Affordable and Sustainable Habitat - Our System View

Govenrment of India Initiatives

The central government has taken the following initiatives for providing affordable houses to the rural as well as urban BOP.

The houses built under Indira Awas Yojana mandates that pukka houses needs to be built but it does not specify on design. The designs are determined by village panchayats taking into consideration local needs, available construction materials as well as local skills. Hence the houses shown from different parts of the country in the image above have different characters.

TATA nano house

Tata Group recently announced the nano of housing. It proposes to offer a flatpack of dwelling materials including doors and windows for a 20 sq. m. house at Rs. 32,000. Tata is also developing a 30 sq. m. version that will come with options of verandah and solar energy systems. A participatory approach has been followed. The innovation came up from Tata Steel. The pilots are planned to be set up in West Bengal by the end of this year. Plans to make local production process are also underway. We might see the first of these houses coming up within the next 6 - 8 months.

Source: http://www.dnaindia.com/money/report_after-nano-tata-plans-rs32000-house_1566154
             http://www.caradvice.com.au/128924/tata-announces-worlds-cheapest-flatpack-house/

Different perspectives to Affordable Habitat

It is interesting to note how different stakeholders look at affordable habitat. For example, an asset manager defines that an affordable habitat has to be affordable in terms of living cost as well as transit cost to the work place. On the other hand, a builder's point of view is: to make a house affordable, it should be located in the city outskirts. Hence to understand the dynamics of this domain, we studied the analyses of Jones Lang LaSalle India and Lafarge Group.

Jones Lang LaSalle - Indian Real Estate - Charting a Global Course
Jones Lang LaSalle is a professional services firm specializing in real estate. It provides investors, developers, local corporates and multinational companies with a comprehensive range of services including research, analytics, consultancy, transactions, project and development services, integrated facility management, property and asset management, sustainability, warehousing and logistics, capital market, residential, hotels, health care, senior living, education and retail advisory. For further information, please visit www.joneslanglasalle.co.in. They define the Indian Real Estate Ecosystem as shown below:

Source: http://www.joneslanglasalle.co.in/ResearchLevel1/Indian%20Real%20Estate%20-%20Charting%20a%20Global%20Course.pdf

Lafarge Group

The study was conducted by Escale Responsable for Lafarge Group in May 2010. Lafarge is a world leader in building materials. In order to understand the housing needs, aspirations and the market segment at the bottom of the pyramid in India, a study was conducted by interviewing slum dwellers in Kolkata and some organizations working in this sector. The following organizations were interviewed:

This study identified the following aspects as the key to affordable habitat:

Following affordable habitat models in this segment were identified in the study:

Availability of affordable finance also comes up as one of the major influencers.

Source: http://www.escale-responsable.com/wp-content/uploads/2010/08/Affordable-housing-in-India_needs-and-emerging-solutions.pdf

Both studies agree on the following aspects:
1. A strong stress on development of effective micro-finance infrastructure and other finance sources
2. Need for new technology and innovation
3. Sustainability
4. Efficient construction management
5. Industrial mass production of houses
6. Availability of cheap land

Indian Urban Growth

As per the 2011 Indian census, the population of India stands at 1.2 billion of which 31.16% live in urban areas. This is up by 3.35% as compared to a decade ago. The decadal urban growth rate of India stands at 31.8% while that for rural India is 12.2%, a decline of around 6%. The rate of urban growth has been caused due to multiple factors like - creation of SEZs, social and economic order, government policies, etc. The housing needs of the country is very deeply affected by these changes. The images below graphically represent the percentage of urban population in different states and the rate of growth in urban population.

                                  

Regional housing needs and market potentials can be identified by an in depth study of the factors that are influencing the Indian urban growth.