At the 24th CREDAI NATCON held in Kolkata, a significant topic of discussion among real estate developers was the need to redefine affordable housing. The Confederation of Real Estate Developers Associations of India (CREDAI) has expressed concern that the existing price cap of ₹45 lakh, established in 2019, is increasingly impractical. With rising costs associated with land acquisition, construction, and regulatory approvals, CREDAI argues that the definition of affordable housing should be based on area rather than a fixed price point. This shift is crucial, according to CREDAI President Shekhar Patel, as it would better reflect current market conditions and consumer needs.
Patel highlighted that the current limitation has become a barrier to the supply of affordable housing, noting that the share of such properties in residential sales has plummeted from approximately 50% to just 14%. In discussions with government entities, including the housing and finance ministries and NITI Aayog, CREDAI is advocating for an increase in the area designated for affordable housing units. Specifically, they propose raising the size threshold in metropolitan areas from 60 square meters to 90 square meters, and in non-metropolitan regions from 90 square meters to 120 square meters. This adjustment aims to enhance the attractiveness and viability of affordable housing projects for both developers and potential homeowners.
The challenges faced by developers in increasing the supply of affordable housing are primarily attributed to escalating input costs and taxation. Patel pointed out that taxes imposed by central and state governments, as well as municipal corporations, can account for 30% to 50% of a home's sale price, which severely limits the financial feasibility of these projects. He emphasized the need for collaborative efforts with the government to address these constraints and is optimistic that policy initiatives will be forthcoming within the next six months to stimulate both supply and demand in the affordable housing sector.
During the conference, West Bengal Finance Minister Swapan Dasgupta also spoke on the necessity of revising certain regulatory frameworks, such as the Urban Land (Ceiling and Regulation) Act of 1976, which he deemed restrictive to development efforts. He called for the involvement of organized developers to bring order and accountability to the housing market in West Bengal, expressing a desire for large-scale developers to engage in upcoming mega projects planned for the state. The discussions at the CREDAI NATCON underscore a growing recognition among industry stakeholders that a redefined approach to affordable housing is essential for addressing the current housing crisis while ensuring sustainable development in the real estate sector.
