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AFFORDABLE HOUSING
A White Paper Sample images of a pilot project

Phani Ram
V.P. (Arch)
20 th April 2011

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CONTENTS:

Part I - Definition of Affordable House

Part II - The Landscape of Affordable Housing

Part III – Technology

Part A – Low Cost Concept

Part B – Green Building Concept
Part C – Specifications

Part IV - Financing Options

Part V - Players in the market

Part VI - Case Illustration

References

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Part I - Definition of Affordable House (extract from JNNURM):

Keeping in mind that the housing shortages affect mostly the EWS and
LIG and the younger group of urban-urban migrants changing cities in search of
better prospects, affordable houses, for the purpose of this scheme, may be taken
as houses ranging from about 300 square feet (super built up area) for EW S, 500
square feet for LIG and 600 square feet to 1200 square feet for MIG, at costs that
permit repayment of home loans in monthly installments exceeding 30% to
40% of monthly income of the buyer. In terms of carpet area, an EWS
category house would be taken as having a minimum 25 square meters of carpet
area and the carpet area of an LIG category house woul limited to a maximum
of 48 square meters. The carpet area of an MIG house would be limited to a
maximum of 80 square meters.

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Part II – The Landscape of Affordable Housing

The Opportunity

Affordable Housing industry in India is poised to grow significantly in the coming years as demand is rising and a clear short supply exists in this niche
segment. This high-volume, low-margin business is bubbling with interest as urbanization increases and microfinance institutions help support
homebuyers. The National Housing Bank expressed that s nce 2007, there has been a 20 percent compounded annual growth rate in the total amount
of loans disbursed to the low-cost housing segment in urban India. And still, demand outweighs supply, as the country is facing a whopping shortage of
24.7 million low-cost homes.

“… it was only recently that India Inc. realized that housing for people with low income is a large, untapped, and very profitable market … the market
for houses costing Rs. 3 - 10 lakh is worth some Rs 11 lakh crore with an unmet demand of 21 million households (each, on an average, costing Rs
5.25 lakh). This is bigger than the traditional higher end housing market (houses costing Rs 25 lakh and above)...” ( India’s next mega market, Hashish
Karamchandani, Monitor, July 6, 2010)

The Customer

Wage earners, service providers, construction labour, illed and unskilled workers earning Rs.10 to 15,000 per month are the prime focus for this
market segment. Typically, these residents of Tier I and Tier II cities live in slums, high dense core areas or peripheral areas with rents averaging
about 40% of their monthly incomes. Also, they commute about 2 – 3 hours per day to and from work. They do not file income tax returns, nor pay
service tax. With monthly incomes < Rs.12,000, the eligibility for home loans from nationalized banks is difficult to impossible.

The requirement to be fulfilled

This urban working class, which makes up the bulk of urban population, needs to be provided with good housing solution, preferably, homes which
they can afford to buy with loans that can be amortized over 20 year tenures. Along with good housing facilities, they also need hospice care,
education for their children, entertainment, water supply, sanitary & electricity services, proximity to transportation facilities and salubrious unity
living. Approximately 55% of urbanites fall under mont ly income of Rs.10 to !5,000 ( in many cases combined income of both couple) who are striving
for improving their conditions.

The Proposal

For Affordable Housing to be successful, it is necessary to plan large scale mass housing, preferably high rise, designed with complete planning
standards, competent engineering services, energy efficient concepts, sustainable habitats and timely delivery of projects.

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Additional benefits:

Aside from the crunching need to fulfill the demand for this niche market, Affordable Housing satisfies a host of related social and economic concerns
as illustrated below:

Provide alternative to Urban Slums

Benefits for families of Urban Poor
l Housing is essential for the
well-being of a family
l Enhanced security and health
through organized housing
with access to sanitation
l Access to better services
(schools, healthcare etc.)
which are typically available to
higher-income groups
l ~40M people live in urban slums
without basic facilities such as
sanitation, water, schools, etc.
l Renters disempowered. All power
is w/ slum lords
l Slum lords “own” houses and
benefit from Slum Rehabilitation
Schemes
l Slums create high pressure on
infrastructure within a city
Aiding Overall Economic
Development
l Construction of low income
housing provides
disproportionate job creation
l Creates significant economic
value for state (taxes,
ancillary economic activity,
source of labor potentially
leading to industry, etc.

