HOUSING

AS 503 MODULE 5

TKMCE
HOUSING -NBO

The paradox of Indian economic growth manifests itself in several ways. On one hand Urban
India has high housing shortage, on the other hand there is a massive and rapidly growing
stock of vacant houses. In case we adapt business as usual scenario, with no major change in
the interventions envisioned by public agencies, we may take trends in the growth in number
of households (HHs) and housing stock and consider the difference of the second from the
first as the shortage. This approach was adopted partially by the Ministry of Housing & Urban
Poverty Alleviation (HUPA).Interestingly, despite the rapid growth in number of urban
households, there will be no housing shortage by the middle of Twelfth Plan period, as per
this approach. This is because the growth in the housing stock has been high in recent years,
despite the speculation of the bubble bursting all the time.

Estimation of Urban Housing Shortage (2012):

Department of Architecture TKMCE College of Engineering, Kollam KTU University

Distribution of Housing shortage across major States

Household Amenities (Census 2011 results)

Drinking water: Eighty Seven per cent of households use tap, tube well, hand pump and
covered well as source of drinking water including 32% households using Tap water from
treated sources. 47% of households have source of water within the premises (R – 35%; U –
71%) whereas 36% of households have to fetch water from a source located within 500 m in
rural areas/100 m in urban areas.18% still fetch drinking water from a source located more
than 500 m away in rural areas or 100 m in urban areas

Department of Architecture TKMCE College of Engineering, Kollam KTU University

Electricity: Use of electricity as main source of lighting has increased by11 pts to 67 %
(compared to 2001) whereas use of kerosene has declined by 12 pts accounting for 31 % of
households in 2011. Proportion of households using electricity (%) is tabulated below

Latrine Facility: Forty seven % of households have latrine facility (R-31%, U-81 %) including
36 % with water closet. There has been 11% decline in households having no latrine.

Department of Architecture TKMCE College of Engineering, Kollam KTU University

HUDCO (1970 – 2020)

The Housing and Urban Development Corporation Limited (HUDCO) is a government-owned

corporation in India. One of the public sector undertakings (PSU), it is listed Company on NSE
and BSE with major shareholding of Government of India holding (89.81%) and is under the
administrative control of the Ministry of Housing and Urban Affairs.

This institution was came into existence on 25, April, 1970 as a private limited company under
the complete ownership of Indian Government with an equity base of Rs. 2 crore under the
Companies Act, 1956. It was created against the backdrop of housing deficit in India in 1960s
and 70s, with the objective of addressing issue of housing finance and playing role in urban
infrastructure development. The organisation provides finance for setting up of new towns
and also works as consultancy services for the projects of designing and planning relating to
Housing and Urban Development programs in India as well as abroad. HUDCO won UN-
Habitat Scroll of Honour Award for the contributions to the development of housing in 1991.
The institution was conferred with miniratna status in 2004

Objectives

 To provide long term finance for construction of houses for residential purposes or
finance or undertake housing and urban development programmes in the country.
 To finance or undertake, wholly or partly, the setting up of new or satellite town.
 Help State Housing (and or Urban Development) Boards, Improvement Trusts,
Development Authorities etc., specifically for the purpose of financing housing and
urban development programmes.
 To finance or undertake the setting up of industrial enterprises of building material.
 To promote, establish, assist, collaborate and provide consultancy services for the
projects of designing and planning of works relating to Housing and Urban
Development programmes in India and abroad.

Department of Architecture TKMCE College of Engineering, Kollam KTU University

Building Sector Movements

The Building Centre Movement was launched by the Government of India, Ministry of Housing
Urban & Poverty Alleviation through HUDCO in 1988. Building Centres are playing a significant
role not only in the construction of cost effective liveable, durable, aesthetic, in short say as
affordable and acceptable houses by using cost effective, appropriate, intermediate and
sustainable technologies. Generating substantial employment opportunities by training not
only in the conventional technologies but also in the cost effective building material trades.

Infrastructure

HUDCO started financing for development of infrastructures in 1989. The priority was giving
for infrastructure facilities including projects in the sectors of drainage, electricity, water
supply, sewerage, solid waste management and roads in the urban areas. Later the social
infrastructure components like primary schools and play grounds, hostels for working
women, healthcare centres, police stations and jails, courts, etc. received benefit of funding
for low cost.

Road and Transport

HUDCO has provided term loans for construction of roads and other transportation sectors
which includes construction of Airport, Railways, Ports, Metro Rails, Bridges and Flyover,
Railway Over-bridges, Subways, Bypasses, Bus Terminal, Parking complexes, Purchase of
public transport vehicles, Bus Stops/stations, Intelligent Traffic Management system etc.
Airports projects of Cochin International Airport and Calicut International Airport in Kerala
are supported by HUDCO. The infrastructure for Kerala State Road Transport Corporation and
UPSRTC are also funded by them. HUDCO sanctioned 100 crore rupees for KSRTC in 2002 for
purchasing 550 buses and 350 mini-buses and 260 crores in 2014 for purchasing 1500 buses.

