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Sample images of a pilot project

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AFFORDABLE HOUSING A White Paper

Phani RamV.P. (Arch)20th April 2011

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CONTENTS:

Part I - Definition of Affordable House

Part II - The Landscape of Affordable Housing

Part III – Technology

Part A – Low Cost Concept

Part B – Green Building Concept

Part C – Specifications

Part IV - Financing Options

Part V - Players in the market

Part VI - Case Illustration

References

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Part I - Definition of Affordable House (extract from JNNURM):

Keeping in mind that the housing shortages affect mostly the EWS and

LIG and the younger group of urban-urban migrants changing cities in search of

better prospects, affordable houses, for the purpose of this scheme, may be taken

as houses ranging from about 300 square feet (super built up area) for EWS, 500

square feet for LIG and 600 square feet to 1200 square feet for MIG, at costs that

permit repayment of home loans in monthly installments exceeding 30% to

40% of monthly income of the buyer. In terms of carpet area, an EWS

category house would be taken as having a minimum 25 square meters of carpet

area and the carpet area of an LIG category house woul limited to a maximum

of 48 square meters. The carpet area of an MIG house would be limited to a

maximum of 80 square meters.

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Part II – The Landscape of Affordable Housing

The Opportunity

Affordable Housing industry in India is poised to grow significantly in the coming years as demand is rising and a clear short supply exists in this niche segment. This high-volume, low-margin business is bubbling with interest as urbanization increases and microfinance institutions help support homebuyers. The National Housing Bank expressed that s nce 2007, there has been a 20 percent compounded annual growth rate in the total amount of loans disbursed to the low-cost housing segment in urban India. And still, demand outweighs supply, as the country is facing a whopping shortage of 24.7 million low-cost homes.

( next mega market, HashishKaramchandani, Monitor, July 6, 2010)

The Customer

Wage earners, service providers, construction labour, illed and unskilled workers earning Rs.10 to 15,000 per month are the prime focus for this market segment. Typically, these residents of Tier I and Tier II cities live in slums, high dense core areas or peripheral areas with rents averaging about 40% of their monthly incomes. Also, they commute about 2 – 3 hours per day to and from work. They do not file income tax returns, nor pay service tax. With monthly incomes < Rs.12,000, the eligibility for home loans from nationalized banks is difficult to impossible.

The requirement to be fulfilled

This urban working class, which makes up the bulk of urban population, needs to be provided with good housing solution, preferably, homes which they can afford to buy with loans that can be amortized over 20 year tenures. Along with good housing facilities, they also need hospice care, education for their children, entertainment, water supply, sanitary & electricity services, proximity to transportation facilities and salubrious unity living. Approximately 55% of urbanites fall under mont ly income of Rs.10 to !5,000 ( in many cases combined income of both couple) who are striving for improving their conditions.

The Proposal

For Affordable Housing to be successful, it is necessary to plan large scale mass housing, preferably high rise, designed with complete planning standards, competent engineering services, energy efficient concepts, sustainable habitats and timely delivery of projects.

“… it was only recently that India Inc. realized that housing for people with low income is a large, untapped, and very profitable market … the market for houses costing Rs. 3 - 10 lakh is worth some Rs 11 lakh crore with an unmet demand of 21 million households (each, on an average, costing Rs 5.25 lakh). This is bigger than the traditional higher end housing market (houses costing Rs 25 lakh and above)...” India’s

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Additional benefits:

Aside from the crunching need to fulfill the demand for this niche market, Affordable Housing satisfies a host of related social and economic concerns as illustrated below:

Affordable Housing

Aiding Overall Economic Development

Construction of low income housing provides disproportionate job creationCreates significant economic value for state (taxes, ancillary economic activity, source of labor potentially leading to industry, etc.

