Factors Affecting Housing Shortage in India

‘Factors Affecting Housing Shortage in India’ PROJECT FINANCE MANAGEMENT DIVISHA JINDAL MBEM II YR. SPA, NEW DELHI

‘Factors Affecting Housing Shortage in India’

PROJECT FINANCE MANAGEMENT

1.1

2010

INTRODUCTION: Housing in India varies greatly and reflects the socio-economic mix of its vast population. With modernization there is a small but growing section of nuclear families in urban areas. This rise in number rise in number of nuclear families is a growing trend and contributing well to the increase in housing shortage.

1.2 HOUSING SHORTAGE IN INDIA There is around 24.7 million-house shortage in India on an average (National Building Organization, NBO & NHHP 2007). Most of the shortage (99%) is for the lower income group (LIG) and economically weaker section (EWS) as per NBO and NHHP. “India is facing a shortage of up to 70 million residential units, as high economic growth and rapid urbanization spurred overall demand for housing”, says World Bank, in a report titled 'Expanding Housing Finance to the Underserved South Asia'. The report pointed out that it might be "commercially viable" in India to build housing units for 23-28 million households -- representing 35 to 45 per cent of country's urban population -- whose monthly household incomes are in the range of Rs 5,000-11,000. "High economic growth coupled with rapid urbanization and a rising middle class have created considerable demand for housing and housing finance in South Asia," World Bank said. Also, "According to the estimates made by the technical group constituted by the ministry for assessment of urban housing shortage at the end of the Tenth Five Year Plan, the total housing shortage in the country is 24.71 million," union minister for housing and urban Poverty Alleviation Kumari Selja informed Rajya Sabha in a written reply to a question. Further, an additional requirement of 1.82 million dwelling units has been projected for the 11th Plan, bringing the total housing requirement during the 11th Plan Period to 26.53 Million dwelling units.

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‘Factors Affecting Housing Shortage in India’

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1.2.1 Background The Housing and Building statistics are necessary for the formulation, execution and evaluation of housing policies and building programs which constitute an integral part of the overall social and economic plans of the country. At the central level, the National Buildings Organization (NBO), which is an attached office under Ministry of Housing and Urban Poverty Alleviation, is the only Organization which collects, maintains and disseminate the authentic data on housing and related infrastructure statistics. It also caters to the need of the planners, policy makers and researchers in the field of housing statistics. The housing and building statistics are also necessary for national accounts purposes. The data on urban households and housing stock from various Population Censuses are presented in the table given below.

The census data over the previous five decades reveals that the urban population has grown by 2.7 to 3.8% annually due to natural increase of population as a consequence of the birth rate being higher than the death rate; and migration from rural to urban areas in search of livelihood.

1.2.2 Housing condition in urban areas The 11th Plan document while examining the issue of magnitude of urban housing notes that the requirement of urban housing is linked to emerging pattern of growth of cities/towns, and also the present settlement status and quality which may require up gradation. Cities and towns which are growing at faster rate need to develop and deliver Divisha Jindal

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‘Factors Affecting Housing Shortage in India’

2010

a faster and greater supply of housing. The need for additional housing, for increasing poorer sections does not get translated in an economic demand due to non affordability by the Economically Weaker Sections (EWS)/Low Income Group (LIG) sections, thus leading to a sizeable number of urban population resorting to squatting on government/municipal lands, leading to creation of slums. The chronological situation of housing shortage is given below:

Housing Shortage Analysis in India Above table shows, that housing shortage in absolute number is not decreasing. i.e. existing gap in housing stock from 81, 91 to 2001 could not be filled up by conventional housing supply system. Whereas, housing shortage in urban areas is increasing. i.e. demand for new housing is growing at higher pace in urban areas and supply is not adequate.

Absolute housing shortage: Urban, Rural and Total Divisha Jindal

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Share of Population not having livable house: rural and urban Estimation of Urban Housing Requirements for the XIth Plan : The housing shortage for the previous census years (1961-2001) was worked out by National Building Organization (NBO) and the same for 2002 was worked out by the Working Group for the 10th Plan. The urban housing shortage from 1961 to 2002 as estimated by NBO & 10th plan working group is given in Table below: Urban Housing Shortage Year

Housing Shortage in Million D.Us

1961

3.60

1971

3.00

1981

7.00

1991

8.20

2002

8.89

Source: 10th Plan Document

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1.3 FACTORS AFFECTING HOUSING SHORTAGE IN INDIA: Housing shortage in India has been estimated on the basis of the number of households including homeless households, available housing stock, acceptable housing stock, aspects of congestion and overcrowding. The population census provides background information on households. Adopting a similar methodology as used in the 10th Plan Working Group Report, the primary housing shortage at the beginning of the XI Plan period i.e. 2007, has been estimated, by obtaining the difference between the projected number of households and the estimated housing stock. Assuming that the entire Kutcha housing stock needs to be upgraded to semi-pucca, these kutcha houses have also been included in calculating the shortage. In addition to this, the following factors have been considered: Congestion factor: The congestion factor is taken as 19.11% of the acceptable housing stock (pucca and semi-pucca) as per estimates of Technical Group on Estimation of Housing Shortage (2006). On this count, the additional housing required at the beginning of XI plan period is estimated to be 12.67 million units. Obsolescence factor: The obsolescence factor as per the estimates of Technical Group on Estimation of Housing Shortage (2006) is 3.60% of the acceptable housing stock and the total obsolete urban housing stock estimate is 2.39 million units. The total shortage at the beginning of the XI Plan has been estimated to be 24.71 million units, as can be seen from Table below. The quantum of Kutcha houses that needed up gradation is estimated to be 2.18 million.

