The real estate market in India is witnessing a massive change with the affordable segment being reduced and mid and luxury segments expanding. The policy and social implications of this trend are far-reaching and especially regarding urban development, housing accessibility, and social equity. Affordable housing, generally those whose cost is less than [?]40 lakh, have traditionally been the foundation of helping first-time buyers and how lower-income households can access the property market. However, its dwindling control of market-leaders in major urban areas is causing an alarm amongst policymakers and the society.
Affordable housing is an important product category and not merely that, it is a key instrument of inclusive urban development. The homes serve first-time buyers and those with lower income, thus decreasing overcrowding, stabilizing the rental markets, and instilling financial security with the purchase of a home. Also, affordable housing leads to local economic activity by generating demand on construction, materials and services to the benefit of various stakeholders in the economy.
The supply of affordable houses is declining as developers are focusing more on mid and high end developments as they are more lucrative. Evidence of the large metros indicates that the proportion of affordable housing has declined tremendously over the past few years, leaving behind a housing gap in low and middle-income households. A large number of prospective homeowners are being forced to rent which is not always stable and not financially beneficial in the long run. Increasing rental prices in the cities also contribute to the affordability burden, which has general impacts on the quality of life.
The declining affordable housing market demands the policy makers to intervene. In order to stimulate developer activity, tax breaks, land subsidies, and expedited approvals might be enhanced. Efforts such as the Pradhan Mantri Awas Yojana (PMAY) have been used to finance the construction of houses, although their execution has been slowed down by the latency and the absence of funds. An improved intervention of less complex programs with well defined regulatory frameworks, public- private joint- ventures and specific subsidies would assist in bridging the demand and supply gap.
The availability of affordable housing should be guaranteed to ensure social equity. When the poor families are locked out of the property market, it strengthens social economic boundaries and restricts upward social mobility. City planners have to incorporate affordable housing in urban master plans, which should be mixed with mid- and high-end constructions to ensure there is a balanced and comprehensive urban ecosystem.
This movement toward high cost housing has social and policy outcomes. To restore this segment the government, the developers, and the financial institutions have to pull together. Through affordable housing, India can achieve inclusive urbanization, reduce the housing gap, and provide equal opportunities to the citizens to support the dream of owning a home.
