AFFORDABLE HOUSING A BIG OPPORTUNITY: NEED FOR PUBLIC-PRIVATE PARTNERSHIP TO TAP THE POTENTIAL

AFFORDABLE HOUSING A BIG OPPORTUNITY: NEED FOR PUBLIC-PRIVATE PARTNERSHIP TO TAP THE POTENTIAL

The Economic Times, November 10, 2009, Page 10

Arindam Ghosh New Delhi

Availability of affordable residential property is the need of the hour for the country's growing population but a sustainable development of low cost housing requires a partnership between the government and the private sector. The role of public-private-partnership (PPP) where the government provides better infrastructure and expedites project clearance while the private sector develops the land was the focus of the second session at The Economic Times Realty Convention, 2009.

Anshuman Magazine, chairman and managing director of real estate services company CB Richard Ellis India began the discussion by stressing that the most critical aspect of housing development is infrastructure and that the concept of affordable housing has to be defined since what can be affordable in Mumbai could be a luxury in Hyderabad.

He pointed out that there is no shortage of land for housing or any other project, but the problem is of infrastructure. "If more infrastructure can be developed by the government more land can be developed by the real estate players" he said.

The participants at the session also brought out concerns related to delays in getting clearances from the government. Rajeev Talwar, executive director at DLF Ltd, said, "Time taken for approvals is too long, sometimes approvals with 30 or 40 authorities itself takes about two to two and half years. No one minds paying the money for approvals, but yes the time taken for approvals has a greater cost."

Naveen Raheja, managing director of Raheja Developers also highlighted the concerns of the real estate firms and asked the government to fasten their process of giving approvals. He said that the people who facilitate the process of clearing projects, should be able to take decisions quickly. "There are beautiful policies and schemes which can make a revolutionary change in the country for housing, but please give us that good mindset of people who will facilitate. If they really understand us, they can sign up in five minutes instead of five months," he said.

Other speakers highlighted the significance of urban affordable housing segment as it forms the largest chunk of the domestic housing market.

It has a steady demand growth that does not shrink or fluctuate with the fortunes of the stock markets or the global economy. It is much less volatile compared to the demand for luxury apartments which has its share of speculative buying and many people use it as a long term investment rather than a place of residence. The panellists noted that the private developers need to exploit the long term business opportunities that lie locked in affordable housing.

PK Mohanty, mission director of Jawaharlal Nehru National Urban Renewal Mission (JNNURM), said, "Affordable housing is a lucrative business proposal. Although profit margin may be small at the bottom of the pyramid, but when you take the volume of millions of Indians living below poverty line with as much as 62 million slum dwellers and many of them occupying very valuable land, I think affordable housing could be made a strong business proposition." He stressed on the need for more PPP in affordable housing.