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AFFORDABLE HOUSINGIN TAMIL NADU

ASSESSING THE MARKET POTENTIAL

32 Knight Frank Advisory Services

TABLE OFCONTENT

AFFORDABLE HOUSING IN TAMIL NADU

ABBREVIATIONS 4

POPULATION AND URBANISATION TREND 4

HOUSING SCENARIO IN INDIA 6

URBAN HOUSING SHORTAGE IN INDIA 7

EVOLUTION OF HOUSING SECTOR 8

DEFINING AFFORDABLE HOUSING 10

EXISTING POLICY FRAMEWORK 11

STATE POLICIES 16

TAMIL NADU - STATE OVERVIEW 24

HOUSING SCENARIO IN TAMIL NADU 28

CITY OVERVIEW – CHENNAI 30

CITY OVERVIEW – COIMBATORE 34

CITY OVERVIEW – TRICHY 38

CITY OVERVIEW – MADURAI 42

CITY OVERVIEW – ERODE 46

CITY OVERVIEW – TIRUPPUR 50

CITY OVERVIEW – SALEM 54

CITY OVERVIEW – TIRUNELVELI 56

CONSTRUCTION TECHNOLOGY 60

FINANCING OPTIONS 64

AFFORDABLE HOUSING – KEY PARAMETERS 65

54

INR Indian Rupee

Mn Million

sq.ft Square Feet

sq.km. Square Kilometre

sq.m Square Metre

GDP Gross Domestic Product

FDI Foreign Direct Investment

CPI Consumer Price Index

LIG Lower Income Group

MIG Middle Income Group

HIG Higher Income Group

EWS Economically Weaker Section

PMAY Pradhan Mantri Awas Yojana

FSI Floor Space Index

TDR Transferrable Development Rights

MEASUREMENTS

1 acre 43,560 sq. ft.

1 mn 10 Lakh

1 sq. km. 100 Ha

1 sq. mt. 10.764 sq. ft.


With a total population of around 1.2 billion, India is the

second-most populous country in the world (World Bank

2015). The 69 years of independence have seen many socio

– economic transformation linked to urbanization trend post-

colonial rule.

As per Census 2011, more than 31% of the total population

i.e. about 377 million is urban population, living in 7,933

urban centers including 53 cities with populations above 1

million and 3 mega cities (Greater Mumbai, Delhi and

Kolkata).

ABBREVIATIONS POPULATION AND URBANISATION TREND

With continuous shift of population from rural to urban areas,

the country is witnessing rapid urbanization. During the

period 2001-2011, the proportion of rural population

decreased from approximately 72% to 69%. As per IIHS –

Urban India 2011, in 1951, there were only 5 Indian cities with

a population greater than 1 million and only 41 cities greater

than 0.1 million population. However, in 2011 there were 3

cities with a population greater than 10 million and 53 cities

with population greater than 1 million.

Knight Frank Advisory Services

Population

India PopulationRural PopulationUrban Population

2001

102.974.328.6

2011

121.083.337.7

Difference during previous decade

18.19.09.1

2017*

1338944

Difference during current decade*

12.05.76.3

Source: IIHS, Knight Frank Research

Source: Census 2011, Knight Frank Research

The table below provides population (in crore) in urban and

rural areas during the years 2001 and 2011.

Since 2001, the growth in urban population has stagnated at

around 2.80% and growth in the rural population has slowed

down to 1.16% in 2011. The chart below shows growth in

urban and rural population in India

Further, it is noted from the above chart and table below that

the overall population growth rate of the country has slowed

down recently. This is primarily on account of sharp decline in

the growth rate in rural areas, while the growth rate in urban

areas remains almost the same.

This expanding urban population has made increasing the

housing supply necessary. For a variety of reasons, the

growth in demand is not being met by supply of housing

units resulting in housing shortage in urban areas.

The next section gives an overview about the current

scenario of housing market in the country with respect to

supply and absorption in prominent cities.

Decadal Growth Rate of Population (in %)

IndiaRuralUrban

1991 - 2001

21.518.131.5

2001 - 2011

17.612.231.8

Difference

-3.9-5.90.3

Source: Census 2011

URBAN POPULATION TOTAL POPULATION

FIGURE 1URBANIZATION TREND (1951 - 2017)

Source: Census 2011, Knight Frank Research *Estimated Population

1951

1961

1971

1981

1991

2001

2011

2017*

0 200 400 600 800 1000 1200 1400 1600

Population in Million

TOTAL URBAN RURAL

FIGURE 2ANNUAL EXPONENTIAL GROWTH RATE OF POPULATION

Source: ADBI, Knight Frank Research

4.5

3.5

3

2.5

2

1.5

1

0.5

01961-19701951-1960 1971-1980 1981-1990 1991-2000 2001-2011

4


significantly faster than the income level of homebuyers.

During the last four years, the growth in residential prices in

most of the top eight cities of India has been below retail

inflation growth – a clear reflection of time correction. But still

this is not enough to make housing affordable to majority of

the homebuyers in the top cities of India. Developers need to

give a relook at the pricing, size and configuration of

residential units in their planned developments and the

government should take a proactive initiative to develop

peripheral locations with required connectivity and

infrastructure.

Another factor that will help to stimulate the demand for

house purchase is the reduction in home loan interest rates

by banks. RBI has already reduced its policy rate by 175 bps

in the last two years and is likely to lower the policy rates by

another 25-50 bps in the next three to six months. Given the

liquidity situation and reduced policy rates, banks will have

sufficient elbow room to lower the home loan interest rate in

the coming months.

Fiscal incentives on home purchase could go a long way in

reviving the demand and any move towards addressing this

in the upcoming budget will give a huge boost to the

industry. Any move by the Government of India to increase

the limit on tax exemption on home loan interest and

principal amount payment in the upcoming budget could

provide the much needed fillip to the ailing sector.

Finally, implementation of the Real Estate (Regulation and

Development) Act, 2016 within the stipulated timeframe

could be a major factor in bringing back the confidence of

homebuyers in the real estate sector. The timely

implementation of this Act across the country will not only

make the sector more transparent but will also help in

attracting institutional participation.

We believe that by the end of 2018, when most of these

factors would have started showing a positive impact on the

residential segment, we will see the emergence of a new

base that will be used to analyse the future growth of this

sector.


As per Knight Frank Research, the residential market of the

top eight cities in India – Mumbai, NCR, Bangalore, Pune,

Chennai, Hyderabad, Kolkata and Ahmedabad ended on a

positive note in 2017 with unsold inventory witnessing a

19% drop compared to the same period of the previous

year. More than 228,072 units were sold in 2017 as

compared to 244,686 units in 2016.

HOUSING SCENARIO IN INDIA

The second half of 2016 started with the same pace, with

Q3 2016 sales volume showing a positive growth on the

back of the start of the festive season. Sales volume across

the top eight cities were holding steady at 67,000 – 68,000

units per quarter since Q1 2016 and we expected Q4 2016

numbers to be marginally better than the first three quarters.

As a result, we projected sales volume of 2016 to be

marginally higher than 2015 and had estimated an 8%

growth during the year.

At 528,494 units, the 2017 unsold inventory is at its lowest

level since 2010. The average quarterly sales used to be in

excess of 90,000 units in 2010. The new launches number is

much worse at just 24,300 units in Q4 2016, which is not

even one-fifth of its peak quarterly level observed during

2010.

The fall in sales volume and new launches were so severe

during Q4 2017, that it brought down the entire H2 2017

numbers, down by 7% and 19% respectively, compared to

H2 2016. H2 2017 reported sales volume and new launches

of 107,316 units and 40,832 units, respectively.

With this backdrop, the biggest question in the mind of the

stakeholders of the industry is – what next? Sales need to

be revived and the following points discuss various

measures that we believe will help to revive the demand for

homes in the coming quarters.

The first and foremost step that the industry needs to take is

to make houses more affordable. Currently, the biggest

factor affecting sales is the unaffordability of the

homebuyers. House prices till 2012 have increased

URBAN HOUSING SHORTAGE IN INDIA

The case for sustainable urbanization becomes stronger and

acquires greater immediacy in the context of the rural to

urban migration, changing demographics, socio-economic

composition, increase in households, formation of nuclear

families, and a burgeoning middle class. With most

megacities and medium-sized cities witnessing high

concentration of urban population, there has been a rising

pressure on housing as well as basic urban infrastructure and

services.

Considering the size of the homeless population in the

country in 2011 which was only 1.77 million (0.15% of the

total population), the housing shortage in India does not

appear very big. The homeless population contributes only

marginally to the housing shortage. The problem becomes

acute when, in addition to homelessness, the replacement

needs of houses in bad physical condition (due to age and

structural durability), as well as the ones that offer

substandard living conditions (due to the level of congestion

inside the house), are also considered.

The figure below shows the trend in urban population

increases are accompanied by increases in housing. This

shortage has been increasing despite numerous housing

programs implemented every 5-10 years

Note: Housing shortage = Households living in non-serviceable katcha (nondurable) +

households living in obsolescent houses + households living in congested houses +

households that are homeless

It has been noted that majority of the housing shortage in

urban areas is primarily attributed to congested living

conditions and lesser due to the existence of physically unfit

structures (nondurable and obsolete).

Further, the addition of new housing stock in the market has

not reduced shortages, implying that the target consumers

for the new stock are different from those households who

Num

ber

of U

nits

LAUNCHES SALES

FIGURE 3

Source: Knight Frank Research

ANNUAL LAUNCHES & SALES OF RESIDENTIAL UNITS - TOP EIGHT CITIES

0

1,00,000

2,00,000

3,00,000

4,00,000

5,00,000

6,00,000

2010 2011 2012 2013 2014 2015 2016 2017

Num

ber

of U

nits

2015 2016 2017


0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Mum

bai

NC

R

Ben

galu

ru

Pun

e

Che

nnai

Hyd

erab

ad

Kol

kata

Ahm

edab

ad

FIGURE 4CITY WISE HALF YEARLY SALES -RESIDENTIAL UNITS

Num

ber

of U

nits

2015 2016 2017


0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Mum

bai

NC

R

Ben

galu

ru

Pun

e

Che

nnai

Hyd

erab

ad

Kol

kata

Ahm

edab

ad

FIGURE 5CITY WISE HALF YEARLY LAUNCHES -RESIDENTIAL UNITS

mn

URBANHOUSEHOLD

URBANHOUSING STOCK

URBANHOUSING SHORTAGE


0

20

40

60

80

100

120

1971 1981 1991 2001 2011

FIGURE 6URBAN HOUSEHOLDS, HOUSING STOCK &HOUSING SHORTAGES IN INDIA


are creating the market demand for housing, and the stock is

unaffordable even for the targeted consumer group, which

leads to lesser absorption and higher vacancy rates.

The problem of housing shortages is more serious in rural

areas (in absolute terms) than in the urban centers due to the

size of the rural population in India (69% of the total

population)

creation of several housing finance companies for credit off-

take in the retail housing finance sector offering innovative

and competitive housing finance schemes, issue of Foreign

Direct Investment guidelines, enhancing the resource base of

the Housing and Urban Development Corporation, the

principal domestic funding agency for public housing

projects, fiscal incentives to entrepreneurs to invest in

development of housing projects, and internal restructuring,

so that viable housing projects could be taken up for the

lower income groups.

Increased liquidity and infusion of foreign investment into the

sector triggered the housing bubble between 2005 and 2007.

The year 2008 was a year of extremes, swinging from

extreme euphoria to unwarranted pessimism and prompted

revision of GDP forecasts. Stimulus packages have been

announced in various phases to accelerate the growth of the

housing and real estate sector including a INR 300 billion

package, designating loans of up to INR 2 million under

priority sector lending, reducing the cost of funds and

ensuring the uninterrupted flow of credit to productive

sectors of the economy and cut in excise on steel and

cement to lower the construction cost marginally.

As a result of the organization of the housing finance market,

increased public investment and legal reforms, the sector has

attained a considerable level of maturity with many private

sector participants in the housing development sector. The

wider network of primary lending institutions – commercial

banks, housing finance companies and other financial

institutions have substantially added to the capacity of the

housing finance sector. As a result, a better integration of the

housing finance system with the macro financial sector is

expected to emerge in the longer run. Significant priority has

been accorded by the government to the sector. This is

reflected in past budgets where a number of fiscal

concessions and other measures were extended to both the

providers as well as borrowers of finance. As a consequence,

demand for housing has picked up.

Nevertheless, it is important to note that while the number of

institutional outlets for housing credit has increased

considerably during the last decade, volume of funds for the

sector as a whole, accessibility of credit to the economically

weaker sections and affordability continue to be critical

aspects for the housing sector. Substantial investments are

needed to address the shortage in the sector.

Steering the wave of growth thrust driven by a strong

decadal urban and metro-population growth and the high

number of people moving upwards on the social pyramid are

private developers at the helm. Looking to capitalize on the

credit growth in housing, increased liquidity in the system

and competition amongst home loan providers leading to a

steep fall in interest rates, developers have been actively

generating ample housing stock and following aggressive

marketing strategies. However, their focus segment of

development brings out the lop-sided nature of development.