Provide alternative to Urban Slums~40M people live in urban slums without basic facilities such as sanitation, water, schools, etc.Renters disempowered. All power is w/ slum lordsSlum lords “own” houses and benefit from Slum Rehabilitation SchemesSlums create high pressure on infrastructure within a city

Benefits for families of Urban PoorHousing is essential for the well-being of a familyEnhanced security and health through organized housing with access to sanitationAccess to better services (schools, healthcare etc.) which are typically available to higher-income groups

Creation of Low-Risk Asset for Families

Long term wealth creation due to value of asset, “saving on rent” & collateral for loanA “security net” in crisisLow income houses typically built on land with low cost per sq. ft. Low likelihood of price depreciation, Hence downside risk is low

Benefits to CommunitiesNeighborhoods with good quality housing have lower crime rates, stronger local economies and a better overall quality of life

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Part III – TECHNOLOGY:

Part A – Low Cost Concept

i) Low Rise Buildings:

A good Affordable Housing project can be put together by adopting concepts hitherto popular as Low-Cost Housing practices, combined with energy efficiency, sustainability and good MEP engineering pr tices. The need for seismic design is unquestionable. Overall, the approach towards Affordable Housing should be one of sturdy buildings combined with sound engineering practices, resulting in healthy living conditions.

Affordable Housing is closely knit with concepts of Lo Cost Housing since it is imperative to keep the cost of construction low. Low Cost Housing concept which deals with effective budgeting and implementing techniques which help in reducing the cost of construction through the use of locally available materials along with improved skills and technology without sacrificing the strength, performance and life of the structure. There is huge misconception that low cost housing is suitable for on y sub-standard works and they are constructed by utilizing cheap building materials of low quality. The fact is that Low cost housing is done by oper management of resources. Economy is also achieved by postponing finishing works or implementing them in phases.

The building construction cost can be divided into two parts. The material cost which is about 65 to 70 % and labour cost which is about 30 to 35 %. Now in low cost housing, building material cost is less because we make use of the locally available materials and also the labour cost can be reduced by properly making the time schedule of our work. Cost of reduction is achieved by selection of more efficient material or by an improved design.

The techniques used for low rise buildings are different from those used for high rise buildings.

Following construction practices, albeit, used in several low cost projects over the years and accepted as common knowledge, is enumerated here below only as a compendium, although not an exhaustive one.Areas from where cost can be reduced are:-1) Reduce plinth area by using thinner wall concept. e.g. 15 cms thick solid concrete block wall.2) Use locally available material in an innovative for ike soil cement blocks in place of burnt brick.3) Use energy efficiency materials which consume less energy like concrete block in place of burnt brick.4) Use environmentally friendly materials which are su tute for conventional building components like use R.C.C. Door and window frames in place of wooden frames.5) Preplan every component of a house and rationalize the design procedure for reducing the size of the component in the building.6) By planning each and every component of a house the wastage of materials due to demolition of the unplanned component of the house can be avoided.7) Each component of the house shall be checked to see if it’s necessary and if it is not necessary, then that component should not be used.

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Cost reduction through adhoc methodsFoundationNormally the foundation cost comes to about 10 to 15% f the total building and usually foundation depth of 3 to 4 ft. is adopted for single or double store building and also the concrete bed of 6?(15 Cms.) is used for the foundation which could be avoided. It is recommended to adopt a foundation depth of 2 ft.(0.6m) for normal soil like g avely soil, red soils etc., and use the un-coursed rubble masonry with the bond stones and good packing. Similarly the foundation width is ration lized to 2 ft.(0.6m).To avoid cracks formation in foundation the masonry shall be thoroughly packed with cement mortar of 1:8 boulders a stones at regular intervals. It is further suggested adopt arch foundation in ordinary soil for effecting reduction in construction cost up to 40%.This kind of foundation will help in bridging the loose pockets of soil which occurs along the foundation. In the case black cotton and other soft soils it is recommend to u er ream pile foundation which saves about 20 to 25% in cost over the conventional method of cons ruction.PlinthIt is suggested to adopt 1 ft. height above ground lev l for the plinth and may be constructed with a cement mortar of 1:6. The plinth sl b of 4 to 6? which is normally adopted can be avoided and in its e brick on edge can be used for reducing the cost. By adopting this procedure the cost of plinth foundation can be reduced by about 35 to 50%.It is necessary to take precaution of providing impervious blanket like concrete slabs or stone slabs all-round the building for enabling to reduce erosion of soil and thereby avoiding exposure of foundation surface and crack formation.WallingWall thickness of 6 to 9? is recommended for adoption in the construction of walls all-round the building and 41/2 ” for inside walls. It is suggested to use burnt bricks which are immersed in water for 24 hours and then shall be used for the wallsRat – trap bond wallIt is a cavity wall construction with added advantage thermal comfort and reduction in the quantity of bricks required for masonry work. By adopting this method of bonding of brick masonry compared to traditional English or Flemish bond masonry, it is possible to reduce in the material cost of bricks by 25% and about 10to 15% in the masonry cost. By adopting rat-trap bond method one can create aesthetically pleasing wall surface and plastering can be avoided.Concrete block wallingIn view of high energy consumption by burnt brick it is suggested to use concrete block (block hollow and solid) which consumes about only 1/3 of the energy of the burnt bricks in its production. By using concrete block masonry the wall thickness can be reduced from 20 cms to 15 Cms. Concrete block masonry saves mortar consumption, speedy construction of wall resulting in higher output of labour, plastering can be avoided thereby an overall saving of 10 to 25% can be achieved.Soil cement block technologyIt is an alternative method of construction of walls using soil ment blocks in place of burnt bricks masonry. It is an energy efficient method of construction where soil mixed with 5% and above cement and pressed in hand operated machine and cured well and then used in the masonry. This masonry doesn’t require plastering on bo h sides of the wall. The overall economy that could be achieved with the soil cement technology is about 15 to 20% compared to conventional method of construction.

