Affordable Housing Schemes

Unlocking Your Dream Home: Affordable Housing Schemes Made Simple

Though 'Affordable Housing in India' has been a term which is quite frequented by the populace now and again, it has seldom been used in its right sense. Most people associate the literal meaning to the actual usage formulated by the government and the financial experts. Thus the term Affordable Housing has a different meaning when used by the two sectors.

What is Affordable Housing?

The term refers to the low-cost shelters or housing units that are affordable by the low-income groups of the society whose income falls below the average household income. These units are usually developed by Governmental agencies that are funded under government-sponsored schemes.

Benefits

• It contributes to an improved quality of life by offering a safe, clean, and salubrious surrounding for residents.

• Building and sustaining affordable housing projects create employment opportunities and drive economic growth in the housing and allied industries.

• It bolsters the welfare, resilience, and economic advancement of individuals and communities, actively contributing to a more equitable and flourishing society.

However, the term when used by private developers means that the cost of their units falls under the current market prices.

To know more about the affordable range of apartments and other housing projects, Check out the Best Affordable Housing Projects in Bangalore 2020

Types of affordable housing schemes set by both the government as well as the private sector :

Governmental Sector

As the population of India continues to thrive against the odds, the lack of shelters for the section below the nominal classes is a serious issue that will drastically affect the entire economic environment of the nation.

Governmental Schemes are often incorporated by the state housing boards of the individual states and metros like DDA, MHADA, and BDA Housing schemes.

They specially focus on marginalized and vulnerable populations, such as individuals experiencing homelessness, or those with disabilities, to tailor affordable housing schemes to their unique requirements and circumstances.

Adoption of sustainability building practices encourages affordable housing projects, promoting environmental preservation. Affordable housing initiatives serve as a mechanism for governments to reduce social and economic inequalities by ensuring that housing options are within reach for individuals across diverse income brackets.

The World Bank through its Low Income Housing Finance (LIHF) project which was implemented across 17 states in India catered over 15,000 of the poor settled in Urban areas.

Types of Affordable Housing Schemes in India

1. Pradhan Mantri Awas Yojana

The Pradhan Mantri Awas Yojana is a flagship housing and rehabilitation scheme from the Government of India. In 2015 Prime Minister Narendra Modi launched the Pradhan Mantri Awas Yojana proclaiming housing for all by 2022, in which roughly 20 million houses will be constructed for the homeless. The scheme is further divided into two components depending on urban and rural regions of the country.

• PMAY fosters comprehensive development by granting economically disadvantaged segments of society access to high-quality housing, thereby enhancing their living standards.

• Ownership of a home through PMAY instills a feeling of societal protection and permanence within families.

• The scheme promotes the development of essential infrastructure in housing projects including roads, water supply, sewage, and electricity, contribute to an elevated standard of living.

2.Pradhan Mantri Awas Yojana Urban (PMAY U)

This scheme mainly caters to the urban areas of the country. It caters to bring affordable housing in India, especially for the poor who have settled in Metro cities as well as the slum-dwellers. The female head of the family must be the owner or the co-owner of the pucca houses built under the project. There are 4 base options to choose from this scheme-

"In Situ" Slum Redevelopment - Central Assistance of 1 lakh per house for eligible slum dwellers along with land acquisition from private partners.

Credit Linked Subsidy Scheme- Assistance up to 2.67 lakh and interest subsidies of 6.5 %, 4% and 3% for amounts of Rs 6, 9 or 12 Lakhs for economically weaker sections(EWS), Low Income Groups(LIG), Middle Income Groups ( MIG) I & (MIG) II.

Affordable Housing in Partnership- up to 1.5 Lakh per EWS house in the projects where at least 35% of the houses are reserved for the EWS category and the project has at least 250 houses.

Beneficiary-led individual house construction/enhancements (BLC)- EWS can have assistance up to 1.5 lakhs to develop a new house or enhance the existing one if they had not availed any other benefits under the scheme.

3. Rajiv Awas Yojana

The Government of India's Rajiv Awas Yojana, a large urban renewal program, aims to improve the lives of millions of urban slum residents.
Recognizing the predicament of these underprivileged people, the initiative aims to provide affordable housing options while also improving general living conditions in slums around the country.

RAY follows a public-private partnership approach, encouraging collaboration among government agencies, local governments, and commercial developers. This technique tries to speed up the creation of affordable housing projects in slum regions. RAY promotes the development of new housing units, the rehabilitation of existing slums, and the supply of basic services such as water, sewage, and power through financial assistance, technical support, and land improvements.

4. Delhi Development Scheme

The Delhi Development Scheme, a key feature of Delhi's urban landscape, is a comprehensive program launched by the Delhi Development Authority (DDA) to provide affordable housing alternatives to the city's growing population. This ambitious plan aims to solve the urgent demand for affordable housing in the nation's capital, ensuring that every person has access to a decent and affordable place to live.

The Delhi Development Authority (DDA), a statutory agency responsible for Delhi's development and planning, has played an important role in implementing the Delhi Development Scheme. The DDA has created a number of housing developments throughout the city under this initiative, catering to various income levels and demands. These developments comprise high-rise flats, group housing societies, and independent houses, providing a varied range of housing options to meet the preferences of different residents.

5. Maharashtra Affordable Housing Mission

The Maharashtra Affordable Housing Mission is a state-level effort that aims to address Maharashtra's housing crisis. Recognizing the growing demand for affordable housing, particularly in metropolitan areas, the purpose aims to encourage the creation of sustainable and accessible housing solutions for low- and middle-income people. The mission's goal is to enhance the supply of affordable housing units across the state through a variety of techniques, including subsidies, incentives for private developers, and collaboration facilitation. It strives to improve inhabitants' quality of life, prevent urban sprawl, and promote equitable economic growth.