The country faces a shortage in housing and the shortfall is

largely in the lower-income brackets. The participation of

private developers has been very low since most of them

have restricted their focus to the oversupplied premium

segment owing to the exclusivity and high-profit margins the

niche segment offers. This has come in the way of the vision

of a balanced urban development, as the segments with the

maximum demand for quality housing stock and serviced

amenities like safe drinking water, good sanitation and

household electricity in line with in the town planning concept

i.e., LIG and EWS segments continue to be marginalized,

making the housing shortage wider. Besides, the exponential

growth in the informal sector in urban areas is creating

additional demand.

While lack of suitable policies and incentives to attract

developers to mass housing have led to this lack of

participation, of late, some concessions, such as increasing

FSI for special townships with affordable houses, cluster

approach for urban renewal and reservation for lower and

middle-class homes, as in Mumbai, have lured several

developers to this segment. Most developers today

recognizing the pressing need and market for affordable

housing for various socio-economic groups are attempting to

provide sustainable quality homes. Despite this, the housing

problem still remains unaddressed, as an apparent mismatch

in the price points for these homes and affordability levels

have made housing go beyond the reach of the targeted

groups. The case for arriving at a reasonable slotting of

affordability levels is strengthened by the fact that in a

product of this kind, for instance in the EWS category

housing which is dovetailed with a social objective, the

product should be formulated, priced and positioned in a

way that it percolates down to the lower rungs of the society.

For the MIG segment, the buyers should be offered a choice

in their affordability level without needing to stretch their

budgets to accommodate a higher price tag for a home.

To bridge the wide gap in housing for the identified

segments, there is a need to augment sustainable and

affordable housing stock along with related infrastructure like

water, drainage, solid waste management, electricity and

transportation in a synergistic framework.


Housing shortages in rural areas have almost been stagnant

(except in 2011), though the number of households has

doubled in the past 4 decades. This indicates that, with the

availability of land in rural areas, construction of a house is

easier, although the quality of construction has been lacking.

Hence, housing shortage in rural areas is primarily due to the

bad condition of the physical structures (nondurable and

obsolete) and lesser due to congestion.

EVOLUTION OF HOUSING SECTORThe reforms and policy initiatives taken so far towards

addressing the challenges of the housing sector will help to

chart the evolution of the housing sector through the post-

independence decades. The years after independence in

India witnessed increasing government control in the housing

sector, whereas in the pre-independence period, landowners

could put their lands into the housing market. The sector for

several decades was characterized by unorganized market,

development disparities, straitjacketing of development

approach and a deterrent rent control system. Traditional

construction and procurement techniques were used. Limited

financing options were available and the capital market was

not mature. Housing as an asset creation came at the later

stage in the hierarchy of needs of individuals. Further,

creation of development authorities and housing boards as

the major housing providers, slow pace of the cooperative

sector movement, introduction of the Urban Land (Ceiling

and Regulation) Act, 1976 as a central legislation all over

India created many hindrances for private land owners

intending to put their lands into the housing market which

ultimately put severe constraints on supply in a growing

demand scenario.

Another big setback to the housing sector was the prolonged

continuance of the Rent Control Acts in various states which

led to disputes, fear of non-eviction of tenants, dilapidation of

housing stock and locking up of property in prime areas of

the city from redevelopment. Moreover, restrictive town

planning laws and development controls inhibited private

sector participation in creation of townships on account of

lack of procedural clarity and uncertainty about economic

viability, etc. Apart from high stamp duties and cumbersome

procedures for registration of property transactions, lack of

incentives for investments to be channelized into the housing

sector and restrictions on foreign investments presented little

scope or incentive for private enterprise participation. On the

other hand, government promoted housing suppliers like the

housing boards and development authorities were totally

dependent on credit financing from various funding agencies

like Housing and Urban Development Corporation and

buckled under the pressure of cost recovery and huge loan

repayment.

The post-1990 period can be seen as the era of housing

sector reforms. In the macro economic backdrop of

liberalization of the economy as a whole, several sweeping

changes by way of structural reforms by the government

were heralded. Post economic crisis of 1990-91, successful

sequencing and pacing of these reforms resulted in a

favorable macro-economic environment. The National

Housing Policy clearly recognized the key role of public,

private and the cooperative sectors in meeting the housing

challenge. It envisaged a 'facilitative' role for the state and a

direct and proactive role for the other players – in particular

the role of the private enterprise and market forces.

The major housing sector reforms and market oriented

policies that were brought about had a positive bearing on

the housing sector as they encouraged the participation of

people and institutions at large in their various capacities, i.e.,

as savers, investors, lenders and borrowers in housing

activity. These included fiscal incentives to individuals

investing in house purchase in successive annual budgets,

mn

RURALHOUSEHOLD

RURALHOUSING STOCK

RURALHOUSING SHORTAGE


0

50

100

150

200

250

1971 1981 1991 2001 2011

FIGURE 7RURAL HOUSEHOLDS, HOUSING STOCK &HOUSING SHORTAGES IN INDIA


the absence of an institutional rental market in India,

affordable and low cost housing denotes ownership and not

rental housing.

Low cost housing generally refers to cost effective housing

that relies on 'low cost technology' that ensures similar

quality and durability as compared to more commonly used

technologies. In India, low cost housing is primarily aimed at

Economically Weaker Sections (EWS) and Low Income

Groups (LIG), and the intervention and involvement of

government authorities is likely to be prominent. As per the

latest available literatures , households having an annual

income of less than INR 6 lakhs are termed as LIG, and

households belonging to EWS will be further down in terms

of income classification i.e household having an annual

income of less than INR 3 lakhs. The concept of affordable

housing, in contrast to that of low cost housing, is applicable

across all income categories.

The affordability of a household in a given location is an

interactive outcome of the house price, household income,

spending and saving behavior and other demographic

factors like size of the household. It is recognized that

affordability is relative to geographical area, time and income

category. Thus, defining affordable housing continues to be a

challenge for major players of the real estate sector in India.

However affordability can be defined as provision of

sustainable shelter with basic amenities at affordable price

whilst affordability can be achieved by tweaking the factors

affecting the same:

Cost of land – Provision of Incentives to the private

developer for developing affordable housing projects and

PPP in housing projects as implemented earlier by the

Government.

Cost of Construction – Implementing construction

technology to reduce construction cost and using

sustainable building material to increase the building

performance and to reduce the operational cost.

Financial Support – In spite of PMAY's CLSS, Support from

financial Institutes would require to encourage the first time

home buyers in EWS/LIG sectors to avail housing loan by

slashing down the up-front payment either through

instalments or through subvention schemes.


• For both EWS and LIG, cost of the dwelling unit should

not exceed four times of the household's gross annual

income

• For both EWS and LIG, monthly repayment

obligation/EMI should not exceed 30 percent of the

household's gross monthly income

As per the “Affordable housing in partnership” scheme

launched in 2009 by The Ministry of Housing and Urban

Poverty Alleviation, criterion for EWS and LIG was

categorized in terms of unit area and repayment capability as

defined below:

• In terms of super built-up area, EWS and LIG category

units should not exceed 300 sq.ft and 500 sq.ft

respectively

• In terms of carpet area, EWS and LIG category units

should not exceed 25 sq.m and 48 sq.m respectively.

• Monthly repayment obligation/EMI for housing loan

should not exceed 30% to 40% of monthly income of the

buyer

As per “Pradhan Mantri Awas Yojana”, Housing for all

scheme launched in 2015 by the Ministry of Housing and

Urban Poverty Alleviation, criterion for EWS and LIG was

categorized in terms of income level and unit area as defined

below:

• In terms of income level For EWS, annual household

income should not exceed 'Rupees three lakhs' per

annum

• In terms of unit area for EWS, carpet area of the dwelling

unit should not exceed 30 sq.m

• In terms of income level for LIG, annual household

income should be ranging from 'Rupees Three Lakhs One

to Rupees Six lakhs’

• In terms of unit area for LIG, carpet area of the dwelling

unit should not exceed 60 sq.m

KNIGHT FRANK'S CRITERION FOR DEFINING

AFFORDABLE HOUSING

Affordable housing and low cost housing are the most talked

about issues in the real estate sector these days. However,

there is a distinct difference between the two concepts. In

The term 'Affordability' is considered as relative term which

has different meaning depending on the stake holders.

However 'Affordable Housing' has been categorized based

on certain criteria set by the Government to accommodate

housing for every household in India.

According to RICS Report on Making Affordable Housing

Work in India, Affordability in the context of urban housing

would mean provision of “adequate shelter” on a sustained

basis ensuring security of tenure within the means of the

common urban household.

CENTRAL GOVERNMENT'S CRITERION FOR

DEFINING AFFORDABLE HOUSING

In 2007 National Urban Housing and Habitat Policy was

implemented by Ministry of Urban Poverty Alleviation to

achieve provision of Housing for all with special focus on

economically vulnerable (EWS and LIG) segment in the

society.

The primary objectives of Affordable Housing of this policy

are:

• Accelerating the pace of housing development and related

infrastructure facilities

• Creating adequate housing stock both on rental and

ownership basis

• To Provide Capital or Interest subsidies for EWS and LIG

sectors

• Using Technology for modernizing the housing sector with

the concept of Green and Sustainable development for

energy and cost effectiveness

However no criterion was set in this policy to categorize the

EWS and LIG with respect to affordable housing hence a

Taskforce was implemented in 2008 on promoting affordable

housing by the Government of India to frame the defining

criteria for affordable housing.

As per “Taskforce on promoting Affordable Housing” with

respect to LIG and EWS, area of the dwelling unit, income

level and EMI repayment capability were considered as a

benchmark for defining the affordability as mentioned below:

• Carpet area of the dwelling Unit should not exceed

300 sq.ft for EWS and 600 sq.ft for LIG

DEFINING AFFORDABLE HOUSING

EXISTING POLICY FRAMEWORK

Over the years, the Central Government has formulated many

policies for housing and has assisted in the delivery of

affordable housing for the EWS, LIG and lower MIG. Housing

schemes by the Central Government are implemented by the

Ministry of Housing & Urban Poverty Alleviation (MHUPA).

The policies of urban development and housing in India have

come a long way since the 1950s. In the First Five Year Plan

(1951 - 56), emphasis was given on institution building and

on construction of houses for Government employees and

weaker sections. Subsequent plans focused on provision of

services along with shelter, and mobilizing private sector

efforts for low�cost housing. The first National Housing Policy

was formulated in 1988. National Housing and Habitat Policy

(NHHP) in 1998 aimed at ensuring “shelter for all” and better

quality of life to all citizens by using the unused potential in

public, private and household sectors. Subsequent

programmes include the National Slum Development

Programme (NSDP), night Shelter for urban shelterless, and

Valmiki Ambedkar Awas Yojana (VAMBAY).

Further, bodies like the National Housing Bank (NHB) and

Housing & Urban Development Corporation (HUDCO) had

also been created to facilitate the implementation of such

policies. Key highlights of major policies are given below:

1. NATIONAL URBAN HOUSING AND HABITAT POLICY

(NUHHP) in 2007 was the first policy specific to urban

housing. The Policy focused on promoting various types

of public-private partnerships for realizing the goal of

“Affordable Housing for All” with special emphasis on the

urban poor. Given the magnitude of the housing shortage

and budgetary constraints of both the Central and State

Governments, the policy focused to promote various

types of partnerships between public, private,

cooperative and the institutional sectors in order to attain

the objectives.

In order to develop a sustainable and implementable

Housing and Habitat Policy, Ministry of HUPA has set the

process of developing the National Urban Housing &

Habitat Policy (NUHHP) 2017 to reflect the changes in the

recent past and taking forward the agenda of

Government of India on “Housing for All” by 2022.

Following this policy, many programmes as mentioned


below specific to affordable housing have since been

incorporated.

2. JAWAHARLAL NEHRU NATIONAL URBAN RENEWAL

MISSION (JNNURM): The JNNURM was launched and

implemented by Ministry of Housing and Urban Poverty

Alleviation (MoHUPA) in 2005. It aimed to construct 1.5

Million houses for the urban poor in the mission period

(2005-2012) in the 65 mission cities. It has two

components –

• Basic Services for Urban poor (BSUP) and

• Integrated Housing and Slum Development

Programme (IHSDP)

These aimed at integrated development of slums through

projects for providing shelter, basic services and other

related civic amenities with a view to providing utilities to

the urban poor. 65 Mission Cities identified based on

urban population (Census 2001), cultural and tourist

importance were covered under BSUP and the 887 cities

were covered under IHSDP.

Further, under BSUP, project cost is shared in the ratio of

50:50 for cities with population more than 1 million (as

per Census 2001), 80:20 for other smaller Mission Cities

and 90:10 for North Eastern and Special category States.

Under IHSDP, project cost is shared in the ratio of 80:20

for remaining smaller cities and 90:10 for North Eastern

and Special Category States.

Mission duration was 7 years from 2005-06 which has

been extended up to 31st March, 2017 for completion of

ongoing work only in projects sanctioned up to 31st

March, 2012.

Progress of JNNURM: As on 31.12.2016, under BSUP,

62 select cities in the country are covered, whereas 877

cities are covered under IHSDP.