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Doors and windowsIt is suggested not to use wood for doors and windows and in its place concrete or steel section frames shall be used for achieving saving in cost up to 30 to 40%.Similiarly for shutters commercia ly available block boards, fibre or wooden practical boards etc., shall be used for reducing the cost by about 25%.By adopting brick jelly work and precast components effective ventilation could be provided to the building and also the construction cost could be saved up to 50% over the window components.Lintels and ChajjasThe traditional R.C.C. lintels which are costly can be replaced by brick arches for small spans and save construction cost up to 30 to 40% over the traditional method of construction. By adopting ar hes of different shapes a good architectural pleasing appearance can be given to the external wall surfaces of the brick masonry.RoofingNormally 5?(12.5 cms) thick R.C.C. slabs is used for roofing of residential buildings. By adopting rationally designed in-situ construction practices like filler slab and precast elements the construction cost of roofing can reduced by about 20 to 25%.Filler slabsThey are normal RCC slabs where bottom half (tension) ncrete portions are replaced by filler materials such as bricks, tiles, cellular concrete blocks, etc. These filler materials are so placed as not to compromise structural strength result in replacing unwanted and nonfunctional tension concrete, thus resulting in economy. These are safe, sound and provide aesthetically pleasing pattern ceilings and also need no plaster.Jack arch roof/floorThey are easy to construct, save on cement and steel, e appropriate in hot climates. These can be constructed using compressed earth blocks also as alternative to bricks for further economy.Ferro cement channel/shell unitProvide an economic solution to RCC slab by providing 30 to 40% cost reduction on floor/roof unit over RCC slabs without compromising the strength. These being precast, construction is speedy, economical due to avoidance of shuttering and facilitates quality control.Finishing WorkThe cost of finishing items like sanitary, electricity painting etc., varies depending upon the type and quality of products used in the building and its cost reduction is left to the individual choice and liking.

The above list of suggestions for reducing construction cost is of general nature and it varies depending upon the nature of the building to be constructed, budget of the owner, geographical location where the house is to be constructed, availability of the building material, good construction management practices etc. However it is necessary that good planning and design methods shall be adopted by utilizing the services of an experienced engineer or an architect for supervising the work, thereby achieving overall cost effectiveness to the extent of 25% in act al practice.

ii) High Rise buildings

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Low Cost concepts enumerated above, although being used in many projects, are largely efficient in low rise constructions (G + 3 Floors). However, if mass housing has to be provided with high rise structures, the following formwork tech s and infill wall methods may be used, in order to result cost effective projects. Many builders are already using several of these in various projects.

MasconThe Mascon Construction System is used for forming the cast-in-place concrete structure of a building. Developed in t late 1970s by WJ Malone, a Canadian engineer, the Mascon System has been used extensively throughout the world. It is fast, simple, adaptable and very cost effective. The System is most effective when combined with loadbearing wall structural design. The Mascon System is unique because it forms all of the concrete in a building including; walls, floor slabs, columns, beams, stairs, window hoods, balconies and various decorative features in exact accordance with the architect’s design. The System consists of hundreds of hand held pieces of formwork equipment, manufactured to fine tolerances. The majority of the equipment is comprised of panels while the rest includes vertical and horizontal corner sections, bulkheads and special floor slab beams that can be dismantled without disturbing the props supporting the floor slab concrete.Ninety-nine percent of the Mascon equipment is made of aluminum, the other one percent is steel. Unlike other construction systems, the use of aluminum allows the larger components to be big enough to be ef ctive, yet light enough (less than 30 kg) to be handled by a single worker. Consequently, the need for cranes or other heavy handling equipment is eliminated. All of the individual pieces of equipment are joined by simple steel pins and wedges and the only tool required in assembly is a hammer. This eliminates the need for skilled workers.The Mascon formwork can be used to form both concrete structural designs – i.e. traditional RCC frame design or loadbearing wall design.