Sewerage and Drainage

HUDCO has sanctioned 58 schemes with a project cost of Rs 675 crore to provide new systems
and to augment the existing systems.

Water Supply

295 water supply schemes, with a project cost of Rs 5,285 crore was funded by HUDCO. In
2016 HUDCO has also given finance to Nellore's underground drainage project proposed by
Nellore Municipal Corporation.

Department of Architecture TKMCE College of Engineering, Kollam KTU University

National Housing Bank

National Housing Bank (NHB), a Government of India owned entity, was set up on 9 July 1988
under the National Housing Bank Act, 1987. NHB is an apex financial institution for housing.
NHB has been established with an objective to operate as a principal agency to promote
housing finance institutions both at local and regional levels and to provide financial and other
support incidental to such institutions and for matters connected there with. The Finance Act,
2019 has amended National Housing Bank Act, 1987. The amendment confers the powers of
regulation of housing finance companies to Reserve Bank of India.

NHB registers and supervises Housing Finance Company (HFCs), keeps surveillance through
On-site & Off-site Mechanisms and co-ordinates with other Regulators.

Vision

"Promoting inclusive expansion with stability in housing finance market"

Mission

"To harness and promote the market potentials to serve the housing needs of all segments of
the population with the focus on low and moderate income housing"

Objectives

NHB has been established to achieve, inter-Alia, the following objectives –

1) To promote a sound, healthy, viable and cost effective housing finance system to cater
to all segments of the population and to integrate the housing finance system with
the overall financial system.
2) To promote a network of dedicated housing finance institutions to adequately serve
various regions and different income groups.
3) To augment resources for the sector and channelise them for housing.
4) To make housing credit more affordable.
5) To regulate the activities of housing finance companies based on regulatory and
supervisory authority derived under the Act.
6) To encourage augmentation of supply of buildable land and also building materials for
housing and to upgrade the housing stock in the country.
7) To encourage public agencies to emerge as facilitators and suppliers of serviced land,
for housing

Department of Architecture TKMCE College of Engineering, Kollam KTU University

The National Buildings Organisation (NBO) was established in 1954 as an attached office
under the Ministry of Housing and Urban Affairs (the then Ministry of Works and Housing) for
technology transfer, experimentation, development and dissemination of housing statistics.
In the context of formulation of Housing Policy and Programmes, study of socio-economic
aspects of housing issues and the increased need for housing statistics, NBO was restructured
in 1992. NBO was further restructured in March, 2006 with the revised mandate keeping in
view the current requirements under the National Housing Policy, and various socio-
economic and statistical functions connected with housing and building activities.

The mandate of the NBO in its restructured form is as follows: -

 To collect, collate, validate, analyse, disseminate and publish the housing and building
construction statistics.
 To organize training programmes for the officers and staff of the State Government
engaged in collection and dissemination of housing and building construction
statistics.
 To create and manage a documentation centre relating to housing, poverty, slums and
infrastructure related statistics.

Citizen Charter Document for National Buildings Organisation (NBO) 2019-20:

Vision

To emerge as a knowledge centre of excellence at the national level for matters related to
collection, collation, compilation, reporting and analysis of urban poverty slums, housing,
construction and other urbanization-related statistics.

Mission

The National Buildings Organization (NBO) is an attached office of the Ministry of Housing &
Urban Affairs and, \ has been entrusted with the work of collection, tabulation and
dissemination of statistical information on housing and buildings construction activities in the
country with appropriate database, MIS and knowledge input, in order to support the
schemes being implemented by the Ministry.

Objective

 Collection and dissemination of data on housing and slums to further the goals of
Planning and Policy making.
 Advocacy and capacity Building for Programmed achievement.
 National Resource centre / Knowledge for Housing, Urban Poverty and Slums.

Department of Architecture TKMCE College of Engineering, Kollam KTU University

  The statistics so collected and tabulated is available from NBO in the form of published
publications and also put the entire information on NBO's website.
 To support the Ministry of Housing & Urban Affairs and Other Ministries with an
information base and knowledge inputs for the purpose of planning, policy-making,
and Implementation, particularly in the context of programmes relating to slums and
Housing.

Role of NBO in various major activities of MoHUA

 Organizing and conducting of all Central Sanctioning & Monitoring Committee (CSMC)
and review meetings of Pradhan Mantri Awas Yojana (PMAY) under Housing for All
(Urban) and Jawaharlal Nehru National Urban Renewal Mission (JNNURM).
 The NBO is works closely with organizations like National Housing Bank (NHB),
National Information Centre (NIC), Office of Registrar General of India (RGI), National
Sample Survey Office (NSSO) and other agencies.
 Of late, the Ministry of Housing & Urban Affairs has assigned a task to NBO for
collection and compilation of data on number of houses in respect of EWS/LIG from
all 4041 statutory towns (as per Census 2011) constructed/being constructed by
State/UT governments.

