Despite the availability of finances, affordable housing in the country is suffering from supply constraints, R.V. Verma, Chairman and Managing Director, National Housing Bank (NHB), has said.
Unofficially, homes priced between Rs 5 lakh and Rs 12 lakh are called “affordable housing”. These are categorised into lower-income-group (LIG) and economically weaker section (EWS) houses.
According to Verma, developers’ focus has primarily been on the middle income and high income group homes. As a result, while housing finance companies were ready to help low income households, supply of such homes is restricted.
“I believe that they (developers) have not build the right business model yet. That needs to be done as soon as possible,” he said while speaking at Bengal Leads, a three-day conference on urban infrastructure, organised jointly by the Confederation of Real Estate Developers’ Association and the West Bengal Government.
According to Verma, urban housing shortage is estimated at nearly 18 million units (with 95 per cent in LIG and EWS categories). Despite the builder community being well geared to cater to the needs of affordable housing, they fail to do so because of lack of confidence with the policy makers. He said developers’ hoping for a scaling down in interest rates was “unrealistic” and instead, they should opt for interest subsidy schemes of the Centre and state.
FUND RAISING
Meanwhile, speaking to Business Line on the sidelines of the programme, Verma said that the NHB was looking to raise nearly, $300 million (Rs 1,500 crore) from the World Bank. A final decision in this regard is expected by March 31.
The loans will help low-income households by way of credit to HFCs on the condition that it is used only to build houses. NHB, the apex bank for regulating and supervising housing finance companies, will raise nearly Rs 6,500 crore by the end of June next year. The amount will be raised through tax free bonds and rural housing funds, Verma said. It has already raised Rs 8,000 crore so far this fiscal. NHB follows the July-June accounting year.