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Housing policy is losing the plot

We need to home in on an effective regulator if more people are to get a roof over their heads.

india Updated: Jan 22, 2009 20:41 IST
Hindustan Times

Widespread skullduggery has accompanied most recent lotteries of subsidised housing in the National Capital Region. Often the exercise is counter-productive, blocking the available supply of housing stock in drawn-out litigation. On the other hand, demand is threatening ecologically vulnerable patches from the Yamuna riverbed to the Aravalli Hills, in brazen defiance of the courts. Remedies the city-state and its neighbours contemplate to curb recurrent housing scams devolve on improving policing within the conventional house allotment framework. They, however, ignore at their peril the successes notched up in sectors as disparate as telecommunications and aviation, where the simple act of decoupling the regulator and the service provider has led to explosive growth in both telephone usage and flying.

The goal of affordable housing would be better served if the administrators of Delhi, as also any other city in India, limit their role to freeing up more land for construction. Private players, under effective regulation, have demonstrably superior abilities to scale up housing stock to accommodate the organic growth of India’s cities as well as migration. The local government’s role here is fairly well-defined: enlarge the pool of land available for housing, ensure fair play, and provide the attendant urban infrastructure and services. Staying ahead of projected demand in the floor space index is the most enduring tool for keeping house prices low. An explicit subsidy for the poor through tax waivers and direct cash transfers has far greater chances of reaching their target than tainted lotteries.

India’s cities currently produce 63 per cent of its national income and this is expected to climb to 75 per cent by 2021. Less than one in three Indians lives in a town, but this is already exerting a terrific strain on our urban infrastructure, principally housing. With incomes polarising as we speak —Bihar’s per capita income is a sixth of Delhi’s — the pressure of migration will require the provision of housing on a scale much larger than what the State can handle. Our policymakers seem to have woken up to the fact, yet the architecture needed for a competitive, well-regulated market for urban housing is still on the drawing board. The keystone, a national housing regulator, is nowhere in sight. The grim reality that is city life anywhere in India will keep throwing up more scams so long as we refuse to confront the big picture.

First Published: Jan 22, 2009 20:40 IST