Out of 12,40,968 houses approved, 10,55,549 houses

have been constructed of which 8,85,873 houses have

been occupied by the beneficiaries and 1,58,977 DUs are

presently under progress. Central share of INR 17,906.69

crore has been disbursed to States/ UTs for the projects

under JNNURM (BSUP & IHSDP).

With this, RAY and other previous schemes (AHP and

RRY) were discontinued by the competent authority.

The mission - Pradhan Mantri Awas Yojana – Housing for

All (Urban) was launched by Central Government to

achieve the objective of providing every family a pucca

house with water connection, toilet facilities, 24x7

electricity supply and access. The mission will be

implemented during 2015-2022 and it will provide central

assistance to implementing agencies through States and

UTs for providing houses to all eligible families/

beneficiaries by 2022. All statutory towns as per Census

2011 and towns notified subsequently would be eligible

for coverage under the Mission.

Definitions for the purpose of the mission:

• Affordable Housing Project: Housing projects where

35% of the houses are constructed for EWS category

• Beneficiary: A beneficiary family will comprise

husband, wife and unmarried children. The beneficiary

family should not own a pucca house (an all weather

dwelling unit) either in his/her name or in the name of

any member of his/her family in any part of India

• Economically Weaker Section (EWS): EWS

households are defined as households having an

annual income up to INR 300,000 (Rupees Three

Lakhs). States/UTs shall have the flexibility to redefine

the annual income criteria as per local conditions in

consultation with the Centre.

• EWS House: An all weather single unit or a unit in a

multi-storeyed super structure having carpet area of

upto 30 sq.m with adequate basic civic services and

infrastructure services like toilet, water, electricity etc.

States can determine the area of EWS as per their

local needs with information to Ministry

• Low Income Group (LIG): LIG households are

defined as households having an annual income

between INR 300,001 up to INR 600,000. States/UTs

shall have the flexibility to redefine the annual income

criteria as per local conditions in consultation with the

Centre.

• Slum: A compact area of at least 300 population or

about 60-70 households of poorly built congested

tenements, in unhygienic environment usually with

inadequate infrastructure and lacking in proper

sanitary and drinking water facilities.

It seeks to address the housing requirement of urban

poor including slum dwellers through following

programme verticals:


Details

No. of ProjectsTotal Project CostNo. of DUs

BSUP

478 ongoing projectsINR 23,126.00 crore7,88,969

IHSDP

1030INR 9,591.65 crore4,51,999

3. RAJIV AWAS YOJANA (RAY): This programme aimed at

creating a slum free India by providing affordable housing

to the urban poor. It was launched in 2011 in two phases.

The “preparatory phase” ended in 2013. The

“implementation phase” was sanctioned for action from

2013 to 2022. The two major objectives of RAY can be

summed up as follows:

• Legal recognition of slums (notified or non-notified)

and bringing them into the formal system

• Redress the failures of the formal system

RAY focused to provide financial support to implementing

agencies including States/UTs/Urban Local Bodies

(ULBs)/Central Government Agencies, for providing

housing and improvement of basic civic infrastructure

and social amenities in each selected slums. The

schemes of Affordable Housing in Partnership (AHP) and

Interest Subsidy for Housing the Urban Poor (ISHUP)

were merged into this scheme.

AHP scheme aimed to encourage private sector

participation in creation of affordable housing stock,

recognizing that mere efforts of the Government would be

insufficient to address the housing shortage. It was earlier

introduced in 2009 as part of BSUP component of

JNNURM and subsequently, was dovetailed with RAY.

ISHUP / Rajiv Rinn Yojana (RRY) is an instrument to

address the housing needs of the EWS/LIG segments in

urban areas, through enhanced credit flow. It provides

interest subsidy of 5% (500 basis points) on loans

granted to EWS and LIG categories to construct their

houses or extend the existing ones. Upper limit of loan

amount is INR 5 lakh for EWS and INR 8 lakh for LIG;

interest subsidy would, however, be limited to the first

INR 5 lakh of the loan amount, in case the loan exceeds

this amount.

Progress of RAY projects: As on 31.01.2017, a total of

162 projects with a total project cost of INR 6,323.04

crore involving Central Share INR 3465.91 crore for

construction/upgradation of 1,17,707 DUs have been

approved and INR 2,141.28 crore has been released.

During the period April 2016 to December 2016, 13,881

DUs were completed and 9,940 were occupied.

On May 2015, RAY was rolled over into the Housing for

All (HFA) by 2022 policy.

4. PRADHAN MANTRI AWAS YOJANA – HOUSING FOR

ALL (URBAN): In 2015, the Ministry of Housing & Urban

Poverty Alleviation launched a new mission “Housing for

All” by 2022 for urban areas with comprehensive scope.

"In-situ"

Slum Redevelopment

Affordable Housing

through Credit Linked

Subsidy

Affordable Housing

in Partnership

Subsidy for beneficiary-led

individual house construction

or enhancement

• Using land as a resource

• With private participation

• Extra FSI/ TDR/ FAR if

required to make projects

financially viable

• Interest subvention subsidy

for EWS and LIG for new

house or incremental

housing

• EWS: Annual Household

Income up to INR 3 lakh

and house sizes up to

30 sq.m

• LIG: Annual Household

Income between INR3-6

lakhs and house sizes up to

60 sq.m

• With private sector or public

sector including Parastatal

agencies

• Central Assistance per EWS

house in affordable housing

projects where 35% of

constructed houses are for

EWS category

• For individuals of EWS

category requiring

individual house

• State to prepare a separate

project for such

beneficiaries

• No isolated/ splintered

beneficiary to be covered

“In-situ” Slum Redevelopment using land as a resource

This approach aims to leverage the locked potential of

land under slums to provide houses to the eligible slum

dwellers bringing them into the formal urban settlement.

Slums, whether on Central Government land/State

Government land/ULB land, Private Land, should be

taken up for “in-situ” redevelopment for providing houses

to all eligible slum dwellers. Slums so redeveloped should

13


compulsorily be denotified.

Private partner for Slum Redevelopment would be

selected through open bidding process. State

Governments and cities would, if required, provide

additional Floor Area Ratio (FAR)/Floor Space Index

(FSI)/Transferable Development Rights (TDR) for making

slum redevelopment projects financially viable. Slum

rehabilitation grant of INR 1 lakh per house, on an

average, would be admissible for all houses built for

eligible slum dwellers in all such projects.

“In-situ” redevelopment of slums on private owned lands

for providing houses to eligible slum dwellers can be

incentivised by State Governments/UTs or ULBs by

giving additional FSI/FAR or TDR to land owner as per its

policy. Central assistance cannot be used in such cases.

Credit-Linked Subsidy Scheme

The Mission, in order to expand institutional credit flow to

the housing needs of urban poor will implement credit

linked subsidy component as a demand side intervention.

Credit linked subsidy will be provided on home loans

taken by eligible urban poor (EWS/LIG) for acquisition,

construction of house.

Beneficiaries of Economically Weaker section (EWS) and

Low Income Group (LIG) seeking housing loans from

Banks, Housing Finance Companies and other such

institutions would be eligible for an interest subsidy at the

rate of 6.5 % for a tenure of 20 years or during tenure of

loan whichever is lower. The Net Present Value (NPV) of

the interest subsidy will be calculated at a discount rate

of 9 %.

The credit linked subsidy will be available only for loan

amounts upto INR 6 lakhs and additional loans beyond

INR 6 lakhs, if any, will be at nonsubsidized rate. Interest

subsidy will be credited upfront to the loan account of

beneficiaries through lending institutions resulting in

reduced effective housing loan and Equated Monthly

Installment (EMI).

Credit linked subsidy would be available for housing

loans availed for new construction and addition of rooms,

kitchen, toilet etc. to existing dwellings as incremental

housing. The carpet area of houses being constructed or

enhanced under this component of the mission should be

upto 30 sq.m and 60 sq.m for EWS and LIG, respectively

in order to avail of this credit linked subsidy. The

beneficiary, at his/her discretion, can build a house of

larger area but interest subvention would be limited to

first INR 6 lakh only.

As per the latest programme under the 'Pradhan Mantri

Awas Yojana', households having an annual income of

less than INR 18 lakh would be eligible for three per cent

interest subsidy for loans up to INR 12 lakh and four per

cent interest subsidy for up to INR 9 lakh for annual

house hold income of INR 12 lakh, respectively. This

increases the affordability for a buyer and provides an

incentive to buy a house.

Housing and Urban Development Corporation (HUDCO)

and National Housing Bank (NHB) have been identified as

Central Nodal Agencies (CNAs) to channelize this subsidy

to the lending institutions and for monitoring the progress

of this component. Ministry may notify other institutions

as CNA in future.

Affordable Housing in Partnership

On supply side intervention, this mission will provide

financial assistance to EWS houses being built with

different partnerships by States/UTs/Cities. To increase

availability of houses for EWS category at an affordable

rate, States/UTs, either through its agencies or in

partnership with private sector including industries, can

plan affordable housing projects. Central Assistance at

the rate of INR 1.5 Lakh per EWS house would be

available for all EWS houses in such projects.

The States/UTs would decide on an upper ceiling on the

sale price of EWS houses in rupees per square meter of

carpet area in such projects with an objective to make

them affordable and accessible to the intended

beneficiaries. For that purpose, State and cities may

extend other concessions such as their State subsidy,

land at affordable cost, stamp duty exemption etc.

Beneficiary-led individual house construction or

enhancement

The fourth component of the mission is assistance to

individual eligible families belonging to EWS categories to

either construct new houses or enhance existing houses

on their own to cover the beneficiaries, who are not able

to take advantage of other components of the mission.

Such families may avail of central assistance of INR 1.50

lakhs for construction of new houses or for enhancement

of existing houses under the mission.

Progress of the scheme: As on 31.12.2016, 34 MoAs

have been signed with 29 States and 5 UTs; 3,888 cities

have been selected in 34 States/UTs for inclusion under

the Mission. 3031 projects for construction of 14,01,097

houses of EWS category in 1,792 cities of 29 States/UTs

involving central assistance of INR 20,724.61 crore have

been accepted by Government under the Mission.

Central assistance of INR 4,686.82 crore as part of 1st

installment has been released to the concerned States

against approved projects

5. FOREIGN DIRECT INVESTMENT ( FDI ) POLICY ,

PRESS NOTE 10 – In 2014 Ministry of Commerce and

Industry had Released a consolidated press note in

construction sector with relaxation of two major

conditions 'Minimum Built-up area' and 'Capital

Requirement' which was envisaged to boost the

affordable housing development.

Union Budget 2017-18: In Feb 2017, the Central

Government made following announcements which shall

provide further impetus to the affordable housing

projects.

Major policy announcements:

• Infrastructure status has been accorded to the

affordable housing projects

• Rural housing expenditure increased from INR 15,000

crore to INR 23,000 crore, under Pradhan Mantri Awas

Yojana (Gramin)

• Over one crore houses to be built for the homeless in

rural areas by 2019

• The National Housing Bank (NHB) would refinance

individual housing loans of about INR 20,000 crore in

FY2017–18

• Allocation to infrastructure sector is at a record high of

INR 3.96 lakh crore for FY2017–18, an increase of

over 38 per cent over the previous fiscal year

• Extension of tenure of loans under Credit Linked

Subsidy Scheme (CLSS) of PMAY to 20 years from 15

years and introduction of a new CLSS for middle

income group with a provision of INR 1,000 crore in

2017-18

Granting of infrastructure status to affordable housing is

likely to provide impetus to the government's mission of

'Housing for All by 2022'. With the infrastructure status,

the developers shall have access to cheaper funding by

way of debt which would result in reduction of overall

cost of homes to the buyer. Further, this would see a

likely increase in participation from domestic and foreign

players in the affordable housing sector.

Key direct tax proposals

Certain conditions for claiming 100 per cent profit linked

deduction by a developer of affordable housing projects

as introduced by Finance Act 2016 has been relaxed as

under:

• With respect to eligibility limits of 30 sq.m and 60

sq.m – built-up area has been substituted by carpet

area as defined under Section 2(k) of Section 2 of the

Real Estate (Regulation and Development) Act, 2016;

• Time limit for completion of a project extended from

three years to five years from the date of approval by

the competent authority;

• Limitation on size of residential unit of 30 sq.m shall

be applicable only to four metro cities (Chennai, Delhi,

Kolkata and Mumbai) and shall not apply to a place

located within 25 km from the municipal limits of such

four metro cities.

• Tenure for applicability of Long term capital gain on

house sale has been reduced from three years to two

years

• Capital gain tax liability is applicable only after

completion of project

The proposal of the government to relax the size

requirement for residential units from built-up area to

carpet area would enable the real estate developers

expand customer base and also claim tax deduction

Further, the government's proposal to increase the time

limit allowed for completion of the project from three

years to five years would expand the number of projects

eligible for tax incentives. Modified capital gain tax

liability clause would attract land owners to venture into

JV development

EVALUATION OF HOUSING POLICIES

The impact of the various programs/policies on the

condition of housing in India since independence has

been limited. An overall assessment of the housing stock

in the country, in conjunction with budgetary allocations,

indicates that, while most of these programs were well

intended in terms of their objectives, they could not

deliver much due to the lack of financial resources.