Major activities of the Organisation:

NBO is primarily engaged in collection, collation, analysis and dissemination of housing and
buildings construction statistics with a view to have an effective countrywide system for this
purpose. In addition, the Organisation coordinates activities relating to the information
emanating from various sources, namely, the Registrar General of India, National Sample
Survey Office and other concerned organizations. The statistics collected and disseminated
by NBO is not only used in policy formulations but is also used by the various research
organizations in the field of housing.

Building Related Information & Knowledge System (BRIKS):

To develop a state-of-the-art fully computerised Management Information System on

housing and building statistics. The e-unit in NBO will be up-linked to state Governments
Departments of /Bureaus of Economics & Statistics, Municipal Administration, Municipal
Corporations, Municipalities etc.

The National Statistical commission recommended for looking into the various aspects of the
entire construction sector for formulation of policies of national interest, specifically to access
the impact of the various policies of the Ministry. A Technical Advisory Committee (TAC) on
construction statistics was set up to look in to the various aspects of the construction sector
like the current status of data, data gaps, methodological problems, review the system of
regular data collection etc.

Department of Architecture TKMCE College of Engineering, Kollam KTU University

Town and Country Planning Organization (TCPO)
Town and Country Planning Organisation (TCPO) was set up in 1962 with the merger of the
erstwhile Town Planning Organization (TPO) and Central Regional and Urban Planning
Organization (CRUPO).

TPO was set up in 1955 to formulate the First Master Plan for Delhi. The TPO completed the
assigned task of formulation of Master Plan for Delhi in September 1962 and as such the main
function of TPO was over.

Simultaneously, in 1957, Government of India set up another organization called Central

Regional and Urban Planning Organization (CRUPO) to evolve a plan for Delhi Region and to
advise on the development of steel towns, river valley projects and other matters related with
urban and regional planning. CRUPO started functioning activity from September 1959 in an
advisory capacity to the Central Ministries of the Government of India, Planning Commission,
State Governments, Local Bodies, and Public Undertakings. The organization also initiated
studies on various aspects of urban and regional planning and development.

The role and functions of the Town and Country Planning Organisation can be defined broadly
in four distinct areas, namely:

 Policy formulation and guidance at national, regional and local levels for planning and
development of urban areas of various categories ranging from small town to super-
metro/mega cities
 Assistance and technical advice including implementation and monitoring of central
sector projects, programmes and schemes
 Undertaking empirical research studies and evaluation of already adopted practices
for wider application and replication
 Preparation of Manuals and Guides in various aspects of planning and development
 Conducting training programmes for in-service planners and urban managers in
topical areas of interest for up-dating the knowledge in the field of urban and regional
planning and development
 Preparation of inter-state regional plans
 Developing Urban and Regional Information System and Urban Mapping System

Vision

To foster innovative and responsive urban & regional development policies and practices for
planned development

Mission

To facilitate sustainable and inclusive human settlement planning in India.

Department of Architecture TKMCE College of Engineering, Kollam KTU University

Roles & Functions

As a technical wing of the Ministry of Housing and Urban Affairs, TCPO has been playing an
important role in formulating policies, programmes and strategies for urban development in
the country. The Organisation is responsible for providing assistance and advice of highest
order to Central and State Governments, Public Sector Agencies, Development Authorities
and Urban Local Bodies on matters pertaining to urban & regional planning and development.
Apart from non-plan functions, TCPO also monitors specific plan schemes of the Ministry of
Housing and Urban Affairs. The major functions of the Organisation are grouped in the
following areas:

 TCPO as an apex Organisation in the field of Urban & Regional Planning and
Development provides knowledge support and technical advice and assistance to
various State Govts., Development Authorities, ULBs, other agencies etc.
 Technical assistance and guidance to the Ministry of Housing and Urban Affairs, NITI
Ayog, other Central Ministries / Agencies.
 Research studies in areas of topical interest.
 Manuals and Guidelines on various aspects of planning and development.
 Training & Capacity Building, Conferences and Workshops in the field of urban &
regional planning and development and Remote Sensing and GIS applications in Urban
& Regional Planning.
 Appraisal and monitoring of central sector projects / Schemes.

“Model Building Bye-Laws- 2016”

Building Bye-Laws are legal tools used to regulate coverage, height, building bulk, and
architectural design and construction aspects of buildings so as to achieve orderly
development of an area. They are mandatory in nature and serve to protect buildings against
fire, earthquake, noise, structural failures and other hazards. In India, there are still many
small and medium sized towns which do not have building bye-laws and in the absence of any
regulatory mechanism, such towns are confronted with excessive coverage, encroachment
and haphazard development resulting in chaotic conditions, inconvenience for the users, and
disregard for building aesthetics, etc. It is in this context, TCPO has made an effort to prepare
“Model Building Bye-Laws- 2016” for the guidance of the State Governments, Urban Local
Bodies, Urban Development Authorities, etc which is an improvement over the previous
Model Building Bye Laws brought out in 2004.