Affordable Housing
Creation of Low-Risk Asset for
Families
l Long term wealth creation due
to value of asset, “saving on
Benefits to Communities
rent” & collateral for loan
l A “security net” in crisis l Neighborhoods with good
l Low income houses typically quality housing have lower
built on land with low cost per crime rates, stronger local
sq. ft. Low likelihood of price economies and a better
depreciation, Hence downside overall quality of life
risk is low
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Part III – TECHNOLOGY:

A good Affordable Housing project can be put together by adopting concepts hitherto popular as Low-Cost Housing practices, combined with energy
efficiency, sustainability and good MEP engineering pr tices. The need for seismic design is unquestionable. Overall, the approach towards
Affordable Housing should be one of sturdy buildings combined with sound engineering practices, resulting in healthy living conditions.

Affordable Housing is closely knit with concepts of Lo Cost Housing since it is imperative to keep the cost of construction low. Low Cost Housing
concept which deals with effective budgeting and implementing techniques which help in reducing the cost of construction through the use of locally
available materials along with improved skills and technology without sacrificing the strength, performance and life of the structure. There is huge
misconception that low cost housing is suitable for on y sub-standard works and they are constructed by utilizing cheap building materials of low
quality. The fact is that Low cost housing is done by oper management of resources. Economy is also achieved by postponing finishing works or
implementing them in phases.

The building construction cost can be divided into two parts. The material cost which is about 65 to 70 % and labour cost which is about 30 to 35 %.
Now in low cost housing, building material cost is less because we make use of the locally available materials and also the labour cost can be reduced
by properly making the time schedule of our work. Cost of reduction is achieved by selection of more efficient material or by an improved design.

The techniques used for low rise buildings are different from those used for high rise buildings.

Part A – Low Cost Concept

i) Low Rise Buildings:

Following construction practices, albeit, used in several low cost projects over the years and accepted as common knowledge, is enumerated
here below only as a compendium, although not an exhaustive one.
Areas from where cost can be reduced are:-
1) Reduce plinth area by using thinner wall concept. e.g. 15 cms thick solid concrete block wall.
2) Use locally available material in an innovative for ike soil cement blocks in place of burnt brick.
3) Use energy efficiency materials which consume less energy like concrete block in place of burnt brick.
4) Use environmentally friendly materials which are su tute for conventional building components like use R.C.C. Door and window frames in
place of wooden frames.
5) Preplan every component of a house and rationalize the design procedure for reducing the size of the component in the building.
6) By planning each and every component of a house the wastage of materials due to demolition of the unplanned component of the house can
be avoided.
7) Each component of the house shall be checked to see if it’s necessary and if it is not necessary, then that component should not be used.

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Cost reduction through adhoc methods
Foundation
Normally the foundation cost comes to about 10 to 15% f the total building and usually foundation depth of 3 to 4 ft. is adopted for single or
double store building and also the concrete bed of 6?(15 Cms.) is used for the foundation which could be avoided. It is recommended to adopt a
foundation depth of 2 ft.(0.6m) for normal soil like g avely soil, red soils etc., and use the un-coursed rubble masonry with the bond stones and
good packing. Similarly the foundation width is ration lized to 2 ft.(0.6m).To avoid cracks formation in foundation the masonry shall be
thoroughly packed with cement mortar of 1:8 boulders a stones at regular intervals. It is further suggested adopt arch foundation in
ordinary soil for effecting reduction in construction cost up to 40%.This kind of foundation will help in bridging the loose pockets of soil which
occurs along the foundation. In the case black cotton and other soft soils it is recommend to u er ream pile foundation which saves about
20 to 25% in cost over the conventional method of cons ruction.
Plinth
It is suggested to adopt 1 ft. height above ground lev l for the plinth and may be constructed with a cement mortar of 1:6. The plinth sl b of 4 to
6? which is normally adopted can be avoided and in its e brick on edge can be used for reducing the cost. By adopting this procedure the
cost of plinth foundation can be reduced by about 35 to 50%.It is necessary to take precaution of providing impervious blanket like concrete
slabs or stone slabs all-round the building for enabling to reduce erosion of soil and thereby avoiding exposure of foundation surface and crack
formation.
Walling
Wall thickness of 6 to 9? is recommended for adoption in the construction of walls all-round the building and 41/2 ” for inside walls. It is
suggested to use burnt bricks which are immersed in water for 24 hours and then shall be used for the walls
Rat – trap bond wall
It is a cavity wall construction with added advantage thermal comfort and reduction in the quantity of bricks required for masonry work. By
adopting this method of bonding of brick masonry compared to traditional English or Flemish bond masonry, it is possible to reduce in the
material cost of bricks by 25% and about 10to 15% in the masonry cost. By adopting rat-trap bond method one can create aesthetically
pleasing wall surface and plastering can be avoided.
Concrete block walling
In view of high energy consumption by burnt brick it is suggested to use concrete block (block hollow and solid) which consumes about only 1/3
of the energy of the burnt bricks in its production. By using concrete block masonry the wall thickness can be reduced from 20 cms to 15 Cms.
Concrete block masonry saves mortar consumption, speedy construction of wall resulting in higher output of labour, plastering can be avoided
thereby an overall saving of 10 to 25% can be achieved.
Soil cement block technology
It is an alternative method of construction of walls using soil ment blocks in place of burnt bricks masonry. It is an energy efficient method of
construction where soil mixed with 5% and above cement and pressed in hand operated machine and cured well and then used in the
masonry. This masonry doesn’t require plastering on bo h sides of the wall. The overall economy that could be achieved with the soil cement
technology is about 15 to 20% compared to conventional method of construction.