MFE Formwork Technology (Mivan)MFE Formwork Technology (formally known as Mivan Far East) is a revolutionary aluminium formwork construction system, which has been used quite extensively in India. Using this unique formwork, all walls, floor slabs, columns, beams, stairs, balconies, together with door and window openings are cast in place in a single site based operation. The resulting building structure is very strong, accurate in dimensions and tolerances, with a high quality of finished concrete surface. It is fast, adaptable and very cost effective.MFE Formwork makes use of concrete as the principal building material for the prime reasons of cost and accessibility. It can construct all type of concrete structures.The basic element of MFE Formwork is the panel which is a framework of extruded aluminium sections, welded to an aluminum sheet. This produces a lightweight panel with an excellent stiffness to weight ratio, yie ding minimal deflections under concrete loading. Panels are manufactured in standard sizes with non-standard elements produced to the required size and sh o suit the project requirements. The panels are made from a high strength aluminium alloy, with the face or contact surface of the panel, from 4mm thick plate, which is welded to a framework of specially designed extruded sections, to orm a robust component. As MFE Formwork can be reused over 250 times, the initial cost appears high; however the ul imate cost per sft of forming area is less when compare to traditional methods.

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PASCHALThe Paschal Group, specializing in concrete formwork, shoring systems and formwork design software globally, has recently opened their first distribution and production facility in India. Its production company, Paschal Form Work in Visakhapatnam, concentrates on products such as the Modular universal formwork as well as the innovati e modular slab formwork E-Deck with steel frame, which can also be used on building sites that have no crane. With the modular slab formwork E-Deck, Paschal presents a particularly robust product, specially designed for use on building sites where no crane is available and, furthermore, can be used everywhere where aluminium should not be used. The frame of the new elements is made from profiled steel and, with a height of 7.5 cm provides very good grid compatibility and flexible application options, for transportation as well as for installation. The facing of the formwork consists of a 9-layer, 12 mm thick sheet of birch plywood, so that the ght of the individual elements is a maximum 20 kilograms and can be used with no problem without a crane. The E-Deck has the advantage that damage to the frame can be repaired, which is not possible on comparable aluminium products. Panel slab formwork has an advantage over flex-formwork that the panels are protected and more durable. Because the panels are attached to one another, as opposed to flex-formwork, they are considerably safer.

PERIOne of the biggest names in the industry, Peri provides innovative formwork and scaffolding systems. With 55 subsidiaries and over 100 large logistical locations around the world, Peri operates in over 70 national markets.The company offers Uno Monolithic Housing Formwork which is used for monolithic construction method. The Uno formwork is predominantly used for residential housing development and similar, whereby large numbers of residential units with identical dimensions are extended horizontally and vertically.All Uno elements, girders and stopend plates are made of aluminium and weigh a maximum 23 kg/m². This means problem-free forming can be done manually. It is very easy to assemble. A hammer is sufficient when working with Uno.Thanks to the new mechanism, the wall formwork element n easily be dismantled even with slab formwork elements still installed. After dismantling the Spacer Clamps, the wall element is simply unscrewed from the wall/slab transition area. The transition to the horizontal formwork is flexibly designed so that striking can be easily carried out in this area as well.The design of the slab formwork as drophead formwork allows early striking to take place – usually after only one day. For setting of stopends and box-outs, Uno Stopend Plates are available, which are adapted to the wall thicknesses in 1 cm increments. In addition, the integrated toothed rack of the shuttering strip absorbs the concrete load and thus replaces the formwork tie.

MOLADIThis plastic concrete formwork system, for low cost ho ovides and assists with the full range of requirements involved in the transfer and use of a proven low construction cost housing tech y.One of the important principles under a lean production paradigm is termed ‘lean as This refers to simplifying the process of assembly through industrialisation, modularisations, standardisation, and continuous flow processes. The reduction of operations required for a

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production process means less chance of the occurrence of errors, waste and rework. This follows from the same logic that the fewer the number of operations, the higher the quality of the product and a predictive timeline, resulting in cost savings.