Department of Architecture TKMCE College of Engineering, Kollam KTU University

The salient features of MBBL (Model Building Bye-Laws) - 2016 are given as under -

 Safety and security (Chapter-6): includes Structural Safety, Disaster management as

per Prof. Arya Committee Report and BIS Codes including Structural Design Basis
Report (SDBR) for various building types. Prevention measures against “Soft Storeys”
in multi-storeyed buildings and Proof Checking of Structural Design for buildings.
 Barrier Free Environment: Provisions for Differently abled, Elderly and Children
including Site development, Access Path/ Walk Way, Parking, Building requirements,
Stair, Lifts, Toilets, Drinking Water, Refuge and signage.
 Environmental Concerns: Additional Chapter-10 incorporated for Green Buildings and
Sustainability provisions, Rainwater Harvesting, Wastewater Reuse and Recycle and
installation of Solar Roof Top PV norms.
 Adoption for Modern Construction Technology: Additional Chapter-5 incorporates
Definitions, Structural Safety and other provisions for High rise Building regulations
with Parking, Peripheral Open Spaces including set-backs. Disaster Management &
Fire Safety.
 Swachh Bharat Mission: Revised Norms for adequate toilet facilities for women and
Public Conveniences in Public Buildings and Mandatory Provisions for Segregated
toilet facilities for visitors in Public Buildings.
 Ease of Doing Business: Additional Chapter-14 includes Provision for Online Building
plan approval process adopting automated systems of plan scrutiny, generation of
reports/approvals and integrated systems of intimation of approval,
 Compliance report from drawings for automatic generation of Completion certificate
and integration of various clearances at Master Plan levels and introduction of
Integrating “Single Window” process, Empowering Architects, Outsourcing non-
discretionary verification jobs and formulation of Citizen’s Charter.
 Rain Water Harvesting: Additional Chapter-9 Indicative Provisions for harvesting in
various types of buildings along with responsibility of ULBs for RWH in public spaces,
provisions for Enforcement and Monitoring.
 Effects of Communication Technology: Additional Annexure –I, Draft Guidelines for
mitigation of Electro Magnetic Radiations in built spaces by identifying emission
appliances/ sources. Guidelines for safe spacing of indoor and outdoor appliances and
equipment.

Department of Architecture TKMCE College of Engineering, Kollam KTU University

Building Materials and Technology Promotion Council (BMTPC)

In order to bridge the gap between research and development and large scale application of
new building material technologies, the erstwhile Ministry of Urban Development,
Government of India, had established the BUILDING MATERIALS AND TECHNOLOGY
PROMOTION COUNCIL in July 1990.

The Council strives to package proven innovative technologies for the benefit of
entrepreneurs interested in setting up manufacturing units in tiny, small, medium and large
scale sectors.

There has been a demand for setting up such an apex institution in order to provide an inter-
disciplinary platform to various agencies under Central and State Governments and the
private sector for scaling up proven technologies to enhance their wide-spread use and for
assisting commercial production as well as systematic dissemination of appropriate
technology for the benefit of the construction of appropriate technology for the benefit of
the construction agencies and different sections of the population.

The Council is structured to undertake the task of the extension and application of
technologies and materials developed by research institutions on the ground with the backing
of financial institutions and enabling regulatory environment.

Constitution

The Building Materials & Technology Promotion Council (BMTPC) was set up in 1990 by the
then Ministry of Urban Development (now Ministry of Housing & Urban Affairs), Government
of India, as an apex level inter-ministerial institution for promotion, development and large
scale dissemination of new, cost effective, innovative, energy-efficient, environment-friendly
and disaster resistant building materials and construction technologies from lab to field.

Vision

BMTPC to be world class knowledge and demonstration hub for providing solutions to all with
special focus on common man in the area of sustainable building materials, appropriate
construction technologies & systems including disaster resistant construction.

Department of Architecture TKMCE College of Engineering, Kollam KTU University

Mission

To work towards a comprehensive and integrated approach for promotion and transfer of
potential, cost-effective, environment-friendly, disaster resistant building materials and
technologies including locally available materials from lab to land for sustainable
development of housing.

Objectives

 Building Materials & Construction Technologies: To promote development,

standardization, mechanization and large scale field application of innovative and
emerging building materials and technologies in the construction sector.
 Capacity Building and Skill Development: To work as a Training Resource Centre for
capacity building and promotion of good construction practices to professionals,
construction agencies, artisans and marketing of building technologies from lab to
land.
 Disaster Mitigation & Management: To promote methodologies and technologies for
natural disaster mitigation, vulnerability & risk reduction and retrofitting/
reconstruction of buildings and disaster resistant planning for human settlements.
 Project Management & Consultancy: To undertake project management and
consultancy services including appraisal, monitoring and third party inspection of
housing projects under the various Central/State Schemes.

