AR 906 - Housing

Question Paper 2015 Housing

Part A

1) 5 Mark questions

Q.a) Define Housing Shortage? How is it calculated?

Housing shortage is present when there is insufficient housing to accommodate the

population in an area.
-when the supply of houses cannot meet the demand.
- When it is unaffordable for those who need it.
It is the mismatch between demand and supply

Supply < Demand

Housig shortage Indication
 Presence of homeless people
 Lack of regular shelter
 People sleep in public areas- Streets, under bridges, public parks.

Housing Situation
130 Crore Population – 10 Million Shortage
1out of 6 do not have a house in Urban Area
1 out of 10 in Rural Area do not have a house
Means
 Lack of Livable Houses
 Homeless
 Obsolete/ Dilapidated/ Unservicable houses
 Congestion - More than one family in a room

Q.b) urbanization trends in India?

The urban population is growing in India and because of this, opportunities are
increasing as well. According to country data, the urbanization in India is mainly due
to the expansion of cities and the migration of people. Investments are made in
housing, road network, urban transport, water supply, power-related infrastructures,
smart cities, and other forms of urban management. This is the bright future the
Indian economy has in store for itself.

Population and economic growth has fostered urbanization in the country and the
number of urban towns and cities have drastically increased. This growth is expected
to continue in the years to come and India has to step up its game in order to catch
up with this kind of change. Investments have to be made in order to better serve
the country.

There are several factors at play that have led to the urbanization in India –
population growth and migration as one of the 2 major factors. Recently, a third
factor has been seen as a huge contributor to the urbanization growth: the expansion
of towns and cities. This factor is due to the high economic growth that the city has
witnessed over the years. Because of this, the government in India has decided to
grab the opportunity: projects to further thrust the country into urbanization, a
number of smart cities to be put up in various locations, and other initiatives.

Q.c) Objectives of National housing and habitat policy

1. The key objective of the National Urban Housing and Habitat Policy is to
promote Sustainable Development of Habitat in this Country with main
Goal to Housing for all.
2. Urban areas in our country are also characterized by severe shortage of basic
services like potable water, well laid out drainage system, sewerage network,
sanitation facilities, electricity, roads and appropriate solid waste disposal.
3. To Ensuring equitable supply of land shelter and services at affordable prices to
all sections of society.
4. In fulfilling the housing demand policy focuses the spotlight on multiple stake-
holders namely,the private sector. the cooperative sector. the industrial sector
for labour housing and the. services/institutional sector for employee housing
Specific Objectives
Specific Objectives This Policy aims to develop a legal framework through a model
law on street vending which can be adopted by States/Union Territories with
suitable modifications to take into account their geographical/local conditions. The
specific objectives of this Policy are elaborated as follows:
a) Legal Status:
To give street vendors a legal status by formulating an appropriate law and thereby
providing for legitimate vending/hawking zones in city/town master or
development plans including zonal, local and layout plans and ensuring their
enforcement;
b) Civic Facilities:
To provide civic facilities for appropriate use of Identified spaces as
vending/hawking zones, vendors’ markets or vending areas in accordance with
city/town master plans including zonal, local and layout plans;
c) Transparent Regulation:
To eschew imposing numerical limits on access to public spaces by discretionary
licenses, and instead moving to nominal fee-based regulation of access, where
previous occupancy of space by the street vendors determines the allocation of space
or creating new informal sector markets where space access is on a temporary turn-
by-turn basis. All allotments of space, whether permanent or temporary should be
based on payment of a prescribed fee fixed by the local authority on the
recommendations of the Town Vending Committee to be constituted under this
Policy ;
d) Organization of Vendors:
To promote, where necessary, organizations of street vendors e.g. unions / co-
operatives /associations and other forms of organizations to facilitate their collective
empowerment;
e) Participative Processes:
To set up participatory processes that involve firstly, local authority, planning
authority and police; secondly, associations of street vendors; thirdly, resident
welfare associations and fourthly, other civil society organizations such as NGOs,
representatives of professional groups (such as lawyers,doctors, town planners,
architects etc.), representatives of trade and commerce, representatives of scheduled
banks and eminent citizens;
f) Self-Regulation:
To promote norms of civic discipline by institutionalizing mechanisms of self-
management and self-regulation in matters relating to hygiene, including waste
disposal etc. amongst street vendors both in the individually allotted areas as well as
vending zones/clusters with collective responsibility for the entire vending
zone/cluster; and
g) Promotional Measures:
To promote access of street vendors to such services as credit, skill development,
housing, social security and capacity building. For such promotion, the services of
Self Help Groups (SHGs)/Co-operatives/ Federations/Micro Finance Institutions
(MFIs), Training Institutes etc. should be encouraged.

Q.d) What is a slum? How is it formed?