THE MOLDThe patented PUJOL-BARCONS System places a new technology for the construction of complete buildings in a day within your reach.The construction system consists of a group of integrated lements which allows for the industrialized construction of buildings using a mechanized, rationalized and mass-produced procedure. Controlled by measuring templates, special tools, complementary accessories, scaffolding and safety walkways, they constitute a sys em making the MOLD fast, safe and with the highest quality of work.

The MOLD is a group of metal panels, manufactured to a ten a millimeter, which allows for the assembling and dismantling the perimeter walls, interior partitions, stairs, ceiling/floor slabs, roofs, installations and all types of details integrated in the actual formwork (chimneys, parapets, brick molds, etc.) in a single day, without onstraints to architecture or design.

The MOLD can be simple, duplex, triplex or fourplex meaning that it is possible to make one, two, three or four units at a time in a day. Once the MOLD is assembled, it is single cast, achievi g what is called the complete unit at grey work stage, which represents between 60 and 75% of the whole construction, depending on the type o structure to be built. Subsequent to its dismantling the next day, and to completely finishing the building, the following construction tas uted: paving, tiling, interior and exterior carpentry, painting and installation of the appliances, taps and fixtures and electrical systems. he sequence of assembling, casting and removing forms is ated daily to achieve a production pace of 1 unit at shell-and-core stage per mold per day.The industrializing of the process and the mass production method of construction result in a schedule of project delivery that meets deadlines, achieves perfect cost control, as well as superior qua y of building work and shorter completion times than those achieved with any other building method, -traditional or prefabricated.

Fabtech Sterling:Easy Build by Fabtech Sterling is a fast and simple method to build long lasting quality homes. All designs are made from two simple components namely plank and post. This system can be smooth jointed inside and out. It is cost effective in socialized and low cost building marketsFabtech Plaswall™ is a range of custom-manufactured modular walls which can be made at a movable factory at site and suit any design or architectural requirement. It is a fast, hassle-free, hygienic and economical, pre-engineered and pre-fabricated modular load-bearing construction system. From light weight concrete systems to thermally insula ed walls especially designed for hot and cold climates, this patented technology can meet every need. It uses HIMI (High Impact Moulded Inserts) bonded between two layers of CCB in situ and erected to produce a straight-to-finish wall. A monolithic structure is then created by filling the entire structure with concrete. Additional load capacity can be obtained by providing extra reinforcing bars and/or increasing the grade of the concrete.

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This is not an exhaustive list. Several other formwork providers like Doka, Western Form Inc are also their providing technology to Indian builders. However, it is important to evaluate the relevant tech or the project in context.

Green building practices can substantially reduce or eliminate negative environmental impacts and improve existing unsustainable design, con ruction and operational practices. As an added benefit, green design measures ce operating costs, enhance building marketability, increase worker productivity and reduce potential liability resulting from indoor air quality problems.

The IGBC set up the LEED India Core Committee to focus on indigenizing the LEED (Leadership in Energy & Environmental Design) rating to suit the Indian context.

The LEED India Green Building Rating System is a volun consensus – based, market-driven building rating system based on existing proven technology. It evaluates environmental performance from a whole building perspective over a building’s life cycle, providing a definitive standard for what constitutes a “green building”.

The rating system is organized into five environmental categories: Sustainable Sites, Water Efficiency, Energy & Atmosphere, Materials & Resources and Indoor Environmental Quality. An additional category, Innovation & Design Process, addresses sustainable building expertise as well as design measures not covered under the five environmental categories.

LEED India – CS and LEED India – NC were introduced in 2007.

LEED India Green Building Rating System for Core and Shell (LEED India CS) is a set of performance standards for certifying the design and construction of Core and Shell buildings. The intent of LEED India CS is to assist in the creation of high performance, healthful, durable, affordable and environmentally sound buildings.

The LEED India Green Building Rating System for New Commercial Construction and Major Renovation (LEED India NC) provides a set of performance standards for certifying the design and construction phases of c mmercial, institutional buildings and high-rise residential buildings. The specific credits in the rating system provide guidelines for the design and construction of buildings of all sizes in both the public and private sectors. The intent of LEED India NC is to assist in the creati n of high performance, healthful, durable, affordable and environmentally sound commercial and institutional buildings.

