Key Recommendations of the High Level Task Force on Affordable Housing for All

1. Key Recommendations of the High Level Task Force onAffordable Housing for All Presentation to the Ministry of Housing and Urban Poverty Alleviation December 29, 2008

2. Need for Affordable Housing • Almost every available indicator suggests that the provision of affordable housing is one of the most formidable challenges facing India • Delay in addressing the affordable housing problem would seriously affect India’s economic growth and poverty reduction strategies • Multiplier effects of housing • Need to build a property owning democracy • Alleviating the urban housing shortage could raise GDP growth by 1-1.5% • Need to put affordable housing at the centre of public policy

3. Suggested Parameters for Affordable Housing The Task Force visualises the size of household as five members

4. Affordable Housing: The Concept and Issues • Difficult to adopt a ‘one-size-fits-all’ concept • Government should undertake a separate exercise to estimate the number of households falling under the ‘affordable housing’ category • Need for regular data on housing starts and completions • Data to be collected through an institutional structure

5. Land for Affordable Housing • Bring in additional lands into urban usage on a regular basis by • Simplifying processes for land acquisition and conversion of agricultural lands for urban use • Reviewing processes of master planning for making a proper assessment of land requirements and allocation of such lands for different uses • Treat affordable housing as a ‘public purpose’

6. Land for Affordable Housing • Upward revision of FAR/FSI • Need for upward revision of FAR/FSI which is commensurate with investment in infrastructure • Infrastructure upgrading to precede FAR/FSI increase • Develop critical space plans • Impose an impact fee on those benefiting from additional FAR/FSI

7. Land for Affordable Housing • In-situ Development • In-situ development on public lands is one of the most effective instruments for addressing affordable housing issues • Formal recognition of ‘security of tenure’ by the Government is essential to solving the housing problem • Several forms of providing security • Ensure that there is no threat of eviction • Tenurial security to facilitate access to market funds

8. Land for Affordable Housing Land Policy • Land related issues i.e. bringing in additional lands, higher FSI and in-situ development need to be implemented in an integrated manner • Improve the speed of transactions through cadastrals, computerised land records and application of e-governance to land transactions • Government should commission a professional study to examine issues covering urban land and recommend a long-term urban land policy • Need to foster an environment that will make rental housing for EWS/LIG categories a worthwhile investment

9. Fiscal and Financial Framework Recommendations • Increase JNNURM funds for affordable housing by 100% • Part of these funds to be used for direct provisioning of housing for urban poor households • Part of the funds to be used as supplementsfor in-situ development to be routed through NGOs and CBOs. • A housing cess of 0.5% on all central government taxes be credited to a dedicated Shelter Fund to be managed by NHB, along with budgetary support of an equal amount • Allow HFIs to access long-term External Commercial Borrowings (ECB) market

10. Fiscal and Financial Framework Role of State Housing Boards (SHBs) • The role of SHBs needs to be revamped • SHBs must be encouraged to focus on playing a more active role in the provision of affordable housing, even if it is through PPPs • Funds raised through sale of land transactions by SHBs must be ring fenced, with a defined proportion to be deployed only for affordable housing

11. Fiscal and Financial Framework Tax Related Incentives • Reinstate Section 80 (IB) of the Income Tax Act for developers engaged in affordable housing • Extend the scope of Section 36(1)(vii) of the Income Tax Act to include HFIs • Further reduction in stamp duty rates and registration fee for affordable housing to 2% ad valorem uniformly in all states • Levy a flat charge of Rs 1,000 on registration of equitable mortgages • Bring ‘affordable housing’ under the infrastructure definition

12. Fiscal and Financial Framework Financial Institutional Recommendations • Establish a housing finance company focusing only on housing micro-finance • Promote household savings: allow financial institutions lending to the poor employed in the informal sector to accept deposits: • Savings can enable a down payment for a loan • Will enable the financial institution to assess the savings pattern of the customer

13. Institutional Framework • Need for a coherent institutional framework to promote affordable housing • Need for real estate regulators • To serve as a single window for overseeing the affordable housing agenda • Regulate activities • Promote policy reforms (e.g. stamp duty reduction) • Protect consumers from real estate frauds • Co-ordinate digitisation of land records • Legislative process may be time consuming, hence in the interim, Ombudsman type bodies need to be set up at the state level to monitor JNNURM projects

14. Closing Remarks • Housing has huge multiplier effects and can provide the much-needed triggers to the Indian economy • Set up an inter-Ministerial group to focus on ‘Housing and the Economy’