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 Doors and windows
It is suggested not to use wood for doors and windows and in its place concrete or steel section frames shall be used for achieving saving in
cost up to 30 to 40%.Similiarly for shutters commercia ly available block boards, fibre or wooden practical boards etc., shall be used for
reducing the cost by about 25%.By adopting brick jelly work and precast components effective ventilation could be provided to the building and
also the construction cost could be saved up to 50% over the window components.
Lintels and Chajjas
The traditional R.C.C. lintels which are costly can be replaced by brick arches for small spans and save construction cost up to 30 to 40% over
the traditional method of construction. By adopting ar hes of different shapes a good architectural pleasing appearance can be given to the
external wall surfaces of the brick masonry.
Roofing
Normally 5?(12.5 cms) thick R.C.C. slabs is used for roofing of residential buildings. By adopting rationally designed in-situ construction
practices like filler slab and precast elements the construction cost of roofing can reduced by about 20 to 25%.
Filler slabs
They are normal RCC slabs where bottom half (tension) ncrete portions are replaced by filler materials such as bricks, tiles, cellular concrete
blocks, etc. These filler materials are so placed as not to compromise structural strength result in replacing unwanted and nonfunctional tension
concrete, thus resulting in economy. These are safe, sound and provide aesthetically pleasing pattern ceilings and also need no plaster.
Jack arch roof/floor
They are easy to construct, save on cement and steel, e appropriate in hot climates. These can be constructed using compressed earth
blocks also as alternative to bricks for further economy.
Ferro cement channel/shell unit
Provide an economic solution to RCC slab by providing 30 to 40% cost reduction on floor/roof unit over RCC slabs without compromising the
strength. These being precast, construction is speedy, economical due to avoidance of shuttering and facilitates quality control.
Finishing Work
The cost of finishing items like sanitary, electricity painting etc., varies depending upon the type and quality of products used in the building
and its cost reduction is left to the individual choice and liking.

The above list of suggestions for reducing construction cost is of general nature and it varies depending upon the nature of the building to be
constructed, budget of the owner, geographical location where the house is to be constructed, availability of the building material, good construction
management practices etc. However it is necessary that good planning and design methods shall be adopted by utilizing the services of an
experienced engineer or an architect for supervising the work, thereby achieving overall cost effectiveness to the extent of 25% in act al practice.

ii) High Rise buildings

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Low Cost concepts enumerated above, although being used in many projects, are largely efficient in low rise constructions (G + 3 Floors). However, if
mass housing has to be provided with high rise structures, the following formwork tech s and infill wall methods may be used, in order to result
cost effective projects. Many builders are already using several of these in various projects.

Mascon
The Mascon Construction System is used for forming the cast-in-place concrete structure of a building. Developed in t late 1970s by WJ
Malone, a Canadian engineer, the Mascon System has been used extensively throughout the world. It is fast, simple, adaptable and very cost
effective. The System is most effective when combined with loadbearing wall structural design.
The Mascon System is unique because it forms all of the concrete in a building including; walls, floor slabs, columns, beams, stairs, window
hoods, balconies and various decorative features in exact accordance with the architect’s design.
The System consists of hundreds of hand held pieces of formwork equipment, manufactured to fine tolerances. The majority of the equipment
is comprised of panels while the rest includes vertical and horizontal corner sections, bulkheads and special floor slab beams that can be
dismantled without disturbing the props supporting the floor slab concrete.
Ninety-nine percent of the Mascon equipment is made of aluminum, the other one percent is steel. Unlike other construction systems, the use
of aluminum allows the larger components to be big enough to be ef ctive, yet light enough (less than 30 kg) to be handled by a single worker.
Consequently, the need for cranes or other heavy handling equipment is eliminated. All of the individual pieces of equipment are joined by
simple steel pins and wedges and the only tool required in assembly is a hammer. This eliminates the need for skilled workers.
The Mascon formwork can be used to form both concrete structural designs – i.e. traditional RCC frame design or loadbearing wall design.

