The government’s recent Budget proposal for 100% deduction for profits for builders undertaking housing projects of 30 sq metres in metro cities and 60 sq m in other cities does not seem to have been well thought out. Though well-intentioned and aimed at attracting developers to the affordable housing segment to achieve the Housing For All target, the proposal could fizzle out because of one critical element – that of size.
Dwelling units of 30 sq m (around 450 sq ft) say housing experts, are too small for people to live in comfortably. Building such units would also not be feasible given the low density norms in most states.
The ideal limit should have been 60 sq m for all town categories for homebuyers to enjoy a minimum quality of life, say planners.
“Sustained policy support for empowering affordable housing delivery in India was clearly evident in this year’s Budget announcements. Such specific policy stimulus needs to be understood not only in the context of various supply side dynamics but also on how variations of development and density norms between states could have a bearing on actual affordable housing delivery,” says T Chakravorty, urban economist .
Getamber Anand, president, Confederation of Real Estate Developers’ Association of India (Credai), the umbrella body of the real estate sector, says that the biggest challenge before the sector is to lobby with states to increase density norms to be able to construct houses of 30 sq metre and 60 sq m.
The budget has also put the onus on real estate builders to finish houses within three years of starting work if they are to avail the exemption for affordable homes.”This would also be a challenge for us in the absence of single window clearances and considering the fact that environment clearances take the longest to come through,” Anand adds.
On the matter of size, Rohit Modi, director, Ashiana Homes Pvt Ltd, says it would be difficult to build 30 sq m units in Haryana. “Currently, it is not possible to construct a unit measuring less than 833 sq ft. To enable developers to construct 30 sq m units, the state government will have to relax density norms for affordable housing and even specify the minimum cost of the unit,” he says.
Welcoming the move for 100% deduction for profits, Sunil Agarwal, MD, Black Olive Ventures Pvt Ltd, feels the 30 sq m limit for metro cities is on the lower side. This should ideally have been in the range of 40 sq m to 45 sq m for the unit to be more livable for a family of four or five members.
So, how small would apartments of 30 sq m be? How many rooms could architects be able to fit in such units? Experts say in metros it would only be possible to build perhaps a 8 feet by10 feet bedroom, 10 feet by 15 feet living room, toilet and kitchen of 5 feet by 7 feet and a balcony. Apartments of this size are also likely to have low circulation space and no utility space, Agarwal says.
The limit of 60 sq m in Tier-II cities, however, would be of adequate size accommodating two bedrooms of 12 feet by 10 feet and living room of 12 feet by15 feet, besides one toilet and a kitchen of 5 feet by 7 ft each and a balcony. There is demand for such 1BHK and 2BHK houses in areas such as Dehradun, Nashik and Mysore, he says.
Low density norms would be a challenge for architects. Density restrictions in Ghaziabad for instance allow a maximum of 20 units on a plot size of 1,000 sq m (FSI 2.75), which means that if one were to factor in a maximum size of 30 sq m, the number of units will be 83 and not 20 (see box above). Car parking space will only push up costs.
The budget proposes that the units be built on plots of 1,000 sq m in Tier-I cities and 2,000 sq m in Tier-II cities.
“Our analysis shows that unless some states which have rigid density norms, less provision for group housing projects and parking norms do not modify the norms, the developers in these states may not be able to make use of these benefits,” Agarwal adds.
Going forward, even if states were to make changes in their byelaws to make this a reality, it is unlikely that the existing infrastructure will be able to cope with high density.