Cabinet Approves Affordable Rental Housing Development

Cabinet Approves Affordable Rental Housing Development
Jul 2020 , by , in Latest News, News/Views

The Union Cabinet chaired by the Prime Minister, Narendra Modi has given its approval for developing of Affordable Rental Housing Complexes (AHRCs) for urban migrants as a sub-scheme under Pradhan Mantri Awas Yojana – Urban (PMAY – U).

ARHCs will have a two-pronged approach:

First, existing vacant government-funded housing complexes will be converted in ARHCs through concession agreements for 25 years. The concessionaire will make the complexes livable by repair & maintenance of rooms and filling up infrastructure gaps like water, sewer/ septage, sanitation, road etc. States/UTs will select concessionaire through transparent bidding. Complexes will revert to ULB after 25 years to restart next cycle like earlier or run on their own.

Second, special incentives like use permission, 50% additional FAR/FSI, concessional loan at priority sector lending rate, tax reliefs at par with affordable housing etc. will be offered to private/ public entities to develop ARHCs on their own available vacant land for 25 years.

An expenditure of Rs 600 crore is estimated in the form of a technology innovation grant, which will be released for projects using identified innovative technologies for construction. More than 3.5 lakh beneficiaries will benefit from ARHCs.

The scheme was announced by Finance Minister Nirmala Sitharaman as part of the Rs 20 lakh crore economic package to deal with the COVID-19 pandemic. The scheme is targeted at migrant labourers and the urban poor employed in the industries, service sector and manufacturing sector and would provide planned housing close to their workplace in industrial as well as in non-formal urban sectors.

A large part of the workforce in manufacturing industries, service providers in hospitality, health, domestic/commercial establishments, construction or other sectors, labourers, and students who come from rural areas or small towns seeking better opportunities will be the target beneficiaries under ARHCs.

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