MFE Formwork Technology (Mivan)

MFE Formwork Technology (formally known as Mivan Far East) is a revolutionary aluminium formwork construction system, which has been
used quite extensively in India. Using this unique formwork, all walls, floor slabs, columns, beams, stairs, balconies, together with door and
window openings are cast in place in a single site based operation. The resulting building structure is very strong, accurate in dimensions and
tolerances, with a high quality of finished concrete surface. It is fast, adaptable and very cost effective.
MFE Formwork makes use of concrete as the principal building material for the prime reasons of cost and accessibility. It can construct all type
of concrete structures.
The basic element of MFE Formwork is the panel which is a framework of extruded aluminium sections, welded to an aluminum sheet. This
produces a lightweight panel with an excellent stiffness to weight ratio, yie ding minimal deflections under concrete loading. Panels are
manufactured in standard sizes with non-standard elements produced to the required size and sh o suit the project requirements. The
panels are made from a high strength aluminium alloy, with the face or contact surface of the panel, from 4mm thick plate, which is welded to a
framework of specially designed extruded sections, to orm a robust component.
As MFE Formwork can be reused over 250 times, the initial cost appears high; however the ul imate cost per sft of forming area is less when
compare to traditional methods.

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PASCHAL
The Paschal Group, specializing in concrete formwork, shoring systems and formwork design software globally, has recently opened their first
distribution and production facility in India. Its production company, Paschal Form Work in Visakhapatnam, concentrates on products such as
the Modular universal formwork as well as the innovati e modular slab formwork E-Deck with steel frame, which can also be used on building
sites that have no crane.
With the modular slab formwork E-Deck, Paschal presents a particularly robust product, specially designed for use on building sites where no
crane is available and, furthermore, can be used everywhere where aluminium should not be used. The frame of the new elements is made
from profiled steel and, with a height of 7.5 cm provides very good grid compatibility and flexible application options, for transportation as well
as for installation.
The facing of the formwork consists of a 9-layer, 12 mm thick sheet of birch plywood, so that the ght of the individual elements is a
maximum 20 kilograms and can be used with no problem without a crane. The E-Deck has the advantage that damage to the frame can be
repaired, which is not possible on comparable aluminium products.
Panel slab formwork has an advantage over flex-formwork that the panels are protected and more durable. Because the panels are attached to
one another, as opposed to flex-formwork, they are considerably safer.

PERI
One of the biggest names in the industry, Peri provides innovative formwork and scaffolding systems. With 55 subsidiaries and over 100 large
logistical locations around the world, Peri operates in over 70 national markets.
The company offers Uno Monolithic Housing Formwork which is used for monolithic construction method. The Uno formwork is predominantly
used for residential housing development and similar, whereby large numbers of residential units with identical dimensions are extended
horizontally and vertically.
All Uno elements, girders and stopend plates are made of aluminium and weigh a maximum 23 kg/m². This means problem-free forming can be
done manually. It is very easy to assemble. A hammer is sufficient when working with Uno.
Thanks to the new mechanism, the wall formwork element n easily be dismantled even with slab formwork elements still installed. After
dismantling the Spacer Clamps, the wall element is simply unscrewed from the wall/slab transition area. The transition to the horizontal
formwork is flexibly designed so that striking can be easily carried out in this area as well.
The design of the slab formwork as drophead formwork allows early striking to take place – usually after only one day.
For setting of stopends and box-outs, Uno Stopend Plates are available, which are adapted to the wall thicknesses in 1 cm increments. In
addition, the integrated toothed rack of the shuttering strip absorbs the concrete load and thus replaces the formwork tie.

MOLADI
This plastic concrete formwork system, for low cost ho ovides and assists with the full range of requirements involved in the transfer
and use of a proven low construction cost housing tech y.
One of the important principles under a lean production paradigm is termed ‘lean as This refers to simplifying the process of assembly
through industrialisation, modularisations, standardisation, and continuous flow processes. The reduction of operations required for a

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production process means less chance of the occurrence of errors, waste and rework. This follows from the same logic that the fewer the
number of operations, the higher the quality of the product and a predictive timeline, resulting in cost savings.

