Demand For Affordable Housing Projects In Urban Areas

Likewise, Shah observed that the immediate approval mechanism for affordable housing is needed, apart from higher FSI.

"Additionally, the government should ensure that these projects get cheaper funds to keep the costs in check. Also, the threshold for one per cent lower interest rate in affordable housing should be re-defined in line with the city category for example, for Mumbai it should be at least Rs 75 lakh," said by Shah.

On this context, Manoj John - Vice-President, Corporate, Planning & Strategy - RNA Corp stated that lack of adequate civic and transport infrastructure is one more vital issue related to affordable housing projects, mainly in places with lower land cost. He further cited that "Given that these locations are located at a distance from prime or urban centers, the infrastructure developments in these locations are also relegated to low priority. This in turn make the 'affordable housing ' projects inhabitable,” reports Economic Times.

In addition to this, earlier schemes like 801B which meant for providing support to affordable housing, is no longer available.

"This could be reinstated with reduced areas or capped on sale value of unit. For metro locations, it could be Rs 25 lakh, for Tier 1 cities it could be 20 lakh, for Tier 2 and 3 cities the cap could be 15 and 10 lakhs respectively. Formation of special housing zones with associated infrastructure development would lend the desired support for developers to actively adopt these areas, without having to worry about the viability of projects," said John.

Furthermore, these aforementioned zones could also make some special taxation areas where the exercise rate will be less on construction material as well as lower income tax rates on revenues earned. Similarly, concessional rates could be offered on registration and property tax rates for home buyers. 

With commercial establishments and businesses that would cater to the population living in these defined zones, the government can recover the loss of income caused through concession.