Innovative and Affordable Low Cost Housing

The Indian School of Business hosted a panel discussion on “Innovative and Affordable Low Cost Housing” as part of the Real Estate Track at the annual ISB Leadership Summit 2007.The discussion was represented by different players including P R Jaishanker, Assistant GM National Housing Bank (NHB), Sanjay Dutt, Deputy MD Cushman and Weikfield, S P Reddy, Chairman & CEO enGenius Consulting Group, Muthanna, RedFort Capital and Jayesh Ranjan, IAS representing HUDA.

The discussion started with the premise that there is an urgent need to develop affordable housing for the growing urban working class and the solution lies in collaboration between the government and the private sector. Land costs constitute the main hurdle in making affordable housing available. Sanjay Dutt, Deputy MD Cushman & Wakefield India commented that speculation is leading to staggering land costs which makes most projects unviable especially in urban locations where the demand-supply mismatch is alarming. There was some debate on what exactly should be the role of the Government.

SP Reddy, Chairman & CEO, enGenius Consulting Group was of the opinion that the state has to go beyond merely subsidizing land and take more constructive measures like reducing stamp duties and extending tax holidays to local developers. J Ranjan, IAS representing HUDA addressed this issue by commenting that first market driven solutions need to be exploited before pushing for more subsidies. There is a need for innovative financial structures and adopting global best practice initiatives like title insurance by the State, mortgage insurance, and development of the secondary debt market by effective utilization of funds, with pension funds and insurance companies bringing down the effective cost of debt.

The discussion introduced new lines of thought for the audience. The supply-demand gap in affordable housing brings with it both challenges and opportunities. How we take these on is entirely upto us.