THE MOLD
The patented PUJOL-BARCONS System places a new technology for the construction of complete buildings in a day within your reach.
The construction system consists of a group of integrated lements which allows for the industrialized construction of buildings using a
mechanized, rationalized and mass-produced procedure. Controlled by measuring templates, special tools, complementary accessories,
scaffolding and safety walkways, they constitute a sys em making the MOLD fast, safe and with the highest quality of work.

The MOLD is a group of metal panels, manufactured to a ten a millimeter, which allows for the assembling and dismantling the perimeter
walls, interior partitions, stairs, ceiling/floor slabs, roofs, installations and all types of details integrated in the actual formwork (chimneys,
parapets, brick molds, etc.) in a single day, without onstraints to architecture or design.

The MOLD can be simple, duplex, triplex or fourplex meaning that it is possible to make one, two, three or four units at a time in a day.
Once the MOLD is assembled, it is single cast, achievi g what is called the complete unit at grey work stage, which represents between 60 and
75% of the whole construction, depending on the type o structure to be built. Subsequent to its dismantling the next day, and to completely
finishing the building, the following construction tas uted: paving, tiling, interior and exterior carpentry, painting and installation of the
appliances, taps and fixtures and electrical systems. he sequence of assembling, casting and removing forms is ated daily to achieve a
production pace of 1 unit at shell-and-core stage per mold per day.
The industrializing of the process and the mass production method of construction result in a schedule of project delivery that meets deadlines,
achieves perfect cost control, as well as superior qua y of building work and shorter completion times than those achieved with any other
building method, -traditional or prefabricated.

Fabtech Sterling:
Easy Build by Fabtech Sterling is a fast and simple method to build long lasting quality homes. All designs are made from two simple
components namely plank and post. This system can be smooth jointed inside and out. It is cost effective in socialized and low cost building
markets
Fabtech Plaswall™ is a range of custom-manufactured modular walls which can be made at a movable factory at site and suit any design or
architectural requirement. It is a fast, hassle-free, hygienic and economical, pre-engineered and pre-fabricated modular load-bearing
construction system.
From light weight concrete systems to thermally insula ed walls especially designed for hot and cold climates, this patented technology can
meet every need. It uses HIMI (High Impact Moulded Inserts) bonded between two layers of CCB in situ and erected to produce a straight-to-
finish wall. A monolithic structure is then created by filling the entire structure with concrete. Additional load capacity can be obtained by
providing extra reinforcing bars and/or increasing the grade of the concrete.

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This is not an exhaustive list. Several other formwork providers like Doka, Western Form Inc are also their providing technology to Indian builders.
However, it is important to evaluate the relevant tech or the project in context.

Part B – Green Building Concept:

Green building practices can substantially reduce or eliminate negative environmental impacts and improve existing unsustainable design, con ruction
and operational practices. As an added benefit, green design measures ce operating costs, enhance building marketability, increase worker
productivity and reduce potential liability resulting from indoor air quality problems.

The IGBC set up the LEED India Core Committee to focus on indigenizing the LEED (Leadership in Energy & Environmental Design) rating to suit the
Indian context.

The LEED India Green Building Rating System is a volun consensus – based, market-driven building rating system based on existing proven
technology. It evaluates environmental performance from a whole building perspective over a building’s life cycle, providing a definitive standard for
what constitutes a “green building”.

The rating system is organized into five environmental categories: Sustainable Sites, Water Efficiency, Energy & Atmosphere, Materials & Resources
and Indoor Environmental Quality. An additional category, Innovation & Design Process, addresses sustainable building expertise as well as design
measures not covered under the five environmental categories.

LEED India – CS and LEED India – NC were introduced in 2007.

LEED India Green Building Rating System for Core and Shell (LEED India CS) is a set of performance standards for certifying the design and
construction of Core and Shell buildings. The intent of LEED India CS is to assist in the creation of high performance, healthful, durable, affordable and
environmentally sound buildings.

The LEED India Green Building Rating System for New Commercial Construction and Major Renovation (LEED India NC) provides a set of
performance standards for certifying the design and construction phases of c mmercial, institutional buildings and high-rise residential buildings. The
specific credits in the rating system provide guidelines for the design and construction of buildings of all sizes in both the public and private sectors.
The intent of LEED India NC is to assist in the creati n of high performance, healthful, durable, affordable and environmentally sound commercial and
institutional buildings.

