Mumbai: Unavailability of urban land, insufficient transport led to demand-supply gap for affordable housing, finds report – The Indian Express

Mumbai registered a high demand for affordable housing units with 67 percent of the demand concentration being registered for units costing less than Rs 25 lakh. The demand concentration for housing units in the range of Rs 25 lakh to Rs 50 lakh was recorded at 13 percent and units above Rs 50 lakh at 20 percent.

Despite the strong interest in this segment, the affordable housing supply has not been able to cater to the demand, according to the report. The supply of housing units above Rs 50 lakh recorded the highest concentration at 44 percent followed by units in the range of Rs 25 lakh to Rs 50 lakh at 34 percent. The supply concentration for housing units less than Rs 25 lakh was recorded the lowest at 22 percent, clearly showcasing the huge supply gap for urban affordable housing in the region.

The report further highlights that approximately 10 lakhs of apartment supply were added by the developer-built housing in the last decade. Unavailability of urban land for affordable housing, insufficient transport and social Infrastructure to support distant neighbourhoods, easy access of finance for development of affordable housing projects, lengthy statutory clearance and approval processes are some of the key shortcomings which are leading to shortage of affordable housing supply in the region.

Shishir Baijal, Chairman and Managing Director at Knight FrankIndia, said, “Mumbai, once a city of choice due to its excellent livability and economic promise, has more recently been grappling with strained infrastructure and poor quality housing. The city’s biggest challenge is in terms of providing housing for its inhabitants, unfortunately, the majority of the city is forced to live in either substandard housing options in the corecity or in peripheral locations. The estimated demand over the next five years is 8,50,000 housing units which will be an uphill task if a proper strategy is not put in order. This demand can be met with a focus on building affordable housing townships in the peripheral areas of the city, backed by robust infrastructure and travel options.”

Regarding the price willingness of an individual for buying a house, 38 percent of the respondents would prefer to buy housing units priced less than Rs 15 lakhs. 26 percent of the respondents preferred a budget of Rs 16 lakh to Rs 25 lakh, whereas 36 percent of the respondents had a budget of more than Rs 25 lakh for buying a house.

Gautam Thacker – President, NAREDCO NERAL-KARJAT and Managing Partner, ONEarth said, “Mumbai has had successful stories of alternative destinations like Navi Mumbai and Thane. But as the city continues to expand across different parts and regions, we feel there is a need to create a new mission of ‘Mumbai 3.0’ that would be dedicated to developing affordable townships and promoting home ownership. The current housing gap in the city requires a ‘planned city’ that would be sustainable, affordable and carbon neutral located around the core city of Mumbai, which is backed by strong infrastructure. These future developments will need combined efforts between the state government, local development authorities as well as the development companies.”

According to the report, Mumbai registers almost 20,000 to 50,000 residential leave and license agreements every year. Considering an average annual number of 35,000 leave and license agreements with an average tenure of 22 months and adding additional consideration of non-registered agreements, the total pool of active residential tenants in Mumbai works out to almost 1 lakh units.

The MMR region witnessed registration of over 1,05,984 residential leave and license transactions since January 2020. Nearly 97 percent of all people living in rented accommodation are willing to purchase and move to a better housing unit if the travel time is less than 1.5 hours from their place of work. However, 64 percent of the respondents have a budget of less than Rs 25 lakh.

A survey focusing on an average working-class city resident found that 32 percent of the respondents live in houses owned by families, 36 percent living in rented accommodation, while 27 percent of the respondents live in self-owned houses. The survey further tracked the housing journey of an immigrant which stated that 56 percent of the immigrants reside within the Mumbai Island city, whereas 27 percent decided to stay in Mumbai Suburban region and 17 percent decided to travel from the peripheral locations such as Navi Mumbai, Thane, Vasai-Virar etc.

On an average, migrants spend an initial 10-12 years in rented accommodations. The home ownership journey cited that 100 percent of the respondents, who had been in the city for less than 10 years, lived in a rented accommodation. Home ownership rates gradually improved from 25 percent for people in the city for 11-15 years to 75 percent for people living in the city for more than 15 years.