Page 24 - Shelter - April 2025

THEME PAPER

government subsidies for investors. Regulatory challenges
first-time homebuyers. significantly impede
2.2 Challenges posed by
• Socioeconomic Changes: current urban housing housing development.
The cultural trend towards policies and practices A World Bank report
nuclear families is another highlights that India ranks
rd
significant driver. The The challenges in urban 163 in terms of ease of
traditional extended housing policies and practices obtaining construction
family living arrangement in India are multifaceted, permits, taking an average
is becoming less common affecting a broad spectrum of of about 94 days to
as more young adults and the population and reflecting complete the procedures,
couples opt for privacy deeper systemic issues. Below considerably higher than
and independence. This is a detailed analysis of these many other countries.
shift is reflected in the challenges, incorporating These delays, exacerbated
rising demand for 1-2 recent data and additional by bureaucratic
bedroom apartments in challenges: inefficiencies and land
urban and suburban areas, • Affordability Crisis: The acquisition disputes, can
rather than the large multi- affordability of housing significantly drive up
generational homes that remains a critical issue in project costs and timelines,
were previously common. urban India. According further impacting
to the 2021 Knight Frank affordability and supply.
• Real Estate as an
Index,
Investment: Despite Affordability affordability • Quality of Urban
housing
fluctuations in the Infrastructure:
economy, real estate in in key Indian cities like Urban infrastructure
India remains a favoured Mumbai, Delhi, and development has not
investment. The stability Bengaluru has deteriorated kept pace with the rapid
seen in real estate, over the last decade. For construction of housing
instance, in Mumbai, the
especially in contrast to units. A 2020 NITI Aayog
the volatility of the stock average citizen would report states that only 70%
market, makes it hugely need to spend about 10 of urban households have
years’ worth of the average
attractive. Additionally, access to piped water, and
the real estate market annual income to afford a vast disparities in sewage
home, making it one of the
has seen a compounded least affordable housing and waste management
annual growth rate systems exist. Power
globally.
(CAGR) of approximately markets affordability This outages remain frequent,
gap
stark
22% over the past decade, drives the proliferation of and road congestion
underscoring its potential is common in cities,
as a lucrative investment. slums, which are estimated undermining the quality of
to house approximately 65
This is further buoyed by million people or 17% of urban living and limiting
tax incentives on property India’s urban population, the effective integration of
investments and the according to a 2019 report new housing development
potential rental income, by the Ministry of Housing into the existing urban
which is highly appealing and Urban Affairs. fabric.
to both domestic and NRI • Environmental Concerns:
(Non-Resident Indian) • Regulatory Hurdles: Rapid urban construction

22 HUDCO-HSMI Publication