Policy in India was formulated in 1988, followed by a new National
Housing Policy in August 1994.
Further, in July, 1998 , another National Housing & Habitat Policy was announced with some
landmark initiatives like involvement of multi-stakeholders, repeal of Urban Land Ceiling Act,
permitting Foreign Direct Investment in housing and real estate sector, etc.

However, all these policies were generic and applicable to both rural and urban areas. Taking
into account emerging challenges of required shelter and growth of slums, the first ever
urban areas specific National Urban Housing and Habitat Policy, 2007 was announced in
December 2007.

The National Urban Housing & Habitat Policy, 2007 has sought to earmark land for
EWS/LIG groups in new housing projects for provision of affordable housing for this segment
of the population .

To prevent frauds in loan cases involving multiple lending from different banks/HFCs on the
same immovable property, the Government has facilitated setting up of Central Electronic
Registry under the SARFAESI Act, 2002. This Registry has become operational with effect
from March 31, 2011

The Jawaharlal Nehru National Urban Renewal Mission (JNNURM), was launched in
December 2005 with aim to cover construction of 1.5 m houses for urban poor during the
Mission period (2005- 2012).

• Basic Services for the Urban Poor (BSUP) seeks to provide seven entitlements/ services -
security of tenure, affordable housing, water, sanitation, health, education and social security
in low income segments in the 65 Mission Cities.

• The Integrated Housing and Slum Development Programme (IHSDP) seeks to provide
the above mentioned 7 entitlements, services in towns/cities other than the Mission Cities.

The Indira Awas Yojana (IAY) has been focused on the provision of cash subsidy scheme to
rural BPL families for construction of dwelling units using their own design and technology.
The funding under the Scheme is provided by the Centre and State in the ratio of 75:25
respectively.

The Two Million Housing Programme, launched in 1998-99 is a loan based Scheme and seeks
to facilitate the construction of 20 lakh additional houses per annum of which 7 lakh are
targeted in urban areas and 13 lakh in rural areas.

Interest Subsidy Scheme for Housing the Urban Poor (ISHUP) has sought to enhance
affordability of the urban poor through the provision of an interest subsidy of five per cent per
annum on a loan amount of up to 1 lakh for the economically weaker sections and lower
income groups in the urban areas for acquisition/construction of houses.
The Government has also launched a scheme of Affordable Housing in 355 Partnership with
an outlay of 5,000 crore for construction of one million houses for EWS/LIG/MIG with at least
25 per cent for EWS category.

The Scheme aims at partnership between various agencies/ Government/parastatals/ Urban

Rajiv Awas Yojna (RAY) aims to create a Mortgage Risk Guarantee Fund to enable provision
of credit to Economically Weaker Sections (EWS) and LIG households and to encourage the
States to adopt policies that will create a slum free India on ‘whole City approach’. Various
Initiatives have been taken by State Governments also.