Housing Shortage

As

on

2007

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1.Households (Mn)

66.30

2.Housing Stock (Mn)

58.83

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2.1 Pucca

47.49

2.2 Semi Pucca

09.16

2.3 Kutcha

02.18

3. Excess of HHs over Housing Stock

07.47

2010

(Mn) (1 – 2) 4. Congestion factor (%)

19.11

4.1Congestion in Hhs. (Mn)

12.67

5. Obsolescence factor (%)

3.60

5.1Obsolescence in Hhs. (Mn)

02.39

6. Upgradation of Kutcha (Mn) (2.3)

02.18

7. Total Housing Shortage (3+4.1+5.1+6)

24.71

Estimation of New Urban Housing units during XI Plan The Table shown below gives the estimation of new additions of Pucca, Semi-Pucca and Kutcha housing units during the XI plan period. The total new construction of pucca houses is estimated to be of the order of 6.00 million units and the up gradation requirement of semi-pucca houses and kutcha houses to pucca houses is of the order of 0.89 million and 0.38 million units respectively. Therefore, the total new additions to the housing stock during the 11th plan period are estimated to be 7.27 million units.

Total Requirement of Housing during the Eleventh Plan Period New Requirement

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Households - Pucca

6.00

- Semi Pucca

0.89

- Kutcha

0.38

Total Housing Stock

7.27

Estimation of Total Urban Housing Requirement during the XI Plan Period Combining the housing shortage at the beginning of the 11 th plan period and the additional requirements during the 11th plan period, the total requirement of urban housing during the XI Plan period (2007-2012) works out to be 31.98 million units as shown in Table below :

Housing Requirement during XI Plan Period

As on 2012

1.

Housing Shortage as on 2007 (Million)

24.71

2.

Households (Million)

75.01

3.

Pucca Houses (Million)

53.49

4.

Semi Pucca Houses (Million)

10.05

5.

Katcha Houses (Million.)

2.56

6.

Addition to households (Million.)

8.71

7.

Addition to housing stock

7.27

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‘Factors Affecting Housing Shortage in India’

8.

Up gradation of Katcha Houses (Million.)

0.38

10.

Additional requirement (Million.) (6-7+8)

1.82

11.

Total requirement (Million units)

26.53

2010

Thus it is estimated by the 11th Plan Working Group that taking the business as usual scenario, the total shortage of dwelling unit at the beginning of the 11 th Plan period i.e. 2007 will be 24.71 million units. The housing shortage during the plan period (20072012) including the backlog has been estimated to be 26.53 million units.

Key Issues in non-Achievement of Housing Supply in Public Plan & Policies Based on the study of performance during 5 year plans the key issues are identified as below and a marking has been done based on the analysis during the specific plan period. Major issues have been enumerated from 20 to 10 according to qualitative assessment during plan period. Accumulating the whole, speedier housing system and affordability resembles the most prominent issues, which need to be addressed.

Analysis of major issues and barriers in mass public housing delivery

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‘Factors Affecting Housing Shortage in India’

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CONCLUSION In the developing countries the housing problem are manifold and key factor in influencing quality living. The mainstream formal housing needs a faster production system of housing maintaining quality of houses and economy to overcome the huge shortage. Government’s role has been changed to enabler from provider during last couple of decades and that is reflected in national plans. Overall 12% household (H/H) do not have livable house. Existing housing supply mechanism could not fulfill only 15% on an average of total housing need per decade including the backlog and additional need for population increase. National Housing and Habitat Policy (NHHP) mentioned about the necessity of a faster housing supply and focused on prefabricated system built housing. Scope for appropriate prefabricated building system to fulfill the housing shortage in India must be reassessed in present context. The growing concentration of the people in the urban areas is an obvious thing, which is visible in the urbanization trend through out the world. On the other hand, a great portion of population lives in non-livable houses.

LIST OF REFERENCES 

Press Release on January 13, 2010 by the Press Information Bureau, Government of India



Report of the technical group [11th five year plan: 2007-12] on “Estimation of urban housing shortage”



Report of the 11th Five Year Plan (2007-12) Working Group on Urban Housing with Focus on Slums by the Government of India Ministry of Housing and Urban Poverty Alleviation



Research paper on Mass-Industrialized Housing to Combat Consistent Housing Shortage in Developing Countries: Towards an Appropriate System for India by Ar. Uttam K. Roy1, Dr. Madhumita Roy, Prof. Subir Saha

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