LEED Certification Levels

Certification Level Points

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 Certified 26 to 32
Silver 33 to 38
Gold 39 to 51
Platinum 52 or more

For more information, visit the LEED Web page on www.igbc.in

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Part C - Specifications:

The choice of materials used in the project has to be good quality, hardy, durable, locally available and economical, but not substandard and cheap.
Most of the developers reviewed e.g. Janadhara Constru ions, CSC Builders, VBHC etc., are providing good specifications in their projects.

Following is an illustration of specifications used in a project under construction:

Structure: Earthquake Resistant RCC Structure.

General Flooring: Superior Quality Ceramic Tiles
Common Area Flooring: Polished Sadarahalli/Tandoor Flooring
Toilet Dadoing: Up To 7’0” Height
Doors: Salwood Frame And Flush/Molded Shutters
Windows: Powder Coated Aluminum Sliding Shutters
External Painting: Water Proof Cement Paint
External Painting: Water Proof Cement Paint
Internal Painting: Distemper Paint
Kitchen: 2’0” Wide Granite Counter & Single Bowl SS Sink
Plumbing: Branded Isi Mark Sanitary Fittings/Fixtures
Electrical: Branded Isi Mark Wiring And Switches

(source: CSC Callista, CSC Builders, Bangalore)

When it comes to materials, many developers are not making distinction between Affordable Housing project and any other construction in the higher
bracket.

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Part IV - FINANCING OPTIONS:

GOI, through various nodal agencies, is providing the hrust required for this nascent market, where private participants can come forward
to undertake these projects, which was hitherto only in the ambit of government agencies. The positive energy given by JNNURM, BSUP
and other agencies has caused a lot of activity in the last two years. Consumers are coming forward to avail government subsidies along
with a few trinkets, and it is expected that the drive will continue into the future.

Various financing products are available for Affordable Housing projects. FI’s have recognized the financial viability of these projects and
several banks have attractive products for builders to finance the projects. Several banks have simplified procedures to provide home
loans within some limitations to buyers, in spite of inadequate documentation that the consumer may provide. Micro-financing is filling this
void in many cases.

a) Guidelines For Affordable Housing In Partnership, Government of India, Ministry of Housing & Urban Poverty Alleviation
(JNNURM Mission Directorate)

The Scheme of Affordable Housing in Partnership aims at operationalizing the strategy envisaged in the National Urban Housing & Habitat Policy
(NUHHP) 2007, of promoting various types of public-private partnerships – of the government sector with the private sector, the cooperative sector, the
financial services sector, the state parastatals, urban local bodies, etc. – for realizing the goal of affordable housing for all.

This Scheme is a part of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and takes into account the experience of implementing
Basic Services to the Urban Poor (BSUP) and Integrated Housing & Slum Development Programme (IHSDP) for three years. The scheme is primarily
applicable to the 65 cities covered under the BSUP programme. These Guidelines will come into effect from 1st April, 2009 and the scheme will be a
part of JNNURM.

The basic aim of the Scheme is to provide stimulus to economic activities through affordable housing programmes in partnership.

The projects which should be eligible under this scheme for assistance would need to meet the following two criteria:

a) Dwelling units should be a mix of EWS/LIG/MIG categories with the maximum size of a dwelling unit being at 1200 square feet super area,
with at least 25% of them for EWS of about 300 square In terms of carpet area, the minimum carpet area for EWS category shall be 25
square meters and maximum carpet area for MIG category shall be 80 square meters.
b) The sale price of dwelling units should have an upper ceiling in terms of Rupees per square metre of carpet area. The price ceiling would be
settled in consultation with the States/UTs for different classes of cities.

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The scheme modifies the guidelines of JNNURM (BSUP) for providing Central Assistance to States to incentivise land assembly for affordable housing
to promote development of projects for a total of 10 lakh affordable housing units by provision of central assistance of 25% for the cost of provision of
civic services for projects for affordable housing at an approximate cost of Rs.5,000 crores to Central budget.

Central Assistance under the scheme will be limited to least of following:

• Rs. 50,000 per Dwelling Unit for all dwelling units taking EWS, LIG and MIG units together which are proposed in the project; nd
• 25% of the cost of all civic services (external and nternal) proposed in the Project.

HUDCO:

HUDCO has emerged as a major contributor in the housin during the last nearly four decades of its existence. There has been a significant
emphasis on housing for the under privileged sections f the society, in HUDCO’s operations. The soft financial terms for EWS and LIG housing
include lesser interest rates compared to other income group households, larger extent of the house cost extended as loan assistance, and a longer
repayment period.

