Rethinking affordable housing

Reforms in land, finance and rentalmarket needed

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India's challenge in urban housing does not stem just from inadequate access to credit or home-ownership schemes. Cities are failing to create conditions where it is economically viable to build affordable homes, pushing households into informal settlements, long commutes, and higher debt. A new NITI Aayog report on affordable housing attributes this collapse in supply to high land costs, restrictive planning norms, weak rental markets, regulatory delays, and the withdrawal of fiscal incentives. Resultantly, affordable housing has become a high-risk, low-return proposition for both developers and financiers. Over the past decade, the segment has attracted less than 8 per cent of flows into residential private equity while foreign funds accounted for just 10.2 per cent of inflows into the segment.