Dependency on the central government for funds

encouraged a top–down approach, with the programs

being formulated at the national level on the basis of

feedback from the states, with marginal inputs from the

operational agencies and staff directly working at the

grassroots level. Further, multiplicity of programs with

varying components directed at the same target group

and lack of convergence or proper coordination,

sequencing, and linkages among them further added to

the hindrance. The programs also lacked public

participation in their planning and implementation.



Proposed Models for Affordable Housing:

Model 1: Private Developer on Private Land - Under this

model, three modes of private development are proposed:

• The first mode refers to the mandatory provision of ear-

marking either 10% of the total built up area or 25% of

total number of units, in all Group Housing and Group

Development Scheme Projects, whose land extent is

more than 5 acres.

• The second mode of private development refers to group

housing schemes aligned to requirements of the AHP

Scheme of GoI, with minimum 250 dwelling units. The

DUs would be a mix of EWS/LIG/Higher

Categories/Commercial of which at least 60% of the FAR/

FSI will be used for dwelling units of carpet area of not

more than 60 sq.m, in addition 35% of the total number

of dwelling units constructed should be for EWS/ LIG I

category.

• The third mode of private development refers to

construction of affordable housing units by the private

developer as a stand- alone affordable housing project or

as a mix with other MIG/ HIG units with no conditions on

number of units, pricing, size specifications, income

eligibility etc, aligned to open market.

Model 2: Private Developer on Government Land:

• Government land / ULB land would be identified for

allotment to developers for construction of

EWS/LIG/MIG/HIG flats through an open and transparent

bidding process.

• Developer offering maximum built-up for EWS/LIG-I, LIG-

II type of affordable houses to be surrendered free of cost

to the concerned authority will be selected.

• Government land shall be allotted free of cost to the

selected developer for construction of the housing

scheme on a 99 years transferrable lease basis.

• The Government land allotted shall be free of all

encumbrances, with all relevant clearances in place such

as land use conversion etc.

Model 3: Government led Development:

• All APHB/ UDA/ MC/ Municipalities/ Other Statutory

Bodies housing schemes for affordable housing shall

earmark at least 60% of the FAR/ FSI for affordable

housing units of carpet area of not more than 60 sq.m, in

addition 35% of the total number of dwelling units

constructed should be for EWS/ LIG I category.

• Another 20% of the houses to be constructed in the MIG

category.

• Government land shall be allotted on priority basis for

affordable housing projects in the state.

• The contractor/ developer for implementation of the

project shall be done through open tendering process.

• The Government land allotted for implementation of the

project shall be free from all encumbrances, with all

relevant clearances in place such as land use conversion

etc.


STATE POLICIES

• To promote investments in affordable housing in AP

through PPP and attract private developers Private

developers in the construction of EWS/LIG categories of

houses by offering various attractive incentives

• To create affordable rental housing for migrant workers

and other urban poor

• To dovetail with existing Central and State Government

schemes2 and other bilateral/multilateral assistance

programmes

• To promote innovations in environmentally sustainable,

low- cost building design and construction technology

Objectives:

• To address the housing shortage in AP for all sections of

the society with special emphasis on EWS, LIG, and MIG

categories in a time bound manner

• To undertake large scale construction of Affordable

Housing (with focus on EWS & LIG housing) by

dovetailing with existing Government of India schemes

and other bilateral/multilateral assistance programmes

• To make housing “liveable and affordable” for EWS/ LIG

categories by prescribing standards for unit cost, size,

specifications and planning norms under the policy

The following section provides highlights – definition / key parameters and models proposed for affordable housing projects in

3 states of India – Andhra Pradesh, Rajasthan and Karnataka.

ANDHRA PRADESH (AP) – THE ANDHRA PRADESH URBAN

DEVELOPMENT MISSION (APUDM)

Parameters for Affordable Housing:

Parameters Affordable Housing

MIG

EWS LIG I LIG II

Carpet Area (sq. m) 21-27 28 -40 41 -60 61 -80 Permissible Height Shall not exceed 15 m (Cellar and / or Stilt

as applicable + maximum up to 5 floors)

High rise permissible

Maximum selling price per unit (inc. cost of construction for super built-up area (30% over carpet area) but will not include maintenance deposit, registration and insurance)

INR 2.9-4.0

lakhs

INR 3.9-6.5

lakhs

INR 8.6-13

lakhs

INR 16.3-22

lakhs

Annual Family Income

Upto INR 1

lakhs

INR 1-2

lakhs

INR 2-5

lakhs

Above INR

5 lakhs

To achieve the objectives, the state has adopted a two pronged strategy:

Demand Side Interventions – Capital & Interest Subsidies

• Alignment of proposed housing scheme to Central guidelines to

access maximum subsidies for beneficiaries from the Centre

• Information regarding all central and state government subsidy

schemes would be made available through a single unified online

portal. All application and sanction of Centre/ State subsidy will be

routed and monitored through this online portal

Supply Side Interventions – Ensuring land bank availability

• Reservation of 10% residential land in development plans of new

urban areas

• Mandatory provision of marking either 10% of the total built up area

or 25% of total number of units, in all Group Development Scheme

Projects over plot size greater than 5 acres

• Creation and management of Land Bank for affordable housing by

taking stock of available government land

• Incentivise land - owners to opt for land - pooling for implementing

group housing schemes over plot size of 5 acres and more, by

allowing mixed development scheme inc. high rise for free- sale

residential and commercial components

RAJASTHAN – CHIEF MINISTER'S JAN AVAS YOJNA - 2015

Objectives:

• To achieve the objective of Affordable Housing for All by

creation of EWS/LIG housing stock to fulfill housing

shortage in the State.

• To attract private investment for construction of houses

for EWS/LIG segment of the society, by giving incentives

to the private developers.

• To motivate govt. agencies and private developers to take

up construction of Affordable Housing.

• To identify land for affordable housing which can be

monetized by inviting private participation on a large

scale.

• To expedite the process of construction, developers shall

be facilitated by fast track approvals.



Proposed Models & Parameters for Affordable Housing:

Provision 1A: Mandatory Provisions for Residential Schemes of ULBs/UITs/Development Authorities/RHB and Private Developers

Minimum required area

Land distribution for

EWS/LIG category

Sale Price

FAR

2 Hectare for Plotted development schemes and 5000 sq.m for Flat development

schemes

• For Rajasthan Housing Board (RHB) - 50% houses in case of plotted development

and 10% of FAR in case of flat development are to be reserved for EWS/LIG units.

• For UITs / Development Authorities / ULBs 25% of scheme area shall be reserved

for Plots/Flats for EWS/LIG category as the case may be.

• For Private Developers -

– Flat construction - 7.5% of proposed residential FAR area shall be reserved for

EWS/LIG units.

– Plotted development - 10% of residential saleable area to be reserved for EWS/LIG

plots with plot area of 30 to 45 sq.m and above 45 up to 75 sq.m respectively

Sale Price for flats shall be INR 1200/ sq.ft (Including INR 50 / sq.ft for maintenance

funds and INR 50/ sq.ft for EDC to ULB) for both EWS and LIG Units, out of which INR

1100/ sq.ft shall be paid to developer. In case of plots 25% of reserve price and 60% of

reserve price for EWS/LIG plots respectively.

The FAR proposed for EWS/LIG shall not be counted in the FAR calculation of main

project even if EWS/LIG units are provided on split location. As incentive in such

projects, standard FAR without betterment levy shall be increased by 0.50 over and

above standard FAR. Maximum FAR shall be as per building byelaws.

Provision 1B: Mandatory Provisions for the proposed industrial Areas of RIICO and Private Developers



EWS/LIG category

Sale Price

FAR

2 Hectare

5% of saleable area in new industrial schemes shall be reserved for EWS/LIG Housing.

Saleable area to be reserved for EWS/LIG plots with plot area of 30 to 45 sq.m and

above 45 up to 75 sq.m respectively

25% of reserve price and 60% of reserve price for EWS/LIG plots respectively.

As per building byelaws

Provision 2: Development of Affordable Houses by Private Developer on Private Land in Partnership



EWS/LIG category

Sale Price

FAR

2 Hectare

Minimum 50% of land proposed on the project for EWS/LIG and remaining 50% may

be used for residential development.

Sale Price shall be INR 1200/ sq.ft (Including INR 50/ sq.ft for maintenance funds and

INR 50/ sq.ft for EDC to ULB) for both EWS and LIG Units, out of which INR 1100/ sq.ft.

shall be paid to developer.

Up to 2.25 without betterment levy for the complete project including FAR consumed

for EWS/LIG

Provision 3A: Mandatory Provisions for Residential Schemes of ULBs/UITs/Development Authorities/RHB and Private Developers


Land distribution for EWS/LIG category

Sale Price

FAR

1 Hectare

100% for EWS/LIG

To be decided by the developer.

Maximum FAR 2.25 plus incentive FAR on additional height. (FAR including incentive

FAR up to 2.25 will be allowed without betterment levy however betterment levy will

be charged on FAR proposed above 2.25).

Provision 3B: Development of EWS/LIG houses by Private Developer on whole of Private Land (Plotted development with G+3 format)



EWS/LIG category

Sale Price

FAR

1 Hectare

100% of total land area to be reserved for EWS/LIG. Maximum saleable area up to

70%. Minimum of 5% of the scheme area shall be reserved for park/green spaces

and 5% for facilities.

To be decided by the developer.

Not applicable

Provision 4A: (i) Affordable Housing on Government Land by Private Developer in 75:25 ratio on G+3 format.

(ii) Affordable Housing on Government Land by Private Developer in 75:25 ratio on multistoried format



EWS/LIG category

Sale Price

FAR

1 Hectare

The developer would take up development of total land however construction of

EWS/LIG shall be on minimum of 75% of the total land. Developer shall be free to

construct MIG-B/HIG flats/plots/houses (high rise permitted) on remaining maximum

of 25% of total land.


INR 150/ sq.ft for ULB) for both EWS and LIG Units, out of which maximum INR

1000/ sq.ft shall be paid to developer depending on the bid.

Minimum 140 units per acre and maximum up to 2.25 FAR (without betterment levy)

shall be constructed on EWS/LIG component of scheme. For remaining part of the

scheme as per prevailing building byelaws.



Provision 4B: Provision 4B is construction of EWS/LIG units in the ratio prescribed on the basis of population of the city.

In this provision component of land other than EWS/LIG would be auctioned through open bidding. Provision 4B (i)

is applicable for the cities with population of 3 lakhs and above, Provision 4B (ii) is applicable for the cities with

population 1 - 3 lakhs and Provision 4B (iii) is for the cities below 1 lakh population



EWS/LIG category

Sale Price

FAR

1 Hectare

The developer would take up development of total land however construction of

EWS/LIG units shall be on minimum of 75% in Towns with 3 lakhs and above

population, 60% in Town with 1 lakhs and above up to 3 lakhs population and 50% in

Towns with less than 1 lakh population of the total land. Developer shall be free to

construct MIG-B/HIG flats/plots/houses (high rise permitted) on remaining maximum of

25%, 40% and 50% of total land respectively.


INR 150/ sq.ft for ULB) for both EWS and LIG Units, out of which maximum INR 1100/

sq.ft shall be paid to developer depending on the bid.

Minimum 140 units per acre and maximum up to 2.25 FAR (without betterment levy)

shall be constructed on EWS/LIG component of scheme. For remaining part of the

scheme as per prevailing building byelaws.

Provision 4C: Development of Affordable Housing Projects in Joint Development Agreement



EWS/LIG category

Sale Price

FAR

10 Hectare

The developer would take up development of total land as per stipulated FAR however

construction of EWS/LIG shall be of minimum of 35% FAR of the total project.

Developer shall be free to construct MIGB/HIG flats/plots/houses (high rise permitted)

on the remaining area.


INR 150/ sq.ft for ULB) for both EWS and LIG Units.

As per prevailing building byelaws.

Annual Income for EWS/LIG Categories:

• EWS – Upto INR 150,000 per year

• LIG – INR 150,000-300,000 per year

Unit area of EWS/LIG houses/plots: Super built up area for EWS/LIG units shall be (In all cases)

• EWS unit: 325-350 sq.ft (carpet area should not be more than 30 sq.m), plot area 30-45 sq.m

• LIG unit: 500-550 sq.ft (carpet area should not be more than 60 sq.m), plot area above 45 sq.m upto 75 sq.m

KARNATAKA – KARNATAKA AFFORDABLE HOUSING POLICY (KAHP) 2016

Objectives:

• To improve existing housing for BPL/EWS/LIG households

and build affordable housing stock to cater to the need of

future residents

• To create effective partnerships between the local, state

and central governments by aligning existing housing

schemes across them

• To work with poor urban households and communities in

order to enable sustainable implementation and outcomes

• To build effective partnerships with Private Developers to

accelerate the supply of affordable housing

Model 1:

Beneficiary Led House

Enhancement

To improve Kutcha housing, households require support to undertake incremental

additions, enhancements or make their house Pukka. Households must own the land

on which their house is located. In this model, a grant of INR 1.5 lakh will be availed

under provisions of the PMAY for beneficiaries living in Kutcha houses. Any remaining

cost of the house shall be borne by the beneficiary household.