A major focus is laid in HUDCO’s operations towards meet the requirements of housing for Economically Weaker Sections (EWS) and Low Income
Group (LIG) households. The terms covering the cost of the unit and loan amount are linked to the economic criteria specified in terms of their income.
Extensive assistance is also extended under this portf o schemes pertaining to IHSDP (Integrated Housing & Slum Development Programme) and
BSUP (Basic Services for the Urban Poor) beneficiaries of the JNNURM (Jawaharlal Nehru National Urban Renewal Mission) – a Government of India
scheme.

Financing For Affordable Housing By Private Developers / Builders:

A new category for financing for affordable housing by private developers/builders under different unit cost slabs has been introduced. The slabs and
corresponding interest rates would be applicable to all affordable housing projects to be undertaken by the private builders/developers.

b) Financial Institutions:

Several Financial Institutions have recognized the benefit to finance Affordable Housing. GOI has made available crores of rupees through NHB that
banks can tap for financing these projects. Following are a few FI’s (among several others) making their presence in the market through various home
loan and project financing products:

HDFC, Central Bank of India, GRUH Finance, DHFL are a few.

Part V - PLAYERS IN THE MARKET:

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The ultra-low cost housing (having a ticket size of less than Rs. 10 Lakhs), so far, has not been fully embraced at a large scale by the private real
estate development players in India. However, due to the large shortfall of housing units in this particular segment, the deman or housing units by the
economically weaker sections remains high and the segment is critical for increasing homeownership in India. With the Government trying to gather
momentum for the category further with the theme – ‘Housing for all’, the real estate industry is expected to soon harness the massive opportunities of
scale and scope at the base of the pyramid.

Ultra Low Cost Housing by Private Developers

Tata Housing Shubh Griha, Boisar, Mumbai

Shubh Griha, Vasind, Mumbai
Matheran Realty Tanaji Malusare City, Karjat, Mumbai
Value and Budget Housing Corporation Vaibhava, Bangalore
Marg Constructions Maha Utsav, Seeknankuppam, Chennai
Vijay Shanti Builders Lotus Pond, Kelambakkam, Chennai
Shapoorji Pallonji SP Sukhobrishti, Rajarhat, Kolkata
HDIL Paradise City, Palghar, Mumbai
CSC Builders CSC Callista, Bangalore
Usha Breco Realty Limited Chaya Nivas, Boisar, Near Mumbai
Spice Homes Griham, Meerut,

Source: Real Estate Intelligence Service (JLL), _Q10

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Part VI - CASE ILLUSTRATION:

In order to illustrate the financial viability of Affordable Housing, the following case study is pro , wherein, two proposals are worked out for the
same parcel of land. One is a conventional proposal and the other an Affordable Housing proposal. While comparing the two proposals, it will be
evident that returns on Affordable Housing are quite attractive, considering the lower investment. Both proposals include ancillary facilities like hospice
care, basic educational facilities, crèches, shopping, tertainment and other community activities.

Proposal for Residential Development:

Specifications proposed:

Affordable Housing Conventional Proposal

Rcc Frame & Slabs (Maivan) Rcc Frame Structure, C.I.S. Rcc Slabs
Rcc Walls (Maivan) C.C. Block Masonry
Vitrified Tile Flooring White Marble Flooring
Ms Windows & H.W. Doors Pvc Windows, H.W.Doors
One Lift For Each Cluster One Lift Per Cluster
Exterior Paint Exterior Plaster & Paint
Interior Paint Interior Plaster & Paint
Electrical Items, With Backup Luxury Electrical Items With Backup
Phone, Internet Phone, Internet, Wi-Fi
Sanitary Fixtures Luxury Sanitary Fixtures
No Plastering Work Toilet Tile Finish

(see following page for comparison charts)

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 RS. PER
DESCRIPTION COST / UNIT SQ.FT SFT
AMOUNT
COST OF LAND - ACTUAL 39197 1500 58795702
DEDUCT FOR ROAD WIDENING 2232
REMAINING LAND AVAILABLE FOR CONSTRUCTION 36965

