Affordable Housing in Partnership

The Cabinet Committee on Economic Affairs has approved a Scheme to encourage States to increase the supply of land and construct 10 lakh affordable houses. The scheme is expected to activate the measures announced for the housing construction sector under the Economic Stimulus packages. It will increase the stock of houses ranging from 300 sq.ft to 1200 sq.ft plinth area built at affordable rates on land provided by State Governments.

Construction and development is envisaged in PPP mode. Private Sector developers and builders as well as State Housing Boards are expected to be partners to the Government and construct and develop projects with funding from institutional sources. Real estate developers looking to affordable housing during the downturn will now have an opportunity to take up projects where demand for housing is still high. The urban housing shortage is estimated at 24.7 million, largely for the weaker and low income households.

Central Government will share costs on external civic infrastructure and connectivities for such projects on a reimbursement basis.

The pace of applications for home loans at reduced interest at the rate of 8% to 8.5% for loans upto Rs.5 lakhs and at 9.25% for loans upto Rs.20 lakhs can now be expected to increase.

A minimum of 25% houses of 300 sq.ft will be compulsory for EWS and weaker sections and the urban poor, in each project to be allotted by the Government.

Rs. 5000 crore for the next four years has been set aside for this purpose.