This model supports households presently living in Kutcha houses that cannot be

enhanced or made Pukka, avail direct financial support in order to make a new Pukka

house. Households must own the land on which they intend to build the house.

Financial assistance of INR 1.5 lakhs under PMAY may be availed.

For households that do not avail financial assistance under the PMAY Beneficiary Led

House Construction vertical, the government may also facilitate subsidized loans for

beneficiaries of up to INR 6 lakhs with interest subsidy of 6.5 per cent from PMAY

Credit Linked Subsidy Scheme (CLSS).

To improve living conditions of households residing in slum areas, the Policy envisages

that the state government will provide budgetary support to concerned departments to

provide or upgrade site level basic services i.e. water and sanitation, drainage, roads,

street lighting, footpaths and community facilities. The government will accord priority

to existing tenable slums under this model and endeavour to extend this model to non-

slum areas including Unplanned and Unorganized colonies if all applicability and

eligibility clauses under this Policy are satisfied. This model can be used in

combination with Models 1 and 2 to enable incremental or new construction of

individual houses.

To encourage vertical redevelopment of slums in urban areas that face scarcity of land

and where majority of the housing is Kutcha, In- Situ Redevelopment model may be

implemented. Redevelopment includes demolishing all existing built structures in the

slum and building new housing and infrastructure for the existing households on the

same site. The Government may provide assistance in following manner:

- financial assistance under the PMAY

- FAR and TDR incentives to Private Developers

- adequate budgetary allocations to Public Development Agencies (PDAs) fast track

clearances and exemption from identified regulatory charges to such projects

Model 2:

Beneficiary Led New

House Construction

Model 3:

In-Situ Up gradation

Model 4:

In-Situ Slum Redevelopment



Model 5:

Plotted Development and

Sites with House and Services

The Government will enable reservation for Affordable Housing Units (AHU) in sites in

Plotted Development projects undertaken by Private Developers and PDAs. The

Government shall provide TDR incentives to Private Developers for the earmarked

portions of their sites. The Government will facilitate access to credit for beneficiaries

that are allotted sites under this model through the PMAY Credit Linked Subsidy

Scheme (CLSS).

- Private Developers: Reservation will be mandated for all projects of project area of

1 hectare or more. 10 per cent of the residential portion of the project site shall be

reserved for AHUs

- PDAs: Reservation will be mandated for all projects of project area of 1 hectare or

more. 35 per cent of the Residential portion of the project area shall be reserved for

AHUs.

- Joint Venture: Private Developers may enter into a Joint venture agreement with

PDAs by reserving at least 25 per cent of the Residential portion of the site for

AHUs

In order to increase build new affordable housing units at large scale, the Government

will enable reservation for AHUs in the built-up area in Group Housing (apartments) and

Township (mixed use) projects constructed by Private Developers and PDAs.

Reservation shall be mandated for all projects of project area of 1 hectare or more.

Other details are as follows:

Model 6:

Group Housing and

Township Projects

Details

Reservation for AHUs:

Township –

Group Housing –

Private Developers

10 per cent of the

residential portion of the

site

10 per cent of the built-up

area

PDAs

33 per cent of the

residential portion of the

site

33 per cent of the built-up

area

FAR:

Township –

Group Housing –

Extra FAR equivalent to the built-up area that would be

available from the portion of the site reserved for AHUs as

per Zoning Regulations

Extra FAR to the extent of the built-up area of the AHUs

The Government will support PDAs to avail central financial assistance of up to INR 1.5

lakhs through the Affordable Housing in Partnership vertical of the PMAY if at least 35

per cent of the houses in the project are for EWS category (as per PMAY) and a single

project has at least 250 houses.

Model 7:

Affordable Group Housing

in Partnership

In order to encourage public-private partnerships in building new affordable housing

units, PDAs shall enter into partnerships with Private Developers on their land or on

identified vacant government land. The Government will provide FAR and TDR

incentives to Private Developers for undertaking projects under this model. The

Government will also facilitate fast track clearances and exemption from identified

regulatory charges to such projects.

Partnership with private developers on

their land

Partnership with private developers on

vacant government land

- Projects with land area of 1 hectare or

more will be eligible for this model

- Private Developers can develop AHUs

in a proportion of their land over and

above the mandatory reservation as

per Model 6.

- Developers will get additional FAR

equivalent to the built-up areas of the

AHUs. This FAR has to be consumed

on the same site.

- Financial assistance of up to INR 1.5

lakhs per house under the Affordable

Housing in Partnership vertical of the

PMAY

- Private Developers can develop

AHUs on at least 40 per cent of

identified vacant government land.

Remaining portion of the land may be

transferred to the developer with full

use rights as per the local zoning

regulations

- The Government will support PDAs to

avail central financial assistance of up

to INR 1.5 lakhs through the

Affordable Housing in Partnership

vertical of the PMAY if at least 35 per

cent of the houses in the project are

for EWS category (as per PMAY) and

a single project has at least 250

houses

Annual Income for EWS/LIG Categories:

• EWS – INR 87,600-150,000 per year

• LIG – INR 150,000-300,000 per yearUnit area of EWS/LIG houses/plots: Super built up area for EWS/LIG units shall be

(In all cases)

Housing Unit

For improved existing housing under Models 1 & 3

New housing – plotted development under Model 5

New housing – site with house services under Models 2 & 5

New housing – Group Housing under Models 4,6 & 7

Area norms for Affordable Housing Units

Size Range

Minimum 15 sq.m carpet area

25-100 sq.m

Minimum 25 sq.m plot with a single room, toilet & bathroom

of total 15 sq.m carpet area

30-60 sq.m carpet area


URBANIZATION IN TAMIL NADU

Urbanization in the state has been on the increase since

1901. With more than 48% of urban population, Tamil Nadu

is one of the most urbanized states in the country. Tamil

Nadu ranks first among the large states in the country and

third in absolute terms on share of urban population in total

population of the State. While the percentage of urban

population in the country increased from 10.29% to 31.2%

during 1911-2011, Tamil Nadu registered a much higher

percentage increase i.e., from 15.07% to 48.5% during the

above period.

The figures below show the urbanization trend in Tamil Nadu

and India:


TAMIL NADUSTATE OVERVIEW

Tamil Nadu - State Snapshot

Land Area 130,058 sq.km

Population (Census 2011) 72,147,030

Population Density 555 persons per

sq.km

Sex Ratio (Females per 1000 Males) 995

Literacy Rate 80.09%

Decadal Population Growth (2001-2011) 15.60%

State GDP at current prices (2013-14) INR 85,423,816

lakhs

Per Capita Income at current prices INR 112,664

Source: tn.gov.in, Census India, Knight Frank Research

It is the eleventh-largest state in India by area and the sixth-

most populous. According to Census 2011, the population

of India is around 1210 mn and that of Tamil Nadu is 72 mn

thus, accounting for approximately 6% of country's total

population. Further, the state has higher proportion of urban

population at about 48% as compared to national average

of 31%.

The map below shows the growth of urban

population across Tamil Nadu:

Source: Census 2011


MAJOR URBAN CENTERS

The state comprises 32 urban centers and the chart below

shows population (Census 2011) of all the centers.


Eight cities – Chennai, Coimbatore, Madurai, Tiruchirappalli,

Tiruppur, Salem, Erode and Tirunelveli contribute more than

75% of the total population of all the urban centers.

SEC CLASSIFICATION & INCOME PROFILE

SEC Definition:

SEC

A1a

A2

B1/ B2

C

D

E

Education

Graduate & Post

Graduates (General &

Professional)

Graduate & Post

Graduates (General &

Professional)

SSC + < Grad

Schooling 5 – 9 years

Schooling upto 4

years

Illiterate

Occupation

SEP / Officer & Execs

(Senior and Middle level)

Shop Owners, Supervisor

level, Officers & Execs

(Junior Level)

Skilled Workers, Petty

Traders, Clerk, Sales man

Skilled / Unskilled

Workers, Petty Traders,

clerk

Socio-economic Classification - SEC profile of the state

considering urban households across the districts shows

that majority of the households (44%) come under SEC D &

E category.

The proportion of urban households in SEC A, B, C, D & E in

total for the eight urban centers of Chennai, Coimbatore,

Madurai, Tiruchirappalli, Tiruppur, Salem, Erode and

Tirunelveli remains same as for the overall state.

The table below gives details regarding proportion of urban

households in each SEC category for each city

Proportion

of Urban

Households

Chennai

Coimbatore

Madurai

Tiruchirappalli

Tiruppur

Salem

Erode

Tirunelveli

SEC A

12%

8%

8%

9%

8%

5%

5%

5%

SEC B

19%

17%

17%

17%

17%

14%

14%

14%

SEC C

31%

35%

34%

32%

34%

30%

30%

30%

SEC D&E

38%

41%

41%

42%

41%

52%

52%

52%

Source: Indicus Market Skyline 2013-14, Knight Frank Research

Annual Income profile of the state considering urban

households across the districts shows that majority of the

households (40%) come under income bracket of less than

INR 75,000.

The proportion of urban households in various income

brackets in total for the eight urban centers of Chennai,

Coimbatore, Madurai, Tiruchirappalli, Tiruppur, Salem, Erode

and Tirunelveli remains fairly same as for the overall state.

As analyzed from the income profile of the cities, about 70%

of the urban households come under less than INR 300,000

annual income. It can therefore be inferred that significant

population falls under EWS and LIG segment as per

definition under PMAY

The table below gives details regarding proportion of urban

households in each bracket of annual household income for

each city:

Proportion

of Urban

Households

Chennai

Coimbatore

Erode

Madurai

Salem

Tiruchirappalli

Tirunelveli

Tiruppur

< INR

75,000

26%

35%

44%

42%

49%

37%

51%

39%

INR

75,001-

150,000

16%

17%

19%

17%

17%

16%

17%

18%

INR

150,001-

300,000

15%

16%

15%

16%

13%

14%

15%

17%

INR

300,001-

500,000

11%

11%

9%

10%

8%

11%

8%

11%


INR

500,001-

1000,000

12%

0%

8%

8%

7%

12%

6%

9%

> INR

1000,000

20%

11%

6%

7%

6%

10%

4%

7%


While the urban population in Tamil Nadu has grown by 27%

between 2001 -2011, the slum population has grown from

28.38 lakh to approximately 59 lakh i.e, growth of 105%.

Hence, the rapid urbanization being witnessed by the State

reflects the economic growth achieved by the State and at

the same time the challenge of creating sustainable urban

infrastructure and need to cater to the growing housing

needs in the urban areas.

Tamil Nadu has the fifth most noteworthy housing shortage in

India estimated to 1.25 million out of nationwide housing

shortage 18.78 million. Housing shortage is majorly driven by

LIG and EWS Segments as majority of the development in

Tamil Nadu caters MIG and HIG.


HOUSING SCENARIO IN TAMIL NADU

The Hon'ble Chief Minister has announced the “Vision 2023”,

a long term plan for infrastructure development for rapid

economic growth in Tamil Nadu. This envisages, among

others, the provision of houses with basic infrastructure

facilities for all urban slum families in Tamil Nadu to make the

cities / towns slum free before 2023 at an estimated cost of

INR 65,000 crore. The programme is being implemented by

utilizing the grants from Government of India under various

programmes especially Pradhan Mantri Awas Yojana (PMAY),

State Government funding through budgetary support and by

availing loan by Tamil Nadu Slum Clearance Board from

various financial institutions.

TNSCB has been designated as the Mission Directorate for

'Housing for All' in Tamil Nadu and State Level Nodal Agency

(SLNA) for implementing housing projects under the verticals

of (i) “In-situ” Slum Redevelopment, (ii) Affordable Housing in

Partnership and (iii) Subsidy for Beneficiary-led Individual

House Construction under 'Housing for All' programme. A

memorandum of agreement has been entered between the

State Government and Government of India to implement the

'Housing for All' programme in Tamil Nadu.



INTRODUCTION

Chennai is the state capital and the most populous urban

centre in all of Tamil Nadu. Chennai, formerly known as

Madras, is India's fourth largest metropolitan city. Serving as

the gateway of the southern part of India, the city is located

along the 12-kilometre-long Marina Beach on the

Coromandel Coast of the Bay of Bengal. It forms the city's

east coast and is one of the longest beaches in the world.

The four National Highways lead to Kolkata (NH-5),

Bangalore (NH-4), Thiruvallur (NH-205) and Trichy (NH-45).

The NH-4 and NH-5 are a part of the golden quadrilateral

project. In addition to these, Arcot Road, Kamarajar Salai,

Thiruvottiyur High Road, Old Mahabalipuram Road and East

Coast Road are the other important radial roads in the

Chennai Metropolitan Area (CMA).

The central part of the city constitutes the old city areas of

Alwarpet, Boat Club Road, Kilpauk, Mylapore,

Nungambakkam, West Mambalam, etc. while North Chennai

constitutes the areas of Avadi, Ambattur, Padi, Perambur, and

Manali. In the south, the area comprises of Adyar, Besant

Nagar, OMR, Guindy, Tambaram, Velachery, etc. The western

part of the city comprises Anna Nagar, Koyambedu,

Mogappair, Porur and Ambattur.

