7 states account for 70% of housing shortage

If you have not been able to buy your dream home despite working for many years ‑ blame the nexus between builders and big investors who are profiteering by locking up the newly launched houses in the market. No wonder, the prices of homes in the country have gone only northward, despite a massive decline in the sale of houses since 2008.

A report prepared by the ministry of housing and poverty alleviation on urban housing shortage for the 12th plan (2012-17) states that 70% of the housing shortage exists in the seven states - Uttar Pradesh, Maharashtra, West Bengal, Bihar, Rajasthan, Andhra Pradesh and Tamil Nadu.

The report that has been prepared by a panel of 10 members including D S Negi, director National Building Organisation and OSD Jawaharlal Nehru National Urban Renewal Mission and Rajiv Awas Yojana, Amitabh Kundu, professor of economics at Jawahar Lal Nehru University, Susheel Kumar, secretary ministry of HUPA, P K Mohanty, additional secretary, ministry of HUPA, C Chandramouli, registrar general and census commissioner and R V Verma- CMD National Housing Bank.

Interestingly, the private sector does not build up enough low-cost housing projects despite government’s subsidies for such houses in terms of low interest rates. According to the report, the biggest shortage in the housing sector lies in the low income group and in the economically weaker section category. The houses with a covered area of 300sqft come under this category.
As a remedy, the report has suggested to the government to make changes in the Rent Control Act by making it easier for the landlord to rent out his house.

Currently, the biggest shortage of housing is found in the cities where the landlords are not renting out their homes.

In the report, the ministry of HUPA has pitched for providing the industrial status to the housing sector, which will open up avenues for small developers to get loans from the banking sector and tax rebates from the government.

Among its other finding, the report has pointed out that the shortage in urban housing takes place mainly due to migration from villages to cities in search of jobs and livelihood. As a result quality of life is often compromised and often leads to creation of slums whereby premium land is often occupied. A higher stock of houses should be created, some through new constructions and the rest by unleashing the existing locked up stocks, according to the report.