Shelter For All: Most Governments Cower. India Tackles It Head On

bird's eye shot of housing in India
Untitled photo by Casper Kongstein is licensed under CC BY-NC-ND 2.0
Housing in India. Apparently, where there's a will there's a way.

Following the landslide re-election for India’s Prime Minister Narendra Modi, how is his hugely ambitious ‘Housing For All By 2022’ plan coming along?

Not a slam dunk yet, but it apparently remains at least a possibility except in Mumbai, where the problem is not so much the government’s willingness to build more housing but the lack of land on which to build it.

The government has itself has built some 15 million houses in line with the ‘Housing for All’ initiative since its announcement in 2015. During that time, the number of days needed to build a house has been cut by two thirds. This will become a huge help in the task of building a further 20 million houses, planned for the next two years.

Why Is This Of Interest In Other Countries?

Three things stand out in the India initiative: direct government construction of housing, continued support for private development and rental protections for tenants.

Government building program for households that cannot afford private market housing

The message from India is clear and powerful. To tackle the issue of shelter in any country in the midst of a deepening affordable housing crisis, a national government must step in and contract the work. There are models available from post World War II Europe, North America, and elsewhere. The biggest task of all was managed in the Soviet Union, which suffered most from the wartime destruction of housing.

Public investment in the private development industry

India is attempting its remarkable feat without undermining the free enterprise housing sector. The latest Indian budget provides incentives for the private housing developers and builders to use ever-more-elastic definitions of ‘affordable’ for private sector housing that targets home buyers in a range of middle class income brackets.

It seems that buyers are not prepared to pay the prices that developers would prefer to see. And so while the government supports building middle class ‘affordable’ housing, there is a significant backlog that is unsold. With their capital caught up in completed and unsold housing as well as other stages of the housing construction process, many developers experience liquidity problems. The latest national budget attempts to address these issues as well.

Protections for tenants

The government has announced impending rent controls — standardization of landlord and renter protections backed by government regulation. This is a measure to be noted by other national and regional governments.

Read more in the Financial Express:  Budget 2019: Towards Housing For All By 2022