Part B – Green Building Concept:

LEED Certification Levels

Certification Level Points

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Certified 26 to 32Silver 33 to 38Gold 39 to 51Platinum 52 or more

For more information, visit the LEED Web page on www.igbc.in

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Part C - Specifications:

The choice of materials used in the project has to be good quality, hardy, durable, locally available and economical, but not substandard and cheap. Most of the developers reviewed e.g. Janadhara Constru ions, CSC Builders, VBHC etc., are providing good specifications in their projects.

Following is an illustration of specifications used in a project under construction:

Structure: Earthquake Resistant RCC Structure.General Flooring: Superior Quality Ceramic TilesCommon Area Flooring: Polished Sadarahalli/Tandoor FlooringToilet Dadoing: Up To 7’0” HeightDoors: Salwood Frame And Flush/Molded ShuttersWindows: Powder Coated Aluminum Sliding ShuttersExternal Painting: Water Proof Cement PaintExternal Painting: Water Proof Cement PaintInternal Painting: Distemper PaintKitchen: 2’0” Wide Granite Counter & Single Bowl SS SinkPlumbing: Branded Isi Mark Sanitary Fittings/FixturesElectrical: Branded Isi Mark Wiring And Switches

(source: CSC Callista, CSC Builders, Bangalore)

When it comes to materials, many developers are not making distinction between Affordable Housing project and any other construction in the higher bracket.

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Part IV - FINANCING OPTIONS:

GOI, through various nodal agencies, is providing the hrust required for this nascent market, where private participants can come forward to undertake these projects, which was hitherto only in the ambit of government agencies. The positive energy given by JNNURM, BSUP and other agencies has caused a lot of activity in the last two years. Consumers are coming forward to avail government subsidies along with a few trinkets, and it is expected that the drive will continue into the future.

Various financing products are available for Affordable Housing projects. FI’s have recognized the financial viability of these projects and several banks have attractive products for builders to finance the projects. Several banks have simplified procedures to provide homeloans within some limitations to buyers, in spite of inadequate documentation that the consumer may provide. Micro-financing is filling this void in many cases.

Guidelines For Affordable Housing In Partnership, (JNNURM Mission Directorate)

The Scheme of Affordable Housing in Partnership aims at operationalizing the strategy envisaged in the National Urban Housing & Habitat Policy (NUHHP) 2007, of promoting various types of public-private partnerships – of the government sector with the private sector, the cooperative sector, the financial services sector, the state parastatals, urban local bodies, etc. – for realizing the goal of affordable housing for all.

This Scheme is a part of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and takes into account the experience of implementing Basic Services to the Urban Poor (BSUP) and Integrated Housing & Slum Development Programme (IHSDP) for three years. The scheme is primarily applicable to the 65 cities covered under the BSUP programme. These Guidelines will come into effect from 1st April, 2009 and the scheme will be a part of JNNURM.

The basic aim of the Scheme is to provide stimulus to economic activities through affordable housing programmes in partnership.

The projects which should be eligible under this scheme for assistance would need to meet the following two criteria:

a) Dwelling units should be a mix of EWS/LIG/MIG categories with the maximum size of a dwelling unit being at 1200 square feet super area,with at least 25% of them for EWS of about 300 square In terms of carpet area, the minimum carpet area for EWS category shall be 25square meters and maximum carpet area for MIG category shall be 80 square meters.b) The sale price of dwelling units should have an upper ceiling in terms of Rupees per square metre of carpet area. The price ceiling would besettled in consultation with the States/UTs for different classes of cities.

a) Government of India, Ministry of Housing & Urban Poverty Alleviation

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The scheme modifies the guidelines of JNNURM (BSUP) for providing Central Assistance to States to incentivise land assembly for affordable housing to promote development of projects for a total of 10 lakh affordable housing units by provision of central assistance of 25% for the cost of provision of civic services for projects for affordable housing at an approximate cost of Rs.5,000 crores to Central budget.

Central Assistance under the scheme will be limited to least of following:• Rs. 50,000 per Dwelling Unit for all dwelling units taking EWS, LIG and MIG units together which are proposed in the project; nd• 25% of the cost of all civic services (external and nternal) proposed in the Project.

