The real estate is doing very good with the property prices going over the roof. Innumerable infrastructure projects and big ticket efforts like the
Take pride in the fact that soon you will be in a city with global aspirations that will boast of infrastructure par excellence and a very international experience.
I now enjoy higher incomes, better lifestyles and all the other things the middle class now considers a routine and mundane part of their life.
I am happy. But can I rejoice? NO.
Around ten years ago, I could have afforded a house in
Now no longer.
Around two years ago, I could have afforded a house in New Bombay.
Now no longer.
I am progressively being edged out of the city that I call my home.
New
Every square inch of land is being auctioned off. If CIDCO has 500 plots to sell, it creates some sort of an artificial scarcity by only releasing say 5 plots at a time. We have innumerable builders who fight amongst themselves to grab the prized plots. The direct result of this bidding is that the plot under question gets grossly overvalued at the bidding stage itself. CIDCO is now doing to New Bombay realty exactly the opposite of what it was meant to do.
And now the builders pitch in to earn their profit over and above the over valued realty rates. The buyer is made to pay for ‘super built up area’ - area that is not even owned by her (mind you, this is everywhere now). [Since my emphasis in this post is about affordability of housing, I had better not deviate – the builder angle of the realty industry needs due attention – maybe in the next post!]
Is the government doing anything at all to control the situation?
The Housing Policy of the GoM drafted last year is yet to take shape. It does heavily emphasize on integrated townships to provide affordable housing to mainly the Economically Weaker Sections (EWS) and the Lower Income Group (LIG). Building affordable housing is to be incentivised by providing the developers with additional FSI and other incentives.
The in the pipeline ‘Aam Aadmi Awas’ of the GoI envisages to provide 45 million housing units to the LIG/EWS - all at just a lakh each. 270 sq feet dwellings with in house sanitation facilities and other recreational facilities to complement the settlements will surely provide at least a reasonably better standard of living. Interest subsidies are planned to try and take care of the funding aspect as well. Which means the LIG does have some concrete proposals to look up in anticipation to.
Now what about a normal middle class or a MIG (Middle Income Group) family which is too rich to fall into the LIG and too poor to fall in the UIG (Upper Income Group) to be able to afford a house in Bombay (well I specify Bombay because I reside here – the sorry state of affairs hold true for all major Indian cities)? It is the middle class which is the worst hit and is being marginalised with every passing day. The LIG, being the vote bank, (and honestly deserving the governments due attention too, at least in this case) is always considered by the Government in its policy making. The UIG does not need any pampering anyways.
Gets stuck, the middle class.
Do they need affordable housing? Yes.
Do they have affordable options? No.
Are they affluent enough in the government’s eyes? Yes.
Are they affluent enough to get themselves a place to call home? No.
I feel it is high time that the state played its role in making life a little easier for the MIG. The MIG wouldn’t need much – coz they are halfway there already. Instead of having a rigid cut off for interest subsidies, the government can have some sort of an inverse proportionality between the net income of the family and the interest subsidy they are eligible for. They can incentivise banks that hand out step up loans and thus help the MIG in buying better houses. Softening prepayment laws just in case they are able to cough up the finances required to pay off their dues to the bank, so that net outflow is restricted.
A few thoughts that require the governments’ action for me to find my dream home. Till then, it might just remain as my dream of a home…
3 comments:
Finally, a long blog after a very long time.
Your concerns are something that everyone, at least those who have no other option, share. Those who have friends in high places care a damn.
Indian administrators, at one point in time, knew the importance of planning, of having development commensurate to growth. But somewhere down the line, both administrators and politicians have come to believe that the people don't care so much for physical results as mere words. Cursing each other for the sorry state of affairs and then doing nothing about the same when in power is becoming a habit. The lesser said about the builder nexus, the better.
Your suggestions are interesting and innovative, which could be fruitfully expanded upon to deliver some very concrete results, amenable to everyone concerned (at least to those who 'really' matter).
Hey. Well your observations are quite apt. I liked the observation about CIDCO and artificial scarcity. The results of an unchecked administration. I guess it is in situations like these that public opinion(like yours) and local newspapers play the role of checking things in a democracy. Also, yes, there should be a way out for the MIG. But in the rapid growth of a city there are so many things at stake. Take New York for instance. Real estate there, to buy is only for the rich. If you want access or rent a place in new york, you would rather rent some place in Jersey City(which has lower taxes as well) and which is a neighbouring city(or some smaller suburb like the place I am at). It is the same of Boston. But what needs to be done is for adequate planning and to sustain the needs of a megacity, planned suburbs are a must and good commuter transport to and fro. The point I am trying to make is that you will get pushed out.
I think it is a worldwide phenomenon. The society, the way it is structured, does favor the rich. Whether we can do something to stem the phenomenon, well requires some more thought.
Yup when we speak of Bombay, yes very true when we say that we will be pushed out. But what do we do when that happens in its suburbs as well?
The disturbing thing is that I am being pushed out of a place that was created to cater to my needs and the needs of millions like me (And at a rate faster than Old Bombay!).
If thats what is called development, so be it. But it cannot be at the expense of the reason that they created New Bombay, and the teeming millions who rely on those policies for survival.
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