A passage to India….

Matthew Foreman

What I will cover?

• How - CIH (South East) International Group

• Why India?

• Who visited?

• India in context

• Financing affordable housing in India

• What did we see and learn?

• Some thoughts from the visit

• Questions

CHARTERED INSTITUTE OF HOUSING

SOUTH EAST REGIONAL BOARD

INTERNATIONAL HOUSING GROUP CIHSE International Housing Group

CIHSE International Housing Group

• Increasing relationships between CIH

members and housing professionals in other

countries through sharing knowledge and

experience

• Arrange international visits for CIH members

of all regions (and their guests)

• Have covered 4 continents

• How did I get involved ?

What has CIHSE covered to date…

• We spent this Valentine’s Day in India!

Map © Google Maps 2016

Why India?

• Housing for All - a vision of the

Indian Prime Minister

• 20 million new homes would be

built to meet shortage in next

seven years (by 2022)

– 15 million low income homes

needed

• £50 million available to cover

concessional loans and technical

assistance.

India in context

• Over 1.3 billion residents • Almost 1 in 5 people on earth

and an increasing population • A young population

– 65% under 35 – Average age of 25

• Low life expectancy - 66 • 187 million homes

– 51% permanent dwellings – 85% no electricity – 22 % no drainage

• 95% housing demand in low income households

Delegates…

17 delegates …

• Mainly from

South East

region

• RSL / LSVT

• Local Authority

• Independent / IT

Consultants

• University

Professor

• The Housing

Forum

ROUTE

Vadodara

Palghar

Slums?

Insert pic

There’s no ‘one’ social housing model

in India..

Financing Housing in India

• ‘Affordable’ housing is ‘5 times annual income’

• Low incomes - monthly income of approx. £200 – £250 per month

• State focus on facilitating …but not ownership !

• Affordable housing sites ‘gifted’ land in development deals with Local Government

• Infrastructure costs

• Largest rental market for ‘informal housing settlements’

Financing Housing in India

• Financing housing is a challenge – Informal economy

– Low incomes

– Lack of income ‘proofs’

• High interest rates 10-15%

• Short repayment periods – 15 years

• Micro Finance Companies set up to support cash flow and borrowing for affordable housing for low income households

• Second home investments + tax incentives

Financing Housing in India

• Affordable housing unit costs vary from £3k up to £22k

• Government supported financing - cash flow

• Subsidy through land costs • An example

– £8k deposit (saved by family members)

– £3k facility deposit (used for facility management)

– 12K loan • 10-15% interest rate • Loans over 15 years

Palghar East, Mumbai

• 90km North of Mumbai

• 302 apartments for sale

• 100% sold……but no one moved in yet

• 1 bed cost £22k

• 1 bed apartment to house 3-4 people ?

• “If I have a tool……I'm a plumber !”

• Infrastructure an issue

Palghar East, Mumbai

Phalgar East, Mumbai

Jaipur – the ‘Pink City’

Bhaivar township, Jaipur

• 2/3 bed apartments and community facility

• Approx 40 mins from Jaipur

• Land gifted by Government

• All homes sold via microfinance company

MHFC

• Ready to move into ……but no one lives

there

• No electricity - Can take years to connect !

Bhavirav Township, Jaipur

Adani Group - Shantigram

Adani Group - Shantigram

Adani Group - Shantigram

• Adani Group – $10bn turnover congolomgerate

– 10,400 staff

• Shantigram, Ahmedabad – New town, with residential, leisure and commercial zones

– 20,000 homes under construction

– 800 affordable homes

– 4.5km in length, single land assembly

– Developer provided all infrastructure • Including water treatment and power plants

• Includes golf course, cricket pitch, football pitch

• Hospital, transport, security

– Inspired by Milton Keynes masterplan

– 6000 homes built to date and main infrastructure

Adani Group - Shantigram

• Residential – Affordable units at £25K for a 1 bed

– Leisure focused mid market offering and older persons living • C.£50K for 2bed

– Higher end apartments - £100K to £280K (4 bed penthouse plus servants quarters)

– Luxury villas near the golf course – upto £1.2m

• Non-residential – 600,000 sqft commercial centre

– Retail mall

– New Adani office

– Health and police facilities

• Is history repeating itself ? – High density high rise

Adani Group - Shantigram

Paranjape Athashri – Vadodora

• Apartment complex for ‘senior citizens’ (55+)

• 350 units

• Supported living – Residential manager

– 24 hour care services

– ‘Maid’ service

– Tied into local doctors, physio and hospital services

– Door step services (banking, shops etc)

– Clubhouse for shared activities

– Designed so that residents can circulate internally

• Purchase price of c.£25K with a 3.5K deposit for maintenance

• Model is built around ongoing charges for residents

• New development for India, with parents no longer cared for at home

• Rural location for ‘fresh air’

Paranjape Athashri – Vadodora

Lessons & Reflections..

The small stuff • Applications by mobile phone • Mortgages without a secure income • Affordability assessments

– CEO cant afford an ‘affordable home’ • Direct Debits • No housing management skills /

services • Co-operative management • Solar panels……no where to be seen

!! • Build quality and skilled workforce

retention

Lessons & Reflections..

The big picture An insight into our past…….

– A structured rental market opportunity ? – Services and Standards – Affordability / new products to fit – Grant / housing benefit safety net – Working conditions

• Structure without corruption • Is the future to ‘think big’ • Be safe…..

Health and Safety ?

Questions / Thoughts ?