 A slum is usually a highly populated urban residential area consisting

mostly of closely packed, decrepit housing units in a situation of
deteriorated or incomplete infrastructure, inhabited primarily by
impoverished persons.
  Although slums, especially in America, are usually located in urban areas,
in other countries they can be located in suburban areas where housing
quality is low and living conditions are poor.
 While slums differ in size and other characteristics, most lack
reliable sanitation services, supply of clean water, reliable electricity, law
enforcement, and other basic services. Slum residences
 vary from shanty houses to professionally built dwellings which, because
of poor-quality construction and/or lack of basic maintenance, have
deteriorated
 Slums form and grow in different parts of the world for many different
reasons. Causes include rapid rural-to-urban migration, economic
stagnation and depression, high unemployment,
 poverty, informal economy, forced or manipulated ghettoization, poor
planning, politics, natural disasters, and social conflicts.
 Strategies tried to reduce and transform slums in different countries, with
varying degrees of success, include a combination of slum removal, slum
relocation, slum upgrading, urban planning with citywide infrastructure
development, and public housing.

Q.e) Difference between slum clearance and slum improvement?

Slum clearance in India is used as an urban renewal approach to redevelop and

transform poor and low income settlements into new developments or housing.
Millions of people live in slum dwellings across India and many migrate to live in
the slums from rural villages, often in search of work opportunities. Houses are
typically built by the slum dwellers themselves and violence has been known to occur
when developers attempt to clear the land of slum dwellings.

Reasons for wanting to clear slums vary, although land value when sold to
developers is higher due to the communities that had settled and built their own
homes. In some cases, such as in Ahmedabad, Gujarat, slum areas are located in
desirable locations, such as on an embankment which provide opportunities for
development of higher class housing and commercial units. Occasionally, slums can
encroach on areas deemed a safety concern, such as near to railway tracks or on land
desired for expansion, such as with Mumbai international airport.

The 2011 census estimated that 65 million people lived in around 108,000 slums
across India. Slum upgrading or slum improvement is an urban renewal strategy
which consists of a demolition of slums, undertaken cooperatively by large
corporations to make way for hotels and various other buildings.[1] The main
objective of slum upgrading is to remove the poor living standards of slum dwellers
and largely focuses on removing slum dwellers altogether.
Slum upgrading is used mainly for projects inspired by or engaged by
Commonwealth Bank and similar agencies. It is considered by the proponents a
necessary and important component of urban development in the developing
countries.

Many slums lack basic local authority services such as provision of safe drinking
water, wastewater, sanitation, and solid-waste management.

Many people do not believe that slum upgrading is successful as community planners
believe that there is no successful alternative of where these displaced slum dwellers
should go. They point to the difficulties in providing the necessary resources either
in a way that is beneficial to the dwellers or in a way that has long-term effectiveness

Q.f) Define the concept of aided self help

The Government’s Aided Self-Help Housing Programme is a new concept aimed at
empowering persons to manage the construction of their own homes with financial
and technical support from the state. This programme will complement the existing
Accelerated Housing Programme (Government-subsidised housing) and
targets resident citizens without land as well as those with land.
Through this strategy:
 Eligible citizens, without land, will benefit from access to fully developed
lots costing 30% of its market value, subsidised mortgages at 2% and 5%
interest rates from the Trinidad and Tobago Mortgage Finance Company
(TTMF), building contractors, pre-approved house plans, technical assistance
and oversight for the construction of their homes.
 Eligible citizens, with land approved for residential use, will also be able to
access subsidised mortgages at 2% and 5% interest rates from the Trinidad
and Tobago Mortgage Finance Company (TTMF), building contractors, pre-
approved house plans, technical assistance and oversight for the construction
of their homes.
 Beneficiaries will be encouraged to manage the construction process, using
their own finances, to ensure their homes are completed within a two (2) year
period.

Q.g) Role of NHB in housing finance in India?

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 the 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 therewith. The Finance Act, 2019 has
amended the National Housing Bank Act, 1987. The amendment confers the
powers of regulation of Housing Finance Companies (HFCs) to the Reserve Bank
Of India. NHB registers and supervises Housing Finance Companies (HFCs),
keeps surveillance through On-site & Off-site Mechanisms and co-ordinates with
other Regulators.
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.

Part C
3) 20 Mark Question

Q.c) What is housing finance? What are the sources of housing finance in
India? Explain the role of major housing finance agencies in National and
State level in India.

Housing finance refers to finance that is provided to individuals or group of

individuals including co-operative societies for purchase/build house or houses.
This is required to meet the various need related to housing like :
 Purchase of land
 Acquisition of a flat
 Construction of a house
 Extension of a house
 Housing loans from other banks/HFCs.

