Unresponsive land and real estate markets are severely affecting affordability of housing in Indian metropolises. Absence of affordable housing in the formal sector have resulted in many households seeking solutions in the informal sector. This has resulted in a rise in slums and unauthorised housing (that is, housing that is of poor and unsafe quality of construction or which may be illegally constructed). According to the 2011 census, around 17.4 percent of India’s urban population were living in slums. The Ministry of Housing and Urban Poverty Alleviation, Government of India estimated that in the year 2012, the urban housing shortage in India was around 18-19 million.
The theme of the first IDFC Institute India Development Review is housing affordability in Indian cities. The report will explore how outdated and excessive planning regulations distort house prices and supply. It will further document the difficulties developers face in constructing new stock of housing. The problem of affordable housing can be addressed by increasing the stock of rental housing and urban land supply in India. Thus, the report will assess the suitability of rental market in the context of rapid urbanisation. Low-cost and reliable mass public transit in cities increases access to opportunity by opening new land and housing markets and reducing the cost of housing. The report will explore the catalytic impact of transportation investments, and makes recommendations to integrate housing and transportation policy. Finally, the report will provide executable solutions to influence policy making in order to enable housing markets to be more affordable in urban India.