Major Thrust Areas

 Identification, evaluation and promotion of proven and emerging housing

technologies available for housing sector nationally and internationally.
 Promoting speed, economy, efficiency and quality in construction.
 Creating enabling eco-system for mass application of technologies through up scaling
of technologies, know-how acquisition, absorption and dissemination.
 Field level application of environment-friendly, energy-efficient and disaster resistant
technologies for proven, locally available and emerging technologies, through
demonstration construction.
 Formulation of Specifications, Schedules, Standards on proven building
materials/technologies including emerging technologies/systems.
 Documentation of benefits, durability and acceptability of cost effective and
innovative building materials and technologies.
 Skill up-gradation of professionals and construction workers through capacity building
programmes, training programmes, seminars, conferences, workshops, exhibitions
nationally as well as internationally.
 Promoting disaster resistant construction technologies.

Department of Architecture TKMCE College of Engineering, Kollam KTU University

 Housing Board in India

Almost everyone in India, irrespective of the state he belongs to, has heard the name of
Housing Board. Though the name floats in the India as a foul smell and is considered a
nuisance, there are more misconceptions attached to it than we the facts we know.

There are at least 17 Housing Boards across India, and they have been formed with the
purpose of expansion and proper development of rightly planned and properly located
colonies in their respective states. Establishing a housing board in India was never easy, as it
needed extensive research, months of hard work and lot of efforts by the state government
of the respective states.

The low home loan rates have made it quite easy for the masses to step up and own a house.
This has further improved the responsibilities of the housing boards across the country.

Aim of Housing Boards

The main aims of these boards are to maximize the usage of available resources and
contribute extensively towards urbanization of a locality. Let us see some of the prime
objectives of these housing boards in India –

 Construct houses and allocate them as per the income levels - high income, middle
income and low income groups.
 Formulating self-financing schemes to help high income and middle income groups.
 Assure housing solutions to the needy at affordable prices.
 Construct multi-storied apartments, shops, commercial establishments and rent them
to raise enough funds for financial security of the boards.
 Site selection and distribution of properties

Department of Architecture TKMCE College of Engineering, Kollam KTU University

 THE KERALA STATE HOUSING BOARD
This department is functioning as the nodal department in the housing sector engaged in the
co-ordination of various housing schemes in the state. The Department is headed by a
Secretary. The Kerala State Housing Board and Kerala State Nirmithi Kendra are the major
enterprises under the Department of Housing. The office of the Housing Commissioner is also
under the control of Housing Department.

Mission & Vision

The primary objective of the Housing Department is to formulate and implement various
housing construction schemes as well as housing loan schemes for catering the housing needs
of public belonging to various income groups’ viz. Economic weaker sections, low income
group, middle income group and high income group. In addition to this, general improvement
schemes (like commercial cum office complex), government directed schemes (like Rental
Housing Schemes, slum improvement schemes, housing complexes for EWS, Rehabilitation
Housing Scheme, Revenue Towers etc.) And deposit work (ie. Taking construction of work of
other agencies) also forms part of activities of the Housing Department.

Department Sections

Line departments

1. Kerala State Nirmithi Kendra

2. Kerala State Housing Board

3. Office of the Housing Commissioner

Major Functions of the department

Achieve the goal of ' House for all' by implementing Housing Policy.

Services & Activities

 Services of Kerala State Nirmithi Kendra

 Provide effective and standardised services to the general public through housing
board.
 Ensure sincere services to the beneficiaries of the various schemes
 To implement new schemes for attaining the goal of dream home of all houseless

Department of Architecture TKMCE College of Engineering, Kollam KTU University

Activities

 Implement Housing scheme for achieving house for all

 Become self-sufficient in the field of housing construction
 Attain shelters at low cost for public, especially for economically weaker sections
 Modernization of Housing sector by providing high quality materials
 Build earthquake resistant houses and rehabilitation colonies for those who are
suffering from natural calamities
 Controlling the prices of building materials by increasing the production through
Government controlled institutions
 To assess the demand of the public and to formulate housing schemes by acquiring
land in bulk.

ACT, 1971 (As Amended by Act 16 of 2000)

An Act to provide for the organized direction and planning in the preparation and execution
of housing and improvement schemes and for the establishment of a State Housing Board in
the State of Kerala.

Preamble: WHEREAS it is expedient to provide for the organized direction and planning in the
preparation and execution of housing and improvements schemes

CONSTITUTION OF THE BOARD

Creation and incorporation of the Board:-

The duty of carrying out the provisions of this Act shall, subject to the restrictions, conditions
and limitations therein contained, be vested in a Board to be called “The Kerala State Housing
Board”; and such Board shall be a body corporate and have perpetual succession and a
common seal, and shall by the said name sue and be sued.