Chennai has witnessed a great deal of industrial expansion in

recent times with the mushrooming of engineering plants,

automobile-assembly plants, educational institutions, textiles,

leather goods, chemicals, computers, granite, hardware and

shipping. The city is referred to as the 'Detroit of South Asia'

as it houses about 40 per cent of India's automobile industry.

It is also recognised as one of the country's important

destinations for software technological know-how, being a

major centre for IT and ITeS outsourcing

CITY OVERVIEW – CHENNAI

DEMOGRAPHIC PROFILE

The population of Chennai has grown from 7.04 mn in 2001

to 8.87 mn in 2011. The table shows the population trend in

the past:

Majority of the urban households in Chennai fall under SEC D

& E constituting of unskilled working population followed by

skilled workers and Graduates and post graduates

professionals

Year

1991

2001

2011

2017E


Population (no.)

5,818,000

7,041,000

8,871,000

10,190,031

Decadal Growth (%)

21.02

25.99

14.87

CONNECTIVITY

Road network of Chennai is dominated by Radial pattern

converging George Town, which Forms the Central Business

District (CBD) of The city for goods and passengers

movement, Assuming a pivotal role in development of the

city. As per CMDA Second Master Plan, the Chennai

Municipal Corporation is maintaining about 2,875 km of road,

of which 130 km are highway roads, 222 km are bus route

roads and 2475 km are interior roads and by lines with a per

capita road length of 0.6 m per capita

NH 4 - Bangalore

NH 45 - Trichy

Airport

ECR

OMR

Railway Stn.

Port

NH 5 - Kolkata

RESIDENTIAL MARKET OVERVIEW

Chennai residential market that had just begun to show some

promise of a recovery during H1 2017, once again broke new

lows in terms of sales and supply numbers during H2 2017.

Bogged down by the ongoing slowdown in the country in

addition to its own issues ranging from political uncertainty,

to the near catastrophic floods, the Chennai residential

market had been in a downward spiral over the past three

years. This lackluster demand scenario in addition to the

implementation of the Real Estate Regulation Act and the

GST Act spooked the already skittish developer's community

into a virtual stasis, which has caused a 33% year-on-year

(YoY) drop in H2 2017 residential supply levels, and pushed

down the annual supply number under 10,000 units for the

first time during this decade.

Both supply and sales for the Chennai residential market

came in at their lowest levels since 2011 in terms of yearly

and half-yearly numbers. The half yearly launches and

absorption represent an 86% and 56% drop, respectively,

from peak levels during H1 2011.

The comparatively affordable locations of South Chennai

saw the most development activity by far, as two third of the

unit launches during H2 2017 took place in locations such

as Pallavaram, Mahindra World City, SIPCOT – OMR Road,

Thalambur and Sholinganallur

Micro-

Markets

Central Chennai

West Chennai

South Chennai

North Chennai

Location

T Nagar, Nungambakkam,

Kodambakkam, Adyar, Kilpauk

Porur, Ambattur, Mogappair,

Iyyappanthangal, Sriperumbudur

Perumbakkam, Chrompet,

Sholinganallur, Guduvancheri,

Kelambakkam

Tondiarpet, Kolathur, Madhavaram,

Perambur

Demand has been largely consistent with the upcoming

supply as the south and west micro markets that contain the

relatively cheaper inventory have dominated the demand pie

consistently over the three Locations along the OMR and

GST roads in the southern micro markets far outstrip their

peers in other parts of the city in terms of buyer preference

as they offer the most appropriate mix of relatively affordable

housing, connectivity to workplaces and a reasonably well-

developed, social infrastructure.

Western locations such as Maduravoyal and Thiruverkadu

that had been experiencing increasing buyer interest in

recent periods saw some of that interest dwindle as prices

have fast approached those of locations in the south that

have comparatively better residential dynamics and will be

naturally preferred by buyers with comparable budgets.



INCOME SEGMENT ANALYSIS

Based on Indicus data 2013 – 2014, majority of the urban

households come under EWS segment having annual

household income of less than INR 3 lakhs and LIG segment

having annual household income in the range of 3 to 5 lakhs.

This segment forms the primary target for affordable housing

developments in the region.

IDENTIFYING CURRENT AFFORDABILITY

Household Income (Per Annum)

Household Distribution (%)

Maximum EMI (INR)

Maximum Loan Eligibility (INR in lakhs)

(8.6% interest rate, 30 year loan tenure)

Buyer's own contribution (INR in lakhs)

(Assuming 90% loan upto 30 lacs and

80% loan upto 75 lacs)

Affordable House Property Value

(INR in lakhs)

Unit Size (sq.ft)

Price (INR/sq.ft)

suitable location considering unit size

and price

Affordability in Chennai

Less than 3 lakhs

72%

10,000

12.87

1.29

14.16

550

2574

Avadi

3 to 5 lakhs

10%

12,000 - 20,000

15.44 - 25.74

1.54 - 2.57

16.98 - 28.31

550 - 850

3087 - 3330

Thaiyur, Avadi,

Thirumullaivoyal,

Singaperumal koil,

Mevalurkuppam,

Sriperumbudur

5 to 10 lakhs

9%

20,000 - 40,000

25.74 - 51.48

2.57 - 10.29

28.31 - 61.77

850 - 1350

3330 - 4575

Navallur,

Kelambakkam,

Mangadu,

Thiruvottiyur,

Ambattur

More than 10 lakhs

9%

48,000

61.78

11.36

73.14

1550

4718

Madhavaram,

Manapakkam,

Pammal,

Madipakkam,

Tambaram,

Chittlapakkam,

Pallikaranai

SELECT AFFORDABLE PROJECTS

Project Name

Earth Homes

Pearl Iris

Smart Town

Happinest

Manjari

SSM Nagar

S. No.

1

2

3

4

5

6

Developer

KG Builders

GP Homes

Casa Grande

Mahindra

Lifespaces

Arun Excello

Compact Homes

SSM Builders &

Promoters

Location

Siruseri

Ambattur

Thazhambur

Avadi

Mevalurkuppam

Perungalathur

Capital Value

(INR/sq.ft)

2,900

3,799

2,799

3,080

3,250

4,500

Unit Size Range

(sq.ft)

930

662

569

348

430

633

Ticket size

(INR)

2,696,000

2,515,000

1,592,631

1,071,840

1,397,500

2,848,500




CONNECTIVITY

Source: Open Street Maps

Coimbatore is well connected to other cities of Tamil Nadu via Avinashi Road, Sathy Road, Thadagam Road, Trichy Road,

Perur Road and Pollachi Road.

INFRASTRUCTURE INITIATIVES

• Planned semi-circular ring road connecting Trichy road -

Airport - Kalapatti -Saravanampatti – Mettupalayam Road

is expected to improve connectivity in Coimbatore

suburbs

• Modernization and expansion of Coimbatore Airport

which includes the creation of a parallel runway, taxiways,

aprons and new passenger terminal buildings

• Slum redevelopment plans proposed as per the Slum free

city action plan

• NHAI has proposed six-lane road from Coimbatore to

Karur

• Construction underway for a road bridge near

Sungampudhur Bye Pass Road towards Palghat Road

• Construction underway for a flyover at Neelambur

junction on Avinashi road and six laning of Neelambur –

Chengapalli junction

• Proposed bridge near HOPE College on Avinashi Road to

facilitate people to cross the railway track

• Planned integrated bus terminus in Vellalore decongesting

the traffic of mofussil buses

CITY OVERVIEW – COIMBATORE

INTRODUCTION

Coimbatore is the second largest city in Tamil Nadu following

Chennai and 16th largest agglomeration in India. The district

spreads across 4,732 sq.km with the population of 3.4 mn. It

is one of the fastest growing tier II cities in India. Further, it is

a major contributor of textile manufacturing sector followed

by recent development of IT SEZs in northern part of the city.

Independent houses and villas are given equal preference as

residential apartments in this city.

DEMOGRAPHIC PROFILE

The population of Coimbatore has grown from 2.9 mn in

2001 to 3.4 mn in 2011. The table below shows the

population trend in the past:

About 40% of the urban households in Coimbatore fall under

SEC D & E constituting of unskilled working population.

Year

1991

2001

2011

2017E

Source: Census 2011

Population (no.)

2,493,715

2,916,620

3,458,045

3,830,021

Decadal Growth (%)

16.96

18.56

10.75



Avinashi Road and Race Course road in Coimbatore are the

elite residential micro-markets with major demand for luxury

projects. More recently, Race Course road has been

witnessing commercial development on erstwhile bungalow

plots. Avinashi Road is one of the main arterial roads of the

city and the prime real estate corridor. More recently the

location has been witnessing commercial development on

erstwhile bungalow plots On-going infrastructure

development in terms of 6-laning of the road, trade centre,

airport expansion and government promoted IT SEZ has led

to increased development here.

Trichy Road is located in proximity to Avinashi Road. Real

estate development on the corridor can be attributed to the

spill over demand from Avinashi Road.

Mettupalayam Road is one of the established residential

corridors with residential micro-markets such as Sai Baba



Based on Indicus data 2013 – 2014, more than half of the

urban households come under EWS segment having annual

household income of less than INR 3 lakhs. This segment

forms the primary target for affordable housing developments

in the region.




Maximum EMI (INR)







(INR in lakhs)

Unit Size (sq.ft)

Price (INR/sq.ft)


and price


Less than 3 lakhs

68%

10,000

12.87

1.29

14.16

550

2574

Dhaliyur,

Veerakeralam

3 to 5 lakhs

11%

12,000 - 20,000

15.44 - 25.74

1.54 - 2.57

16.98 - 28.31

550 - 850

3087 - 3330

Vilankuruchi,

Kalapatti,

Vedapatti,

Kuruchi,

Kovaipudur,

Kuniyamuthur

5 to 10 lakhs

10%

20,000 - 40,000

25.74 - 51.48

2.57 - 10.29

28.31 - 61.77

850 - 1350

3330 - 4575

Saravanampatti,

Singanallur,

Ondipudur,

Vadavalli, PN

Pudur, Vedapatti,

Podanur,

Koundampalayam

More than 10 lakhs

11%

48,000

61.78

11.36

73.14

1550

4718

Puliakulam,

Sowripalayam,

Peelamedu,

Ramanadhapuram,

Ganapathy

Colony and R.S.Puram. Residential projects in the micro-

market cater to MIG & Upper MIG segments.

Saravanampatti and Ganapathi located off Sathy Road and

Trichy are primarily witnessing affordable projects.

Over the last decade the city witnessed the shift in

preference for apartments over independent housing. Current

residential development in Coimbatore constitutes majorly of

apartments. Over the past few years the market has

witnessed the development of township projects by national

developers such as Sobha, Puravankara, True Value Homes.

Premium segment residential demand is restricted to the city

locations of Race Course road, R.S.Puram and Avinashi road.

Peripheral markets cater to the mid-segment demand. Large

scale projects and townships are being developed towards

the south and west of the city. Coimbatore residential market

has been pioneer to Senior Living projects in India.


Project Name

Shresta

Palms

Garden City

Tech City

Abhinav

Coconut Grove

Green Park

Eternia II

Saidhan

Enclave

Ramprasath

paradise

S. No.

1

2

3

4

5

6

7

8

9

10

Developer

Sriram Properties

Prozone

Town and City

Developers

Town and City

Developers

RR Housing

Ramani Realtors

Provident Housing

Casa Grande

Victoria Realtors

Afcon Builders

Location

Sundarapuram

Sathy Road

Vedapatti

Saravanampatti

Vedapatti

Singanallur -

Vellalore Road

Off Perur Main

Road

Off Sathy Road

Kovaipudur

Veerapandi

Capital Value

(INR/sq.ft)

2946

3600

2800

3000

2700

3300

4056

3400

3200

2700

Unit Size Range

(sq.ft)

645

721

336 - 625

408

409 - 810

568 - 870

542 - 888

633 - 644

583 - 1033

650 - 1102

Ticket size

(INR)

1,900,170

2,595,600

940,800 -

1,750,000

1,224,000

1,104,300 -

2,187,000

1,874,400 -

2,871,000

2,198,352 -

3,601,728

2,152,200 -

2,189,600

1,865,600 -

3,305,600

1,755,000




CITY OVERVIEW – TRICHY

INTRODUCTION

Tiruchirappalli is one of the early colonized cities located

beside the Kaveri River in Tamil Nadu. The district spreads

across 4,509 sq.km with the population of 2.7 mn.

Engineering equipment fabrication and manufacturing are the

major economic drivers in this city after the establishment of

Railway Workshop and BHEL which induced several ancillary

industries around the city. Flour mills and distilleries are other

industries followed by manufacturing sector. In contrast with

competing tier II cities, residential apartments are much

preferred development in this city

DEMOGRAPHIC PROFILE

The population of Trichy district has grown from 2.4 mn in

2001 to 2.7 mn in 2011. The table below shows the

population trend in the past:

About 42% of urban households in Trichy fall under SEC D &

E constituting of unskilled working population.

