 "Govt should give priority sector to affordable housing: Anita Arjundas")
What steps should government take to convert the vision to reality and to boost the affordable housing?
The government should give priority status to affordable housing. If the vision of housing for all by 2022 is to be realised then it is important that the government streamlines the approval process and also reduces the total cost of ownership for the end user of affordable housing on an urgent basis if it is to encourage more developers to participate.
The industry is wary of this space because if lower margins are not accompanied by speed and therefore higher returns and the ability to build a business of scale, then the business becomes difficult to sustain at prices which are affordable to the intended target audience.
Across the country, the current estimated demand is 19 million housing units, which is expected to rise to 38 million by 2030. Out of these 18 million, 95 per cent falls under Economically Weaker Section (EWS) requiring Government intervention. Rest five per cent works out to 9 lakh homes where corporates can participate with an enabling environment.
Major bottlenecks are land acquisitions and government clearance for the real estate sector, especially affordable housing projects. Anand Mahindra, CMD of Mahindra Group, earlier suggested that the Government should look at models like JNNURM or other models, through which the Government can live land for a cheaper price, which will further bring down the cost of ownership. What is your view?
Land and approvals are State subjects and hence dependent on the pro activeness of each State.
Our view is that schemes like JNNURM that provide funding for urban regeneration with certain time bound caveats , example repeal of urban land ceiling act some years back, can be similarly used to drive time bound reforms in land and approvals for affordable housing
On rising costs of cement and other raw-materials.
Rising cost is a challenge and that is why it is so important to prioritise this sector for clearances, land availability and standardised and simplified development control rules across the country for affordable housing.
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Happinest has incorporated a lot of innovation in foundation and structural design, use of ready to fit components and modules to keep costs down and reduce dependence on labour while at the same time improving on execution speed.
Why did you choose Chennai to launch your first project?
Tamil Nadu is one of the most industrialised states in the country and also highly urbanised. Chennai as the capital city sees a fair share of this industrial investment and migration leading to high levels of urbanisation.
All of this means a large unmet demand for homes especially those that can be affordable to people working in factories, services sector etc.
Tell us more about the project.
Land area is 13 acres and number of units are 1200+. The project will be developed in two phases and will attract around Rs 200 crore investment.
Who is the target customer and what will be the pricing of flats?
People working in formal and informal sector with a monthly family income of Rs 20,000 to Rs 40,000. Pricing is between Rs 9.9 lakh and Rs 18.8 lakh.
Which are the next cities the company is looking at?
The second pilot will be in Maharashtra in the Mumbai Metropolitan Region.
Currently the focus is on the two pilots (Chennai and Mumbai), which put together will see investments of around Rs 350 crore.
How will the company fund the investments?
So far through internal accruals and will be funded through a combination of accruals and project cash flows
Are you open for partners/ investors?
At this stage the focus is on getting the business model right and we would therefore prefer to go it alone.
We will be focused on our learnings from these two pilots and may be open for investors at a later date.
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