HUDCO:

HUDCO has emerged as a major contributor in the housin during the last nearly four decades of its existence. There has been a significant emphasis on housing for the under privileged sections f the society, in HUDCO’s operations. The soft financial terms for EWS and LIG housing include lesser interest rates compared to other income group households, larger extent of the house cost extended as loan assistance, and a longer repayment period.

A major focus is laid in HUDCO’s operations towards meet the requirements of housing for Economically Weaker Sections (EWS) and Low Income Group (LIG) households. The terms covering the cost of the unit and loan amount are linked to the economic criteria specified in terms of their income. Extensive assistance is also extended under this portf o schemes pertaining to IHSDP (Integrated Housing & Slum Development Programme) and BSUP (Basic Services for the Urban Poor) beneficiaries of the JNNURM (Jawaharlal Nehru National Urban Renewal Mission) – a Government of India scheme.

Financing For Affordable Housing By Private Developers / Builders:

A new category for financing for affordable housing by private developers/builders under different unit cost slabs has been introduced. The slabs and corresponding interest rates would be applicable to all affordable housing projects to be undertaken by the private builders/developers.

b) Financial Institutions:

Several Financial Institutions have recognized the benefit to finance Affordable Housing. GOI has made available crores of rupees through NHB that banks can tap for financing these projects. Following are a few FI’s (among several others) making their presence in the market through various home loan and project financing products:

HDFC, Central Bank of India, GRUH Finance, DHFL are a few.

Part V - PLAYERS IN THE MARKET:

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The ultra-low cost housing (having a ticket size of less than Rs. 10 Lakhs), so far, has not been fully embraced at a large scale by the private real estate development players in India. However, due to the large shortfall of housing units in this particular segment, the deman or housing units by the economically weaker sections remains high and the segment is critical for increasing homeownership in India. With the Government trying to gather momentum for the category further with the theme – ‘Housing for all’, the real estate industry is expected to soon harness the massive opportunities of scale and scope at the base of the pyramid.

Ultra Low Cost Housing by Private Developers

Tata Housing Shubh Griha, Boisar, MumbaiShubh Griha, Vasind, Mumbai

Matheran Realty Tanaji Malusare City, Karjat, MumbaiValue and Budget Housing Corporation Vaibhava, BangaloreMarg Constructions Maha Utsav, Seeknankuppam, ChennaiVijay Shanti Builders Lotus Pond, Kelambakkam, ChennaiShapoorji Pallonji SP Sukhobrishti, Rajarhat, KolkataHDIL Paradise City, Palghar, MumbaiCSC Builders CSC Callista, BangaloreUsha Breco Realty Limited Chaya Nivas, Boisar, Near MumbaiSpice Homes Griham, Meerut,

Source: Real Estate Intelligence Service (JLL), _Q10

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Part VI - CASE ILLUSTRATION:

Proposal for Residential Development:

Specifications proposed:

Affordable Housing Conventional Proposal

In order to illustrate the financial viability of Affordable Housing, the following case study is pro , wherein, two proposals are worked out for the same parcel of land. One is a conventional proposal and the other an Affordable Housing proposal. While comparing the two proposals, it will be evident that returns on Affordable Housing are quite attractive, considering the lower investment. Both proposals include ancillary facilities like hospice care, basic educational facilities, crèches, shopping, tertainment and other community activities.

Rcc Frame & Slabs (Maivan) Rcc Frame Structure, C.I.S. Rcc SlabsRcc Walls (Maivan) C.C. Block MasonryVitrified Tile Flooring White Marble FlooringMs Windows & H.W. Doors Pvc Windows, H.W.DoorsOne Lift For Each Cluster One Lift Per ClusterExterior Paint Exterior Plaster & PaintInterior Paint Interior Plaster & PaintElectrical Items, With Backup Luxury Electrical Items With BackupPhone, Internet Phone, Internet, Wi-FiSanitary Fixtures Luxury Sanitary FixturesNo Plastering Work Toilet Tile Finish

(see following page for comparison charts)

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COST OF LAND - ACTUAL 39197 1500 58795702DEDUCT FOR ROAD WIDENING 2232REMAINING LAND AVAILABLE FOR CONSTRUCTION 36965