Year

1991

2001

2011

2017E

Source: Census 2011

Population (no.)

2,196,473

2,418,366

2,722,290

2,922,684

Decadal Growth (%)

10.10

12.57

7.36

CONNECTIVITY


Trichy is located in the geographic center of Tamil Nadu which facilitates better connectivity to urban major centers and other

districts of the state. The road network primarily comprises national highways and state highways connecting the city to

Thanjavur, Pudukkottai, Madurai, Dindigal, Karur, Ariyalur, Thuraiyur and Chennai with NH-5 being the major road connecting

Dindukkal and Trichy.

Trichy Bypass and flyovers in traffic congestion areas are recent key improvements in Trichy road network.

Trichy International Airport located at Ramanadhapuram Road connects the city with domestic destinations as well as Middle

East and South East Asian countries


• Proposed Hitech Engineering Industry Governance and

Habitat around Tiruchirappalli (HEIGHT)

• Road over bridge on Uyyakondan channel near Palakkarai

police station

• River bridge on EVR road near Court and on Kulumani

road on Kudamuruty river

• Formation of 120 feet wide ring road around Trichy City

with a circumference of about 80 Km and a radius of 10 to

15 Km from Central Business District

• 100 feet wide road connecting Madurai road and Dindugal

road through Pirattiyur village.

• 80 feet wide road connecting Boulevard road and

Chennai bye-pass road

• Link road connecting Dindugal road and Karur road along

the Koraiyur river bund

• Truck terminal along Dindugal road to smoothen traffic

flow of trucks

• Proposed Underground Sewerage Scheme for

corporation limits under National River Conversation

Project




Srirangam

Srirangam is one the developing residential areas in Trichy.

This micro market has witnessed major demand as far as

residential market is concerned. Residential projects

developed in this micro market cater predominantly to MIG

segment. Ranganathanswamy temple is one of the factors

which drive the residential market in this location.

Thillai Nagar

Thillai Nagar is one of the elite property markets in Trichy

comprising both retail high-street and residential

development. It has excellent connectivity to public

infrastructure facilities and close proximity to Trichy Fort

Railway station. Supply of Residential development is limited

in this micro market due to higher capital values and scarce

availability of land parcel.

Toll Gate

Tollgate is one of affordable residential markets located in the

outskirts of the city. Being the junction for connecting major






in the region.

cities in Tamil Nadu, close proximity to Trichy city and lower

capital values, the micro market has gained momentum in

residential development which caters to MIG segmet.

KK Nagar

KK Nagar is another developing locality in Trichy located in

close proximity to Trichy International Airport. The micro

market was primarily a residential area with recent

commercial and retail developments. Presence of major

supermarkets and reputed educational institutes drives the

realty market in this location.

Edamalaipatti Pudur

Edamalaipatti Pudur or E.Pudur is located on Madurai Road

and has proximity to Trichy central bus terminus. Major

residential developments were seen in this location in recent

years. Primary residential areas in this micro market are RMS

Colony, SBI colony, Francina colony and Pillayar kovil street.




Maximum EMI (INR)







(INR in lakhs)

Unit Size (sq.ft)

Price (INR/sq.ft)


and price


Less than 3 lakhs

67%

10,000

12.87

1.29

14.16

550

2574

Manikandam,

Illuppur

3 to 5 lakhs

11%

12,000 - 20,000

15.44 - 25.74

1.54 - 2.57

16.98 - 28.31

550 - 850

3087 - 3330

Srirangam,

Thiruvanaikovi

5 to 10 lakhs

12%

20,000 - 40,000

25.74 - 51.48

2.57 - 10.29

28.31 - 61.77

850 - 1350

3330 - 4575

Edamalaipatti

Pudur, Thiruvanai

kovil, Palpannai,

Woraiyur, KK

Nagar Palpannai,

Sangiliyandapuram

More than 10 lakhs

10%

48,000

61.78

11.36

73.14

1550

4718

Kallanai Road,

Thillai nagar,

Woraiyur


Project Name

Luxor

The Majestic

Citi Square

Tamizh Kaveri

Excell Premier

Nakshatra

S. No.

1

2

3

4

5

6

Developer

South India

Shelters

Sebco Property

Bharath

Constructions

Tamizh

Constructions

Excell Builders

Rohini Housing

Developers

Location

Manigandam

Pudukkottai

Highway

Woraiyur

Srirangam

Old Pal Pannai

Sangiliyandapuram

Capital Value

(INR/sq.ft)

2,099

2,500

4,000

3,900

3,650

3,800

Unit Size Range

(sq.ft)

585 - 613

763

650

637

736

657 - 827

Ticket size

(INR)

1,227,915 -

1,286,687

1,907,500

2,600,000

2,484,300

2,686,400

1,839,600 -

3,142,600




CITY OVERVIEW – MADURAI

INTRODUCTION

Madurai located on the banks of Vaigai River, is the third

most populated city in Tamil Nadu. The district spreads

across 3,710 sq.km with the population of 3.0 mn.

Manufacturing of rubber, textiles and automobile

components are the major economic drivers of the city and it

is a significant tourist destination with seasonal influx of

foreign tourists. The southern bank of Vaigai River comprises

the 'Old Town' where the city of Madurai developed around

the Meenakshi Amman Temple. Supply of residential

apartments in this city is limited due to higher demand and

acceptance for villas & independent houses by the buyers

DEMOGRAPHIC PROFILE

The population of Madurai district has grown from 2.5 mn in

2001 to 3.0 mn in 2011. The table shows the population trend

in the past. Further, there was a deflection in decadal growth

of Madurai city from 1991 to 2001 due to the bifurcation of

Madurai and Theni districts.

Majority of the urban households in Madurai fall under SEC D

& E constituting unskilled working population

Year

1991

2001

2011

2017E

Source: Census 2011

Population (no.)

2,400,339

2,578,201

3,038,252

3,352,803

Decadal Growth (%)

7.41

17.84

10.35

CONNECTIVITY


The network of roads in the Madurai Corporation adds up to 615 km with radial roads towards CBD along Dindigul Road,

Melur Road, Ramnad Road and Tirunelveli Road. High traffic volume on these roads has led to traffic congestion. There is an

Outer Ring Road that runs along the periphery of the city. In addition to this to address congestion issues, the Corporation of

Madurai has proposed to construct two ring roads namely intermediate and inner ring roads.

There are a number of bridges and causeways constructed across the river Vaigai to establish good connectivity. Albert Victor

Bridge (A.V. Bridge) and bridge over the old Kalpalam causeway play a major role in handling traffic.

Madurai is an important junction on the Southern Railway line and is connected with some of the major stations like Chennai,

Howrah and Mumbai. Madurai airport is approximately 13 km. from the Madurai Railway station and provides connectivity to

Bangalore, Chennai and Mumbai.


• Up gradation of Madurai ring road in length of 27.2 Km

(PPP) - The project envisages widening the Madurai ring

road from two to four lane proposed by Tamil Nadu Road

Infrastructure Development Corporation




Othakkadai, Vilangudi, Kochadai, Madakkulam,

Moondrumavadi, Andalpuram and KK Nagar are the major

residential micro markets in Madurai that have witnessed

considerable residential group housing developments in

recent years.

Othakadai, Vilangudi, Moondrumavadi: Being located in

the eastern part of Madurai with close proximity to

Ilanthakulam IT SEZ and upcoming infrastructure facilities,

these micro markets had unlocked the realty market for

residential group housing development.

Kochadai is a prime residential market located along Melakal

road with proximity to by-pass road. Being located in less






in the region.

traffic congestion area within the corporation limit and

availability of land parcel, the demand for real estate

developments in this micro market has recently increased.

This micro market caters primarily to MIG segment.

Andalpuram and KK Nagar are the elite residential micro

markets in Madurai with close proximity to CBD. This micro

market caters majorly HIG segment followed by MIG

segment.

Regardless of supply trend of residential apartments, it is

observed that villa projects have higher absorption level than

residential apartments driven by end user preference.




Maximum EMI (INR)







(INR in lakhs)

Unit Size (sq.ft)

Price (INR/sq.ft)


and price


Less than 3 lakhs

67%

10,000

12.87

1.29

14.16

550

2574

Manikandam,

Illuppur

3 to 5 lakhs

11%

12,000 - 20,000

15.44 - 25.74

1.54 - 2.57

16.98 - 28.31

550 - 850

3087 - 3330

Srirangam,

Thiruvanaikovi

5 to 10 lakhs

12%

20,000 - 40,000

25.74 - 51.48

2.57 - 10.29

28.31 - 61.77

850 - 1350

3330 - 4575

Edamalaipatti

Pudur, Thiruvanai

kovil, Palpannai,

Woraiyur, KK

Nagar Palpannai,

Sangiliyandapuram

More than 10 lakhs

10%

48,000

61.78

11.36

73.14

1550

4718

Kallanai Road,

Thillai nagar,

Woraiyur


Project Name

Luxor

The Majestic

Citi Square

Tamizh Kaveri

Excell Premier

Nakshatra

S. No.

1

2

3

4

5

6

Developer

South India

Shelters

Sebco Property

Bharath

Constructions

Tamizh

Constructions

Excell Builders

Rohini Housing

Developers

Location

Manigandam

Pudukkottai

Highway

Woraiyur

Srirangam

Old Pal Pannai

Sangiliyandapuram

Capital Value

(INR/sq.ft)

2,099

2,500

4,000

3,900

3,650

3,800

Unit Size Range

(sq.ft)

585 - 613

763

650

637

736

657 - 827

Ticket size

(INR)

1,227,915 -

1,286,687

1,907,500

2,600,000

2,484,300

2,686,400

1,839,600 -

3,142,600



CITY OVERVIEW – ERODE

INTRODUCTION

Erode located alongside Kaveri River is the seventh largest

urban centers in Tamil Nadu. Erode has a hilly terrain with

undulant topography. The district spreads across 5,760

sq.km with the population of 2.3 mn. Rapid increase in

economic and industrial activities, population and per capita

income had compelled Erode Municipal Corporation to

include municipalities, town panchayats and village

panchayat to its jurisdiction. Manufacturing of handloom and

textile products are the major economic activities in the city

followed by production of turmeric. Both residential

apartments and villas are preferred in this city. Majority of the

existing apartment developments are witnessed in the

outskirts of the city with predominantly S+4 structure.

DEMOGRAPHIC PROFILE

The population of Erode has grown from 2.0 mn in 2001 to

2.3 mn in 2011. The table below shows the population trend

in the past.

Majority of the urban households in Erode fall under SEC D &


Year

1991

2001

2011

2017E

Source: Census 2011

Population (no.)

1,802,939

2,016,582

2,251,744

2,405,808

Decadal Growth (%)

11.85

11.66

6.84

CONNECTIVITY


There are six state highways and two district roads passing through the central part of the city which connect Erode with

other parts of Tamil Nadu.

• Erode – Bhavani Road (SH – 20) which connects NH-47 running parallel to Cauvery River

• Erode – Sathyamangalam Road (SH –15) which connects with Gobichettypalayam and Sathayamangalam in the north

• Erode – Nasiyanur – Thingalur Road (SH- 173) leading to Nasiyanur and further leading to Thingalore in the west

• Erode – Perundurai Road(SH – 96) which connects Perundurai in south west direction and further connects with

Coimbatore

• Other district roads – Chenaimalai road, Erode – Arachalur – Kangeyan Road, Erode – Karur Road, Erode – Shivagiri Road

Major roads for intra city movement are Bhavani Road, Brough road, E.V.Nanjappa (Mettur) road, Gandhiji Road, KNK Road

and RKV Road.


• Proposed development of 110 kms of arterial roads

including a Circular Ring Road and Satellite Ring Road

• Proposed grade separators, 3 bridges and 28 intersection

improvements at various locations

• Proposed public transit corridors along Karur road,

Perundurai road, Bhavani road and Chithode road

• Proposed bus terminus in Solarpudur to reduce the

congestion in central bus terminus




Thindal

Being located at a proximity to Erode Junction and central

bus terminus, Thindal has become one of the well-known

residential markets in Erode. Due to number of educational

institutes stationed in this micro market and relatively lower

capital values, demand from end users to acquire a

residential property in this location has been increasing. As

per the market survey, absorption level in this location for

residential apartments are higher than the other micro

markets in Erode.






in the region.

Solarpudur

Solar is one of the developing residential micro-markets

located 6 km away from Erode Junction. A new mofussil bus

terminus has been proposed in this location to reduce

congestion in central bus terminus which has increased the

capital values in this micro market.

Teachers Colony

Teachers colony located in proximity to CBD is one of the

prime residential locations in Erode. Supply of recent

residential developments is minimal in the micro market due

to limited availability of land parcel and higher capital values.






CITY OVERVIEW – TIRUPPUR

INTRODUCTION

Tiruppur located along the Noyyal River is the fifth largest

urban centers in Tamil Nadu. The district spreads across

5,187 sq.km with a population of 2.5 mn. Production and

export of cotton and textile products are the major economic

activities in this city. It contributes about 90% of total cotton

knit wear exports from India. To support the textile industries,

special industrial parks were developed to aid the production

and export of apparels. Residential apartment developments

in the city including projects by renowned developers have

witnessed slow absorption. However, a few projects in the

city limits have been witnessing demand primarily from the

migrant population from Coimbatore.