Constitution of the Board: -

The Board shall consist of a Chairman who shall be a non-official appointed by the
Government and of the following other members, that is to say:-

a) Housing Commissioner to the Government, ex-officio, who shall also be the Secretary
of the Board,
b) Four officials to be appointed by the Government, and
c) Non-officials to be nominated by the Government, one of whom shall be an Engineer
or Architect who possesses experience in housing and who is not employed by the
Government or a local authority or a Corporation owned or controlled by the
Government and of whom at least two shall be persons belonging to Scheduled Castes
or Scheduled Tribes

Department of Architecture TKMCE College of Engineering, Kollam KTU University

 Public Private Partnerships for Affordable Housing
There are a number of challenges facing affordable housing. High cost of land, which is the
consequence of a number of factors, is one of the principal challenges. Financing the land is
another major challenge that Developers/ Builders face in delivering affordable housing. The
absence of a clear title is also a serious deterrent for participation by financial institutions and
real estate developers in new as well as redevelopment projects of real estate. In the absence
of redevelopment and densification of available lands, land remains underutilized - further
contributing to shortage of land and to high land prices.

For any strategy to enhance the provisioning of affordable housing, therefore, government
interventions through financial and non-financial support as well as through policy reforms
would be critical. Financial subsidies, subsidies in kind (e.g. in the form of government land)
as well as cross-subsidies will have to play a central role in addressing the problem of vast
sections of India’s population being unable to afford housing at market prices.

Key Objectives of using PPP in Housing/Affordable Housing

The fundamental strategy underlying Public Private Partnerships as an implementation

strategy for affordable housing is to combine the strengths of the private sector with those
of the public sector in order to overcome challenges faced by affordable housing and to
achieve superior outcomes. However, the success of PPP as a strategy will depend critically
on designing PPP structures that make an appropriate allocation of risks, responsibilities,
rewards and penances, and create the incentives for value creation. This is at the heart of the
policies and contractual structures to be created for different PPP strategies to address the
challenge of affordable housing.

 Enhancing Access to Low Cost Land:

 Private Land for affordable housing in exchange for permission to build high-end
housing:
 Government Land for affordable housing by unlocking unutilized/underutilized
parcels of government owned lands:
 Land for affordable housing through Redevelopment of underutilized urban areas:
Land for affordable housing through Policy reform on Change of Land Use (CLU) of
Agricultural Lands:
 Reducing Costs through Efficiency Gains in Construction and Operations:
 Access to Financing and Capital Markets:

Department of Architecture TKMCE College of Engineering, Kollam KTU University

Salient Features

Preparation of technical guidelines by Public Authority

Design Build & Finance by Private Sector

Maintenance by the Beneficiary

Public Authority to compensate the Private Sector Partner

Beneficiary Identification by Public Authorities

Distribution

Payments by Allotters

Financial Assistance to Allotters

Public Private Partnerships for Trunk Infrastructure

Risk Sharing

Bid Parameter

Model 2: Mixed Development Cross-subsidized Housing (MDCH)

Model 3: Annuity Based Subsidized Housing (ABSH)

Model 4: DBFMT –Annuity cum Capital Grant based Subsidized Housing (AGSH)

Model 5: Direct Relationship Ownership Housing (DROH)

Model 6: Direct Relationship Rental Housing (DRRH)

Department of Architecture TKMCE College of Engineering, Kollam KTU University

Housing Finance across Countries
While in high-income economies mortgages are widely available and routinely used for
consumer financing of housing, many low and lower-middle-income countries only register a
few thousand loans or a few hundred in some cases. As an example, total mortgage debt
outstanding in the Netherlands is equivalent to 83% of GDP, whereas it amounts to less than
1 percent of GDP across many low- and lower-middle-income countries in Asia and Africa.

Housing Finance in India: Challenges and Issues

House is a centre and domestic device for mankind's moral and core development ever since
the dawn of evolution and civilisation. Housing is one of the basic requirements that human
beings need. Good housing is a pre-requisite for human development and welfare. It provides
shelter, security, amenities and privacy to the human beings for decent living.

There are many things that people would find difficult, if not impossible to do without good-
quality housing. Housing shortage is a universal phenomenon. Without good housing, people
cannot realise their full potential and carry on the life they want to lead. Good housing reflects
the general welfare of community, whereas bad housing leads to serious consequences such
as diseases, immorality, and juvenile delinquency.

Housing is also an investment activity and provides impulsion to economic growth. It has both
forward and backward linkages. Because of its forward and backward linkages, even a small
initiative in housing will drive multiplier effect in the economy through the generation of
employment and demand. Housing finance is not a new concept in finance sector of India. It
has developed rapidly during last few decades due to the enthusiastic interest of Government
to cut-short the housing problem of the country. Although, present environment of finance
sector seems to be suitable for uninterrupted growth of housing finance market, but there
are few general problems, which create challenges and issues directly and indirectly. This
paper is an attempt to reveal such problems and challenges in India.