ASUPER BUILT AREA @ 2.5 FAR

39197 x 2.5 92413 2500 231033222

PARKING FLOOR 14786

B TYPICAL CLUSTER DETAILS AS FOLLOWS:2 BHK - TYPE I - 800 SFT 2 PER CLUSTER 1600 2000000 25002 BHK - TYPE II - 950 SFT 2 PER CLUSTER 1900 2375000 25003 BHK - TYPE I - 1100 SFT 1 PER CLUSTER 1100 2750000 25003 BHK - TYPE II - 1250 SFT 1 PER CLUSTER 1250 3125000 2500

NO OF CLUSTERS 16(ROUNDED TO 16)

INCOME OF 16 CLUSTERSTOTAL NO. OF UNITSSBA ACHIEVED 92413INCOME FROM PARKING 14400000GROSS INCOME OF 16 CLUSTERS

C EXPENSES:COST OF LAND 58795702COST OF CONSTRUCTION 1000 92413289COST OF BASEMENT 750 11089595

DESCRIPTION COST / UNIT SQ.FT RS. PER SFT AMOUNT

ICOMMERCIAL HOUSING PROPOSAL - G + 5 FLOORS ( + STILT)

S.FT

TOTAL OF 1 CLUSTER 6 NOS 5850 10250000 2500 14625000

23400000096

248400000

20

CIVIC AMENITIES 5000000SUBTOTAL ADMIN EXPENSES 12701414TOTAL EXPENSES 180000000

PERCENTAGE PROFIT ( ROI /T.EXP *100 )

ASUPER BUILT AREA @ 2.5 FAR (SBA)

39197 x 2.5 92413 2500 231033222

PARKING FLOOR 14786

B TYPICAL CLUSTER DETAILS AS FOLLOWS:STUDIO - 400 SFT 5 PER CLUSTER 2000 500000 1250 15000001 BHK -2 - 550 SFT 3 PER CLUSTER 1650 825000 1500 33000002 BHK - 650 SFT 1 PER CLUSTER 650 1072500 1650 2145000

NO OF CLSUTERS 21(ROUNDED TO22)

GROSS INCOME OF 20 CLUSTERSTOTAL NO OF UNITSSBA ACHIEVED 92413INCOME FROM PARKING 12075000GROSS INCOME OF 23 CLUSTERS

C EXPENSES:COST OF LAND 58795702COST OF CONSTRUCTION 850 78551295COST OF BASEMENT 750 11089595CIVIC AMENITIES 5000000

167298586

D ROI (GROSS INCOME - TOTAL EXPENSES) 6840000038

II AFFORDABLE HOUSING - G + 3 FLOORS (+ STILT)

S.FT

TOTAL OF 1 CLUSTER 9 NOS 4300 6945000

159735000198

171810000

21

SUBTOTALADMIN EXPENSES 11563408TOTAL EXPENSES 160000000

PERCENTAGE PROFIT ( ROI /T.EXP *100 )II.A

E EXPENSES:COST OF LAND 29397851COST OF CONSTRUCTION 850 78551295COST OF BASEMENT 750 11089595CIVIC AMENITIES 5000000SUBTOTALADMIN EXPENSES 10961259TOTAL EXPENSES 130000000

PERCENTAGE PROFIT ( ROI /T.EXP *100 )

153436592

D ROI (GROSS INCOME - TOTAL EXPENSES) 118100007

OPTION WITH REDUCED COST OF LAND

124038741

F ROI (GROSS INCOME - TOTAL EXPENSES) 4181000032

The percentage of profit is about 38(%) for the conventional model. The Affordable model yield about 7% ROI. However, the projects can yield attractive ROI of 32% if the Cost of Land is halved, ( s shown in Option II.A - Affordable Housing option) assuming other cost to be same.

22

References:

1. India's next mega market, Hashish Karamchandani, Monitor, July 6, 20102. Guidelines For Affordable Housing In Partnership, Government of India, Ministry of Housing & Urban Poverty Alleviation3. Monitor Group, http://www.monitor.com/in4. Real Estate Intelligence Service (JLL)5. AFFORDABLE HOUSING - Market Scenario in India, Mr. Hashish Jindal, Regional Director (North), Knight Frank India Pvt. Ltd6. Constructionweekonline.in, June 23rd, 20107. HUDCO, www.hudco.org8. Livemint.com & The Wall Street Journal, April 9th 20109. Financing for LIG, P.M.Apte, The Hindu, Madras10. Guidelines for the projects on BASIC SERVICES TO THE URBAN POOR (BSUP), to be t under Jawahar Lal Nehru National Urban Renewal Mission

(JNNURM)11. www.igbc.in