6. Karnataka Housing Board

The Karnataka Housing Board (KHB) is a state government body that provides affordable housing alternatives throughout Karnataka. The KHB seeks to provide excellent and affordable housing for people of all economic levels. The board produces a variety of housing options, including group dwellings, private plots, and resettlement colonies. The KHB also offers financial help to eligible clients through subsidized house loans and other programs. The board focuses on providing affordable housing in cities, although it also includes projects in rural areas. The KHB plays an important role in satisfying the housing demands of Karnataka's rapidly growing population.

Also check out: Major Housing Schemes in Karnataka

7. Haryana Housing Board

The Haryana Housing Board, a state-run body, is a cornerstone of Haryana's affordable housing. Its principal objective is to provide Haryana citizens with affordable and high-quality housing options, particularly for those from families with low incomes.

To achieve this purpose, the Board provides a variety of housing options, such as group housing schemes and individual plots. Group housing plans offer well-planned residential complexes with needed utilities, whereas individual plots allow you to create a home based on your preferences. The Board's commitment to affordability ensures that these housing options are accessible to a wide spectrum of individuals and families.

8.Pradhan Mantri Awas Yojana Rural (PMAY-R)

Pradhan Mantri Awas Yojana Rural is devoted to the rural regions in the country except for Delhi and Chandigarh. Central Assistance up to 1.2 lakhs in plain areas and 1.3 lakhs for hilly areas. House sizes as of now are to be increased from 20 sqm to 25 sqm and every house will have a toilet. The beneficiary will get 90 days of unskilled labour from MGNREGA.

How to get affordable housing schemes in India through Pradhan Mantri Awas Yojana ?

The eligibility criteria to avail PMAY is as follows-

The beneficiary should be a family comprising of parents (husband & wife) and unmarried children.

They should not own a pucca house, however, beneficiaries who possess a house under 21 sqm are also considered.

An adult earning member irrespective of marital status is also eligible

EWS category of beneficiaries is eligible for Assistance in all four verticals of the

Missions whereas LIG/MIG category is eligible under only CLSS component of the Mission

The sections who can avail Pradhan Mantri Awas Yojana are as follows -

1. EWS (Economically Weaker Section) - Families whose annual income is lesser than Rupees 3 lakh.
2. LIG ( Low Income Group) - Families whose annual income is between Rupees 3 and 6 Lakhs.
3. MIG - (Middle Income Group)-
a) MIG I -Families whose annual income falls between Rupees 6 and 12 Lakhs.
b) MIG II- Families whose annual income falls between Rupees 12 and 18 Lakhs.
4. Scheduled Castes, Tribes and Other Backward Classes (OBCs).

Private Sector

The private realtors and developers are also attracted to the league of building affordable homes. Apart from social responsibility, they too have realized that only by addressing the housing needs of the middle class and lower-income classes can the real estate industry thrive.

Affordable houses or apartments are usually compact compared to the mainstream projects and won't feature the same kind of amenities the later offers. The private sector usually caters to the same in Indian cities rather than the suburbs or the rural areas. However, in South and East Bangalore, affordable housing has gained prominence due to the more cost-effective land prices and the accessibility of land parcels for development.

The private sector developers are allowed to build affordable homes for the MIG and the LIG classes at reasonable rates. Along with easier housing finance options and the Pradhan Mantri Awas Yojana in place, this proves to lighten the load for the median income groups. As for the developers, this is a huge boost to the real estate sector.

Also, the Developers of Affordable Housing have access to cheaper sources of funding including external commercial borrowings (ECB’s). Developers will also get an extension of a year to pay tax on notional rental income on completed but unsold units. The tenure for long-term capital gains for affordable housing schemes has been revised from 3 to 2 years. However, the deadline for project completion is increased to 5 years from the current 3 years.

The above mentioned are the types of affordable housing schemes in India which are undertaken by both the public and private sector. Affordable Housing is one of the major factors that will influence the real estate sector as it affects both the private and public sectors. The current trends sound comforting to a large part of our citizens who are homeless, however, "red tape" often enters the scene as the villain. The government should also ensure that the beneficiaries are benefited from this endeavor and affordable housing in India should no longer be a distant dream.

Here's a breakdown of recent updates on affordable housing schemes and what to expect in the near future:

New Scheme on the Horizon:

There's some excellent news for potential homebuyers! Latest reports suggest the government might be on the verge of announcing a new credit-linked subsidy scheme targeted at affordable housing in urban areas. We can expect an official announcement soon featuring specifics about eligibility and incentives, especially with the Lok Sabha elections fast approaching.

Focus on Middle Class:

The government offered some relief to middle-class homebuyers in Budget 2024. With the extension of the Section 80EEA deduction, the budget offers an additional 1.5 lakh Rupees in tax benefits related to home loan interest. This can significantly reduce your tax liability and increase the financial viability of homeownership.

PMAY-U Still Ongoing:

The Pradhan Mantri Awas Yojana - Urban (PMAY-U) remains the cornerstone of the government's affordable housing mission. With specific carpet area allowances and subsidy benefits for economically weaker sections (EWS), low-income groups (LIG), and middle-income groups (MIG), this scheme caters a range of income groups. If you're looking for an affordable home in an urban area, exploring PMAY-U is a great starting point.

What to Look Out For:

Details of the New Scheme:

As of April 2024, specifics of the new credit-linked subsidy scheme are yet to be announced. Keep an eye on official government channels for details on eligibility criteria, subsidy amounts, and targeted beneficiary groups.

State-Specific Initiatives:

Several state governments have their own affordable housing schemes alongside PMAY-U. Research these schemes if you're looking for an affordable home in a specific location.

Well, now that you know about the recent updates, explore affordable flats in bangalore.

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