Department of Architecture TKMCE College of Engineering, Kollam KTU University

Housing Finance: A Study of Experiences of Commercial Banks

Good housing is a pre-requisite for human development and welfare. It provides shelter,
security, amenities and privacy to the human beings for decent living. Without good housing,
people cannot realize their full potential and carry on the life they want to lead.

Good housing reflects the general welfare of the community, whereas bad housing leads to
serious consequences such as diseases, immorality, and juvenile delinquency. Deprivation of
a decent housing, in fact, becomes a threat to social harmony and economic prosperity.
Housing is also an investment activity and provides impetus to economic growth.It has both
forward and backward linkages. Because of its forward and backward linkages, even a small
initiative in housing will propel multiplier effect in the economy through the generation of
employment and demand.

Problem of Housing Finance

In India, the demand for housing has increased rapidly due to population growth, migration
from rural areas to urban areas, the decay of the existing housing stock and breakdown of
traditional joint families. The information technology revolution and rapid growth of
knowledge based industries in recent years have also further contributed to the already
growing acute shortage of housing India particularly in urban areas. Since housing requires
huge investment, a critical constraint for the development of housing is lack of finance.

Need and System of Housing Finance

Housing finance is basically required by both suppliers (builders) and users. The builders need
finance for land acquisition, purchase of building materials and construction related activities.
The household-users need finance for purchase / construction of new house or flat or house-
site, for repairs, renovation or extension of already existing houses. Housing being a long
durable asset, the finance required is generally a long term credit in nature.

As a durable asset, housing structure provides security for house finance. Hence it is made
usually against mortgage of house itself as security. Naturally it follows that to become eligible
for house finance, the borrower should be the owner of the house with clear title of
ownership. Housing finance, thus, enables individual households to acquire land and build
their own dwelling units with the basic amenities for a better standard of living.

Global Scenario in Housing Finance

In view of the critical importance of housing finance, it has been witnessing substantial growth
world-wide in the recent past. In fact, in many countries, it has been recognized as the driver
for economic growth. There were also many favourable factors, which also encouraged
housing finance boom. Lower inflation, lower interest rates and increasing real estate prices
provided the necessary environment for the growth of housing finance. With the recent spurt
in the GDP growth across many countries, people have been aspiring to realize their life time

Department of Architecture TKMCE College of Engineering, Kollam KTU University

dream of living in their own house of choice. Moreover, with the application of innovative
technology, data collection, processing and customer services have acquired efficiency
through automation and transaction costs reduced to the minimum. New delivery channels
have come into use in the IT environment. Many countries have tax incentives for the
borrowers. The legal regime was made lender-friendly with appropriate foreclosure laws. The
mortgage loan securitization route has helped the lending institutions to handle larger volume
of loans with lower regulatory capital requirement besides transfer of risks. All these factors
have contributed towards global growth in the housing finance.

Institutional Framework for Housing Finance in India

Traditionally, informal sectors played a major role in housing finance. Housing was considered
more as a family affair and private investment. The investment required, which was limited
and met either from family saving or borrowings from informal sources. With the rapid
growth of urbanization and improved income as a result of economic development since
Independence, the government recognized the critical importance of housing finance and
need for development of multi-institutional network to meeting the growing investment
needs of the housing sector. This chapter, therefore, focuses on the institutional development
for housing finance since Independence.

 To provide long-term finance or undertake directly construction of houses for

residential purpose in urban and rural areas
 To finance or undertake wholly are partly, the setting up of new satellite towns;
 To subscribe to the debentures and bonds to be issued by the State Housing Boards,
ACHFs and other housing agencies for the purpose of financing housing and urban
development programs;
 To finance or undertake the settings up of building materials industries;
 To administer the funds received, from time to time, from Government of India and
other sources as grants or otherwise for the purpose of financing or undertaking
housing and urban development programs in the country ;
 To promote, assist, collaborate and provide consultancy services for designing and
planning programs for housing and urban development.

HUDCO was constituted as a national body to finance housing and urban infrastructure
activities including housing.

Department of Architecture TKMCE College of Engineering, Kollam KTU University

 Housing Finance in India: Development, Growth and Policy implications

TRANSFORMATION OF INDIAN HOUSING FINANCE SYSTEM

The major focus of Government policies until 1970 was on agriculture and industry and
housing was not the priority sector. In the 1970s, a network of housing boards at state-level
was incorporated with the Housing and Urban Development Corporation (HUDCO) acting as
an apex body, providing finance and technical support to these boards. Majority of the
middle-class population was forced to finance housing by borrowing from informal sources
and their accumulated savings.