DEMOGRAPHIC PROFILE

The population of Tiruppur has grown from 1.9 mn in 2001 to

2.5 mn in 2011. The table shows the population trend in the

past.

Majority of the urban households in Tiruppur fall under SEC D

& E constituting of unskilled working population

Year

1991

2001

2011

2017E

Source: Census 2011

Population (no.)

1,531,983

1,920,154

2,479,052

2,889,717

Decadal Growth (%)

11.85

11.66

16.84

CONNECTIVITY


Tiruppur is well connected to prominent places in and around the district via National and State Highways:

• NH - 47 which connects Avinashi

• NH – 67 which connect Kangeyam and Palladam

• NH – 209 which connects Udumalpet

Tiruppur Railway Junction is the closest rail network facilitating Avinashi, Palladam and Kangeyam Taluks. Coimbatore Airport

located at a distance of 45 km is the nearest airport from Tiruppur.


Major residential markets in Tiruppur are Rayapuram, KPN colony, Odakaadu located at Avinashi road and off Kangeyam road.

Development of residential apartment in this city is limited as the buyers' preferences are inclined towards villas and individual

bungalows. There are a few residential group housing projects within the city limit which has better absorption level driven by

the migrants from Coimbatore. Rayapuram and Odakaadu micro markets have witnessed residential group housing

development in recent years.








in the region.






CITY OVERVIEW – SALEM

INTRODUCTION

Salem is the fifth largest urban centers in Tamil Nadu. The

district spreads across 5,273 sq.km with a population of 3.5

mn. Steel manufacturing is the major economic activity in the

city followed by production of silk products. Salem has an

integrated steel plant which is a part of Steel Authority of

India

DEMOGRAPHIC PROFILE

The population of Salem has grown from 3.0 mn in 2001 to

3.5 mn in 2011. The table shows the population trend in the

past.

Majority of the urban households in Salem fall under SEC D &


Year

1991

2001

2011

2017E

Source: Census 2011

Population (no.)

2,573,667

3,016,346

3,482,056

3,795,321

Decadal Growth (%)

17.20

15.44

8.99

CONNECTIVITY



Based on Indicus data 2013 – 2014, majority of the urban

households come under EWS segment having annual

household income of less than INR 3 lakhs and LIG segment

having annual household income in the range of 3 to 5 lakhs.

This segment forms the primary target for affordable housing

developments in the region.






CITY OVERVIEW – TIRUNELVELI

INTRODUCTION

Tirunelveli is located along the banks of Tamaraibharani River

in the west. It is the sixth largest municipal corporation in

Tamil Nadu. The district spreads across 6,693 sq.km with a

population of 3.1 mn. Educational institutes, food processing

and agro-machinery manufacturing and wind power

generation are the major economic activities of the city.

Tirunelvelli is a developing market for residential apartments

as majority of the existing developments comprises villas and

individual bungalows

DEMOGRAPHIC PROFILE

The population of Tirunelveli has grown from 2.7 mn in 2001

to 3.1 mn in 2011. The table shows the population trend in

the past.

Majority of the urban households in Tiruppur fall under SEC D

& E constituting of unskilled working population

Year

1991

2001

2011

2017E

Source: Census 2011

Population (no.)

2,481,880

2,703,492

3,077,233

3,325,842

Decadal Growth (%)

17.20

15.44

8.07

CONNECTIVITY


Tirunelveli has a well-connected road network to other parts of Tamil Nadu as well as within the city. NH-7 is the major road

connecting Kollam, Tiruchendur, Rajapalayam, Sankarankovil and Ambasamuthiram.

Tirunelveli junction railway station is the one of the oldest railway stations connecting other districts of Tamil Nadu. Tuticorin

Airport is the nearest Airport to Tirunelveli.


Malapalayam, Reddiyarpatti, Maharaja Nagar and Perumal nagar are the major residential locations of Tirunelveli. Maharaja

Nagar and Perumal Nagar have more number of residential apartments in the city catering to MIG segment. Even though the

capital value in these locations is comparatively low with its competing tier II cities, configuration size developed and

developing in the prime micro markets in the city makes the development unaffordable to LIG segments.






Salem comprises of six major roads: Omalur Road, Cherry Road, Saradha College Road, Junction Main Road, Yercaud Road

and Attur Road. NH - 44 (Srinagar – Kanyakumari) passes through Salem. NH-544 (Salem – Kochi) and NH- 79 (Salem –

Ulundurpet) originates from Salem.

Intercity road transportation from Salem originates from central bus terminus and Intracity road transportation originates from

old bus terminus.

Salem Railway Junction is located in Suramangalam connecting other districts of Tamil Nadu. Salem Airport is located on

Salem – Bengaluru highway (NH7) at a distance of 9 km from the city center.


Major residential apartments are developed in locations like Yercaud Road, Kannakuruchi, Mullai Nagar and Shivaya Nagar.

Shivaya Nagar is located off Sharadha college road with proximity to Salem Junction. This micro market has considerable

residential apartments within the city limits despite the fact that residential villas and plotted development are the much

preferred developments. 2BHK and 3BHK is the typical development product mix in this location.

Yercaud road is the developing residential stretch in Salem with existing villa projects and upcoming residential group housing

in Adivaram road located off Yercaud road.






in the region.



CONSTRUCTION TECHNOLOGY

RAPID MONOLITHIC DISASTER PROOF

TECHNOLOGY

Rapid Monolithic Construction - The Construction in which,

all building elements including wall, beam and columns are

casted simultaneously which ensures absolutely no joints.

Monolithic construction ensures great surface finish,

durability and earthquake resistant.

This construction technology would require minimum number

of skilled labors with curtailed construction activity. The initial

investment for this technology would be comparatively higher

than the conventional construction methods but ensures

minimal resource consumption, material wastage and

completion timing. RMD Technology – As per “UltraTech

Cement Limited” RMD technology is a game changer in

future as a solution to develop cost effective and sustainable

development

TECHNOLOGY AS SUSTAINABLE

This technology consumes less water, energy, natural

resources and minimal construction/site waste or material

waste which ensures sustainable yet high performance

structures. Monolithic construction also ensures faster

construction phase.

CASE STUDY 1

EWS Housing for Bangalore Development Authority,

Bangalore, Karnataka had developed a Housing development

of G+3 structures using monolithic construction technology.

A brief construction process of the above mentioned

development is represented below

Reinforcement for Superstructure - Walls

Formwork for slab supports

Ready to dispense concrete

Embeded Electrical Circuits

Formwork completed with window opening

Units ready for final finishing



CASE STUDY 2

Cluster of EWS Houses developed for Karnataka housing

board implemented by Rajiv Gandhi Housing Corporation at

Rajankunte site, Bangalore.

Area of Plinth – 285 sq.ft, single storey

Cost of House – INR.2 Lakhs

Technology – Monolithic construction

Grade of Concrete – M20 dynamic grade for wall & M20 for

roof & foundation

Shuttering – Mivan

CONSTRUCTION TIMELINE

CONSTRUCTION COST



FINANCING OPTIONS

1. NHB - World Bank – Low Income Housing Finance

Project

The objective of the project is to provide access to

sustainable housing finance for low income households, to

purchase, build or upgrade their dwelling units.

The Proposed project has three components:

• The First component is financial support to build capacity

of the NHB, qualified intermediary institutions and

qualified primary lending institutions by building new

financial products, loan standards, risk management

tools, financial literacy and consumer protection capacity.

• The Second component is the financial support for

sustainable and affordable housing. This component will

finance NHB to refinance, directly or indirectly through

qualified intermediary institutions, low income housing

loans by qualified primary lending institutes to primary

borrowers to purchase, build or upgrade their dwelling

unit. This component will aid the secured low income

housing loans to borrowers with formal and informal

incomes.

• The Third component is project implementation. A Project

Implementation Unit will be set up within NHB to help

implement the project, carry out monitoring and

evaluation, be responsible for legal and grievance

redressal and monitoring social and environmental due

diligence.

2. Refinance Scheme for Construction Finance for

Affordable Housing

NHB aims to aid the market supply for affordable housing by

concessional finance assistance to developers to develop

affordable projects through scheduled commercial banks and

Housing finance companies.

Eligibility Criteria for Implementing Agencies

• Public agencies viz. Housing Boards, Development

Authorities, Slum Improvement / Clearance Board,

Improvement Trust etc.

• Private Developers/Builders etc. conforming to the

following criteria :

– Developers / builders undertaking low cost affordable

housing projects should be a company registered

under the Companies Act, 1956

– Such developers / builders should have minimum 5

years of experience in undertaking residential projects,

and should have good track record in terms of quality

and delivery

– The developers / builders should not have defaulted in

any of their financial commitments to banks / financial

institutions or any other agencies

– The project should not be a matter of litigation

– The project should be in conformity with the

provisions of master plan / development plan of the

area.

– The layout should conform to the land use stipulated

by the town and country planning department for

housing projects

– All necessary clearances from various bodies

including Revenue Department with respect to land

usage / environment clearance, etc. are available on

record

– Long term debt equity ratio of the agency not to

exceed 2:1 as per the latest annual audited accounts

Eligible Projects

The housing projects of the public agencies and of private

developers (either of their own or under PPP model or joint

venture) satisfying the following criteria would be eligible for

NHB's refinance:

• Projects with at least 60% of the permissible FSI for units

of carpet area up to 60 sq.m and cost of the unit (having

carpet area up to 60 sq.m) not exceeding 30 lakhs per

unit; OR

• Projects having at least 60% of total number of dwelling

units earmarked for units having carpet area up to 60

sq.m and cost of each such unit not exceeding 30 lakh.

OR

• Slum improvement / rehabilitation projects conforming to

the parameters to be set by the Central Sanctioning and

Monitoring Committee of the Affordable Housing in

Partnership Scheme (AHP) constituted under the

Chairmanship of Secretary, HUPA

• Promoter's contribution - minimum 20% of project outlay

(applicable to private agencies)

• Minimum asset coverage of 1.33:1 based on market/

book value of the project whichever is lower; as certified

by a valuer (applicable to private agencies).

AFFORDABLE HOUSING – KEY PARAMETERS

The lack of available housing option in the market, coupled

with minimal income households and minimal access to

housing finance truly impacts the LIG/EWS sectors radically,

hence in order to cater those segments, the following

parameters are to be considered as a paramount importance

while developing an affordable housing projects.

Physical & Social Infrastructure:

In the current market scenario, private developers are forced

to develop an affordable housing project in the urban

periphery due to lack of affordable and adequate land parcel

within the urban centers.

In order to develop a sustainable affordable housing project,

apart from the infrastructure facilities offered with in the

project, the connectivity to urban centers and workplace

destinations should be adequate and feasible.

Adherence of Sustainable/Green development plays a crucial

role in enhancing living quality of the occupants and

performance of the development with respect to resource

consumption.

Financial Literacy:

Majority of the LIG and EWS segment household doesn't

have a formal income proof or document to establish

solvency for securing a housing loan from Housing Finance

Companies.

Financial support and financial literacy is the need of the hour

for these segments, however certain Housing finance

companies in the market have started a new Home loan

products to finance such borrowers with a risk premium on

the market lending rate.

Cost of Ownership:

Regardless of the financial support to LIG/EWS segment in

the market, willingness to own a property for a buyer from

these segments is least due to the following reasons

• Additional cost attached to the unit such as VAT, Service

Tax, Stamp duty, registration and other cost which

constitutes approximately around 15% to 25% of the

home cost

• Lack of public transit systems to peri-urban areas which

are likely to be the affordable housing catchments

© Knight Frank India Pvt . Ltd.

Praveen SubramanyaAssociate Director, Valuation & [email protected]

VALUATION & ADVISORY

For the latest news, views and analysisof the commercial property market, visitknightfrankblog.com/commercial-briefing/

COMMERCIAL BRIEFING

This report is published for general information only and not to be relied upon in anyway. Although high standards have been used in the preparation of the information analysis, views and projections presented in the report, no responsibility or liability whatsoever can be accepted by Knight Frank for any loss or damage resultant from any use of, reliance on or reference to the contents of this document.As a general report this material does not necessarily represent the view of Knight Frank in relation to particular properties or projects. Reproduction of this report in whole or in part is not allowed without prior written approval of Knight Frank to the form and content within which it appears.

For the latest news, views and analysisof the commercial property market, visitknightfrankblog.com/commercial-briefing/

COMMERCIAL BRIEFING

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INDIA WAREHOUSINGMARKET REPORT 2018

INDIA REAL ESTATEJUL - DEC 2017

INTERNATIONAL VIEW

RECENT MARKET-LEADING RESEARCH PUBLICATIONS

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THE WEALTH REPORT2018

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Knight Frank India research provides development and strategic advisory to a wide range of clients worldwide. We regularly produce detailed and informative research reports which provide valuable insights on the real estate market. Our strength lies in analysing existing trends and predicting future trends in the real estate sector from the data collected through market surveys and interactions with real estate agents, developers, funds and other stakeholders.

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