COMMERCIAL HOUSING PROPOSAL - G + 5 FLOORS ( +

I
STILT)
39197 x
A
SUPER BUILT AREA @ 2.5 FAR 2.5 92413 2500 231033222
PARKING FLOOR 14786

B TYPICAL CLUSTER DETAILS AS FOLLOWS: S.FT

2 BHK - TYPE I - 800 SFT 2 PER CLUSTER 1600 2000000 2500
2 BHK - TYPE II - 950 SFT 2 PER CLUSTER 1900 2375000 2500
3 BHK - TYPE I - 1100 SFT 1 PER CLUSTER 1100 2750000 2500
3 BHK - TYPE II - 1250 SFT 1 PER CLUSTER 1250 3125000 2500
TOTAL OF 1 CLUSTER 6 NOS 5850 10250000 2500 14625000
(ROUNDED TO
NO OF CLUSTERS 16 16)
INCOME OF 16 CLUSTERS 234000000
TOTAL NO. OF UNITS 96
SBA ACHIEVED 92413
INCOME FROM PARKING 14400000
GROSS INCOME OF 16 CLUSTERS 248400000
C EXPENSES:
COST OF LAND 58795702
COST OF CONSTRUCTION 1000 92413289
COST OF BASEMENT 750 11089595

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 CIVIC AMENITIES 5000000
SUBTOTAL 167298586
ADMIN EXPENSES 12701414
TOTAL EXPENSES 180000000
D ROI (GROSS INCOME - TOTAL EXPENSES) 68400000
PERCENTAGE PROFIT ( ROI /T.EXP *100 ) 38

II AFFORDABLE HOUSING - G + 3 FLOORS (+ STILT)

39197 x
A
SUPER BUILT AREA @ 2.5 FAR (SBA) 2.5 92413 2500 231033222
PARKING FLOOR 14786

B TYPICAL CLUSTER DETAILS AS FOLLOWS: S.FT

STUDIO - 400 SFT 5 PER CLUSTER 2000 500000 1250 1500000
1 BHK -2 - 550 SFT 3 PER CLUSTER 1650 825000 1500 3300000
2 BHK - 650 SFT 1 PER CLUSTER 650 1072500 1650 2145000
TOTAL OF 1 CLUSTER 9 NOS 4300 6945000
(ROUNDED
NO OF CLSUTERS 21 TO22)
GROSS INCOME OF 20 CLUSTERS 159735000
TOTAL NO OF UNITS 198
SBA ACHIEVED 92413
INCOME FROM PARKING 12075000
GROSS INCOME OF 23 CLUSTERS 171810000
C EXPENSES:
COST OF LAND 58795702
COST OF CONSTRUCTION 850 78551295
COST OF BASEMENT 750 11089595
CIVIC AMENITIES 5000000

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 SUBTOTAL 153436592
ADMIN EXPENSES 11563408
TOTAL EXPENSES 160000000
D ROI (GROSS INCOME - TOTAL EXPENSES) 11810000
PERCENTAGE PROFIT ( ROI /T.EXP *100 ) 7
II.A OPTION WITH REDUCED COST OF LAND
E EXPENSES:
COST OF LAND 29397851
COST OF CONSTRUCTION 850 78551295
COST OF BASEMENT 750 11089595
CIVIC AMENITIES 5000000
SUBTOTAL 124038741
ADMIN EXPENSES 10961259
TOTAL EXPENSES 130000000
F ROI (GROSS INCOME - TOTAL EXPENSES) 41810000
PERCENTAGE PROFIT ( ROI /T.EXP *100 ) 32

The percentage of profit is about 38(%) for the conventional model. The Affordable model yield about 7% ROI. However, the projects can yield
attractive ROI of 32% if the Cost of Land is halved, ( s shown in Option II.A - Affordable Housing option) assuming other cost to be same.

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References:

1. India's next mega market, Hashish Karamchandani, Monitor, July 6, 2010

2. Guidelines For Affordable Housing In Partnership, Government of India, Ministry of Housing & Urban Poverty Alleviation
3. Monitor Group, http://www.monitor.com/in
4. Real Estate Intelligence Service (JLL)
5. AFFORDABLE HOUSING - Market Scenario in India, Mr. Hashish Jindal, Regional Director (North), Knight Frank India Pvt. Ltd
6. Constructionweekonline.in, June 23rd, 2010
7. HUDCO, www.hudco.org
8. Livemint.com & The Wall Street Journal, April 9th 2010
9. Financing for LIG, P.M.Apte, The Hindu, Madras
10. Guidelines for the projects on BASIC SERVICES TO THE URBAN POOR (BSUP), to be t under Jawahar Lal Nehru National Urban Renewal Mission
(JNNURM)
11. www.igbc.in

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