Affordable homes still out of reach for masses

The situation isn’t very different in Chennai, where the demand for such homes is largely in peripheral locations that are yet to be enabled with adequate infrastructure. 

Within city limits, the land is the biggest contributor to the cost of a project. T Chitty Babu, CMD, Akshaya Homes says, “Building affordable homes in the city, keeping land availability in mind, within an affordable price range will be a challenge. With the current FSI (Floor Space Index – the index by which the total constructible area is calculated) and the land cost being high, developers may not be in a position to achieve the desired results of affordable housing.” 

Helping us understand the scene in Chennai, Niranjan Hiranandani, CMD, Hiranandani Communities, says, “Affordable housing across the country is witnessing high demand, and Chennai is no different. The segment works on the premise that buyers want a no-frills home at a price point that is value for money. In Chennai, the demand for affordable housing is largely in peripheral locations. In terms of demand and supply, the ratio seems to suggest higher demand and lower availability.” 

He adds, “High land prices and heavy taxation rates are the twin malaise, while single window clearance which is time-bound would definitely be of help in promoting such homes.”

The demand for these homes is growing in suburbs on the outskirts of Chennai, around 50-60 km away from the PBD (Prime Business Destination), like Mahabalipuram and Oragadam and beyond Poonamallee. “For affordable homes, selling price should under Rs 3,000 per square feet. The government needs to work on unlocking land parcels and introducing FSI relaxation and tax incentives for such homes,” says Babu. 

According to N Nandakumar, MD, Devinarayan Housing, “From the long term maintenance perspective, high rise buildings tend to cost more for the end user compared to a mid-range building. Providing high-end lifestyle amenities should not be the priority for building homes, targeted at the consumer segment earning Rs 30,000 to Rs 40,000 pm as they will be unable to afford the maintenance costs in such cases.” 

Anuj Puri, Chairman & Country Head, JLL India, says, “There is need for reforms for re-densification of cities (scrapping old redevelopment laws) along with augmentation of existing infrastructure as well as public transport. Improving infrastructure in peripheral areas and developing suitable connectivity to the cities’ business districts are needed, if these areas are to serve as a suitable living environment.”