1. “Affordable housing definition beyond top 10 cities in India”
2. “Need for redefining affordable housing criteria in India”
3. “Challenges in categorizing affordable housing in non-metropolitan areas of India”.

The Present Definition of Affordable Housing is Adequate

There has been an ongoing debate about whether the current definition of affordable housing in India is adequate or if the ceiling needs to be raised. The Managing Director of PNB Housing, a leading housing finance company, recently weighed in on the topic, asserting that the present categorization of affordable housing is sufficient, especially if we exclude the top 10 cities in the country.

Affordable housing refers to housing units that are reasonably priced and within the budgetary means of middle and low-income individuals and families. The definition of affordability is subjective and varies across different countries and regions. In India, the government has set certain criteria to classify a property as affordable based on factors such as the size of the dwelling, location, and income levels of potential buyers.

According to the PNB Housing MD, the current categorization of affordable housing is appropriate when we consider the exclusion of the top 10 cities in India. These cities, including major urban centers like Mumbai, Delhi, and Bangalore, face significant challenges in terms of skyrocketing property prices, limited land availability, and high demand. As a result, the definition of affordability may need to be adapted to the unique circumstances of these cities.

However, the majority of India’s population resides outside of these top 10 cities, in smaller towns and rural areas. In these regions, the current threshold for affordable housing is generally adequate. The cost of land and property is relatively lower, and income levels are often lower as well. Therefore, the existing categorization of affordable housing effectively addresses the needs of a significant portion of the Indian population.

Moreover, raising the ceiling for affordable housing could have unintended consequences. If the definition is expanded to include higher-priced properties, it may dilute the focus on providing housing options for those who truly need it. By maintaining a clear distinction between affordable and luxury properties, the government and housing finance companies can channel resources and incentives towards promoting affordable housing initiatives.

Additionally, increasing the ceiling for affordable housing could lead to a reduction in the number of available units. Developers might choose to build higher-priced properties to maximize their profits, leaving fewer options for middle and low-income individuals. This could exacerbate the existing housing shortage and affordability crisis in the country.

However, it is essential to acknowledge that the definition of affordable housing should be periodically reviewed and revised to keep up with changing economic conditions and market dynamics. As the country progresses and urbanization continues, the demand for affordable housing might evolve, necessitating adjustments to the existing categorization.

In conclusion, the present definition of affordable housing in India is adequate, particularly when considering the exclusion of the top 10 cities. It effectively addresses the needs of a significant portion of the population and prevents dilution of resources and incentives. While periodic reviews and revisions are necessary, care must be taken not to raise the ceiling indiscriminately, as it may have unintended consequences. Striking a balance between affordability and market dynamics is crucial for ensuring the availability of affordable housing for all.

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Source : @TweshMishra

The present definition of afforable housing is adequate. If we leave out the top 10 cities, the current categorisation of affordable is good enough: PNB Housing MD on whether India needs to raise the ceiling for a property which is called afforadable.

— Twesh Mishra (@TweshMishra) December 6, 2023

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1. “Affordable housing definition beyond top 10 cities”
2. “Redefining affordable housing criteria in India”
3. “Evaluating affordable housing beyond major urban centers”.