One of the basic needs that have to be fulfilled in order to provide an existence of dignity to human beings is housing.
Affordable housing is a housing concept, appropriate for the needs of a range of very low to moderate income households. The housing this is priced such that these households can afford to own one without compromising their basic living life styles of food, clothing, transport, medical care, education, etc. Housing is usually considered affordable if it costs less than 30 per cent of gross household income.
Affordable housing is not about budget or substandard homes in isolated areas with compromise on connectivity, surrounding infrastructure or on space, quality or facilities as required by the family. On the contrary, affordable housing is offering all basic amenities and facilities with quality construction, but at a price point that is affordable by aspiring customers. Affordable Housing thus cuts across all income segments of the society and makes good economic sense.
Affordable housing units offered by Navjivan cost Rs 6,00,000 to Rs 12,00,000/- per unit and will target households in the income group of Rs 15,000 – Rs 25,000 per month.
At a rough estimate, India’s overall housing shortage as of today stands at about 22 million homes.
India's housing market has been forecast to grow to $90 billion by 2015 as compared to $12 billion in 2005. Affordable housing is expected to account for 80% of the total housing demand over the next 4-5 years. As the Indian middle class expands, the demand for affordable housing is likely to increase even further.
Consequently, the potential market size for affordable housing in urban India is forecasted to grow about 1.5 times from an estimated 22 million households in 2010 to 38 million in 2030.
With high population, thanks to rapid urbanization, availability of land is a major issue. Developing low-cost houses on expensive lands push the overall cost of building. Hence, developers are forced to buy plots on the outskirts where infrastructure is in a bad shape.Adding to the worry is also the construction and labour costs which add up to the overall costs of the project pushing up the cost for the consumer.
The major roadblock in determining the sale of affordable housing projects from the customer's perspective is the availability of adequate financing sources. Here the role of micro-finance institutions in enabling the low income consumers purchase these "Affordable houses" is of much importance.Also there is need for timely approvals by government authorities which can cut down the overall cost of the project by at least 20%.