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The immediate benefit that the affordable housing sector can have post getting the infrastructure status is relaxation of lending norms to these real estate companies.
According to Shampa Ghose, Managing Partner, BGA Realtors, currently, the developer of an affordable housing project is required to comply with a long list of regulations, similar to a mid or high-income housing project in city limits. These add to costs and time delays that make the project in current framework unviable.
“With the infrastructure structure in place, banks would come forward to finance such projects and companies would be in a position to pass on the lower cost of construction to the consumers,” Ghosh said.
With the cost of land and construction costs increasing exponentially, it is important to gain access to lower cost of funds.
“Companies with access to ECBs could now be willing to participate in such projects. This apart, the relaxation of FDI policy also bodes well,” she pointed.
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