After the initiation of the liberalization process in India, the Government has taken number
of measures to promote housing finance from the formal sector and share the task of
providing housing finance with the private sector. Incorporation of National Housing Bank
(NHB) in the year 1987 as the controlling body to formalize housing finance is one of the
remarkable steps in this direction. Housing finance has emerged as growth sector these days
and is tipped to grow at a phenomenal 39% p.a.1 As per the estimates of National Housing
Bank, housing finance market was estimated to be about Rs. 45,000 crore during the year
2003-04 and reached at more than Rs. 80000 crore till the end of financial year 2006.2 Banks
and financial institutions have brought significant changes in their strategies and there is a
clear shift from sellers’ market to buyers’ market. Liberal tax incentives by the Government
coupled with low and competitive interest rates for housing finance has made this sector a
high growth sector. The Institutional growth of Housing development and Finance
Corporation (HDFC) and Housing and Urban Development Corporation (HUDCO) has
encouraged the private sector banks to enter into home loan segment. This has resulted into
the increase of competitive dynamism among the different players of housing finance. Banks
and housing finance companies are offering attractive loan schemes with varied lucrative add-
ons to the customers. Main features of these loan schemes are consumer flexibility,
adjustable rate plans, lower processing fees, low equated monthly instalment (EMI), lower
margin money, no pre-payment penalty, etc. Many of the players of housing finance have
been offering add-ons with their loan plans such as life insurance, credit card and consumer
loans. Some of the players also offer tailor made loan schemes to cater the specific needs of
the borrowers.

Department of Architecture TKMCE College of Engineering, Kollam KTU University

 IMPORTANT GUIDELINES ON HOUSING FINANCE

Banks deploy their funds under the housing finance allocation in any of the three categories,
i.e.

 Direct finance,
 Indirect finance,
 Investment in bonds of NHB/HUDCO, or combination thereof.

DIRECT HOUSING FINANCE

Direct Housing Finance refers to the finance provided by banks to individuals or groups of
individuals including co-operative societies for acquisition/construction of accommodation.

Direct Housing Finance includes:

 Bank finance extended to a person who already owns a house in town/village where
he resides, for buying/ constructing a second house in the same or other town/ village
for the purpose of self-occupation.
 Bank finance extended for purchase of a house by a borrower who proposes to let it
out on rental basis on account of his posting outside the headquarters or because he
has been provided accommodation by his employer.
 Bank finance extended to a person who proposes to buy an old house where he is
presently residing as a tenant.
 Bank finance granted only for purchase of a plot, provided a declaration is obtained
from the borrower that he intends to construct a house on the said plot, with the help
of bank finance or otherwise, within such period as may be laid down by the banks
themselves.

Supplementary finance

a) Banks may consider requests for additional finance within the overall ceiling for
carrying out alterations/ additions/repairs to the house/flat already financed by them.
b) In the case of individuals who might have raised funds for construction/ acquisition of
accommodation from other sources and need supplementary finance, banks may
extend such finance after obtaining pari passu or second mortgage charge over the
property mortgaged in favour of other lenders and/or against such other security, as
they may deem appropriate.

Department of Architecture TKMCE College of Engineering, Kollam KTU University

INDIRECT HOUSING FINANCE

Finance provided by way of term loans to housing finance institutions, housing boards, other
public housing agencies, etc., primarily for augmenting the supply of serviced land and
constructed units. Serviced plots can be sold by these agencies to co-operative societies,
professional developers and individuals with a stipulation that the houses should be
constructed thereon within a reasonable time, not exceeding three years.

Lending to Housing Intermediary Agencies

Lending to Housing Finance Institutions

Lending to Housing Boards and Other Agencies

Financing of Land Acquisition

Terms and Conditions for Lending to Housing Intermediary Agencies

 Term loans may be granted by banks to housing intermediary agencies against the
direct loans sanctioned/ proposed to be sanctioned by the latter, irrespective of the
per borrower size of the loan extended by these agencies.
 Banks can grant term loans to housing intermediary agencies (who are authorized to
provide finance to NRIs by RBI) against the direct loans sanctioned/proposed to be
sanctioned by them to Non-Resident Indians also.

CONSTRUCTION ACTIVITIES ELIGIBLE FOR BANK CREDIT AS HOUSING FINANCE

 Loans to individuals for purchase/construction of dwelling unit per family and loans
given for repairs to the damaged dwelling units of families;
 Finance provided for construction of residential houses to be constructed by public
housing agencies like HUDCO, Housing Boards, local bodies, individuals, co-operative
societies, employers. Priority being accorded for financing construction of houses
meant for economically weaker sections, low income group and middle income group;
 Finance for construction of educational, health, social, cultural or other
institutions/centres, which are part of a housing project and which are necessary for
the development of settlements or townships;
 Finance for shopping complexes, markets and such other centres catering to the day
to day needs of the residents of the housing colonies and forming part of a housing
project;
 Finance for construction meant for improving the conditions in slum areas for which
credit may be extended directly to the slum-dwellers on the guarantee of the
Government, or indirectly to them through the State Governments;
 Bank credit given for slum improvement schemes to be implemented by Slum
Clearance Boards and other public agencies;

Department of Architecture TKMCE College of Engineering, Kollam KTU University