Pranay Vakil, Chairman, Knight Frank India
India has the second largest population in the world and is expected to overtake China by 2025. Fulfilling the housing needs of the Indian population which is growing at 1.41% annually is a tremendous challenge for the government today. India’s urban population too is steadily rising and is expected to reach close to 600 million by 2031, putting Indian cities and towns in the center of the country’s growth trajectory.
Today urban India’s housing shortage itself is estimated to be a mammoth 24.7 million housing units and nearly 99% of this shortage is in the low-income housing bracket. The real estate industry has been making the most of this massive demand but development has been solely motivated by profit and has failed to ease the housing deficit.
Coupled with a lax regulatory scenario and its well earned reputation as a convenient outlet for black money, this industry has become a haven for tax evaders. This proliferation of a parallel cash economy has created an asset price bubble which has refused to burst even in the face of a global economic crisis.
The current housing crisis in the urban centers can be alleviated to a large extent if the powers that be focus on the pillars of transport infrastructure, industry regulation, rental housing and organizing an efficient funding mechanism to the sector.
Transport Connectivity:
Urban infrastructure has not kept pace with the massive influx of people. Roads in a constant state of disrepair, perpetual traffic congestion and an overstressed rail network are characteristics of our transportation system. One only has to look global at leading western cities like Manhattan and London which have multiple efficient lines of commute into the CBD.
Manhattan faces much of the same land constraints of Mumbai as well as the fact that it is a peninsular city. However, efficient and farsighted planning has ensured its evolution over and under the ground with skyscrapers and underground metros which maximize land-use. Its local railways connect locations up to 132 kms away and ferries provide connectivity to dense residential hubs like New Jersey. Using this example as a model, existing FSI norms for frontline cities such as Mumbai, Delhi and Bangalore must be relaxed to maximize land-use.
It is critical for the development of any urban center that transport infrastructure be augmented by avenues which have a minimum land footprint such as waterways and flyovers and are built to last and don’t require repairs during every monsoon. The very approach to FSI norms, input costs, taxation and approval processes needs to change if supply is to be increased to cater to the right demographic in the right locations.
FSI norms should be relaxed for areas which are close to transportation nodes like highways and stations so that the urban populace can be concentrated there, tax sops and TDR should be provided so developers are incentivised to build for the bulk of the masses at lower ticket sizes.
