Industry Welcomes AHRC For Urban Migrants
The Union Cabinet has approved development of Affordable Rental Housing Complex for migrant workers and urban poor as a sub-scheme under the Pradhan Mantri Awas Yojana. As part of the scheme, existing vacant government-funded housing complexes will be converted into Affordable Rental Housing Complex.
Dr. Niranjan Hiranandani President, NAREDCO said, “A significant move, this will create an urban ecosystem providing affordable rental housing at to urban migrants/poor. The first advantage from this will be proper habitat and living facilities for migrant labour, much needed to restart the urban economy, be it manufacturing or service providers. The second advantage will be in form of optimum usage of existing government funded vacant housing stock. Third, investment under ARHCs has potential to create new job opportunities. Fourth, the scheme creates an environment conducive for corporates to develop AHRCs on own vacant land, which will create new investment opportunities as also promote entrepreneurship in rental housing sector.”
“The scheme is clearly an attempt to bridge the shortfall of dwelling units across the country. All states will also be asked to develop such products and encourage private partnerships. However, low yields are likely to be a major deterrent for attracting private participation. Even while funding for such projects is said to be given at concessional rates, it may still be unviable for developers who have bought land within city limits at steep prices earlier on. Even while the government has tried to address these deterrents and provide benefits and incentives, we will have to wait and watch and see how this move can mobilise the interest from the industry. ” Anuj Puri, Chairman – ANAROCK Property Consultants.
Ashoo Gupta, Partner, Shardul Amarchand Mangaldas & Co on developing of Affordable rental housing Complexes expressed, “For affordable rental housing to be delivered in a timely and cost-effective manner, the process of getting approvals and permits requires to be streamlined. Government requires providing a range of protections for renters including rent increases being limited to a specified percent e.g. 5% over 3 years, minimum maintenance standards and regulations to ensure security of tenure.”
“Alternate real estates assets like rental housing and ARHC by the Govt offers a more economical alternative to outright purchase, where the consumer appetite is currently low. The other short term measures which could help reduction in costs thereby boosting demand are flexible payment plans, reduction in stamp duty and easy installments, abatement in property tax, extending income tax benefits on housing mortgage payments, reduction/ input benefits on GST on construction, initiating contractual savings scheme for housing and mortgage insurance. These measures, moulded as per the end-user, will go a long way to buoy the segment.” shared Nimish Gupta, MD, RICS South Asia.