The different types of housing finance are:

 Direct finance
 Supplementary finance
 Indirect finance

DIRECT FINANCE
1. It refers to the finance provided to individuals or groups of individuals including
co-operative societies.
2. Under this category, the following types of bank finance are included:
a) Bank finance extended to a person who already owns a house in town/ village
where he resides, or for buying / constructing a second house in the same or
Other town / village for the purpose of self - occupation.
b) Bank finance extended for the 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.
c) Bank finance extended to a person who proposes to buy an old house where he
is presently residing as a tenant.
d) Bank finance granted only be 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
1. 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.
2. 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 mortgaging charge over the
property mortgaged in favor of other lenders and / or against such other
security, as they may deem appropriate.

INDIRECT HOUSING FINANCE

1) The Banks ensures that their indirect housing finance is channeled by way of
term loans to housing finance institutions, housing boards, other public housing
 agencies, etc primarily for augmenting the supply of serviced land for the
constructed units.
2) It should also be ensured that the supply of plots / houses is time bound and
public agencies do not utilize the bank loan merely for acquisition of land.

In India, the following types of institutions provide long term finance for housing:
Commercial banks Cooperative banks Regional rural banks. Agriculture and rural
development banks Housing finance companies and Cooperative housing finance
societies.

SOURCE OF HOUSING FINANCE

Central Government: Housing has been classified as a basic need in India and
successive governments have highlighted its priority status. Despite such emphasis,
housing policies largely remained statements of intent rather than being translated
into implementation. Earlier Indian Governments tended to view housing from a
social perspective rather than an economic one, and the policies of the time reflected
this. Today, the scenario has changed. Players like commercial banks and housing
finance companies have made efforts to develop the mortgage market and increase
the availability and affordability of housing.
The early development of housing finance in India is a result of the housing policies
implemented by the government. A clear perspective on the evolution of housing
policies in India can be seen in the Five Year Plans, which were based on a centrally
planned mode of development. Development activities in India have been structured
on the basis of Five Year Plans since 1951.

NATIONAL HOUSING BANK

• The parliament passed the National Housing Bank (Amendment) Act, 2000' which
has come Into force from 16 June 2000. The need for a summary procedure was
long felt for housing finance institutions for giving impetus for creation of Secondary
Mortgage Market
• The National Housing Bank (NHS) was established on 9th July 1988 under an Act
of the Parliament viz. the National Housing Bank Act, 1987 to function as a principal
agency to promote Housing Finance Institutions and to provide financial and other
support to such institutions
• Wholly owned by the Reserve Bank of India
OBJECTIVES: To promote a sound, healthy, viable and efficient housing finance
ystem to cater to all segments of the population through financing
• To support housing finance capacity building measures institutions and to catalyze
flow of funds to all regions and incomes groups. To develop market infrastructure
for sound growth of housing finance system.
• To ensure expansion and stability in the housing finance market role OF NHB
• Augmenting Resources for the housing sector
• Leveraging the liquidity Support specialized institutions to serve as dedicated
centers for housing credit
• Fill the credit gaps suffered by low income households by strengthening linkages
between formal and informal sector.
 Question Paper 2016 Housing
Part A
1) 5 Mark questions

Q.b) Population explosion and housing shortage in India?

Population explosion refers to the number of people that live in an area. It is a major
issue for developing countries. Also, the government is not taking proper measures
to control this problem. Besides, it generates many issues in the country that cause
many problems for people. It refers to the rapid increase in the population of an
area among human beings.
Furthermore, it is a situation where the economy is not capable of coping with the
increasing demand of its population. Due to lack of control on delivery and
unawareness of people the birth rate is increasing rapidly. In addition, the gap
between death and birth has gone way wider than what we can think of.
Furthermore, the birth rate has increased many folds in comparison to the death rate
.Besides, these better living conditions, good quality food, better nutrition, and better
sanitation facilities also helped in increasing life expectancy. Due to the increase in
the population the demand for jobs and employment also increases. But, due to a
lack of resources and employment opportunities, there are millions of jobless people
in India. In addition, the condition of unemployment is growing day by day. To face
this problem most the people are either migrating to other countries for better job
opportunities. Due to the large population there a large number of people who
belong to below the poverty line and they do not have adequate knowledge of the
overpopulation of the country. Also, they are the major contributor to a high birth
rate.
The current housing shortage in urban areas is around 10 million units and most of
the housing shortage lies in the Economically Weaker Section (EWS) and Lower
Income Group Segment (LIG). Housing shortage in India. India has been one of
the fastest growing economies across the globe, and this unprecedented
development has come with its own set of challenges. Fast-paced industrialization
in the last one decade has led to unrelenting rural-urban migration, and metro cities
swarming with population, thus pressurizing the available housing stock.
Skyrocketing property and land prices coerced majority of the migrants to occupy
slums and squatter settlements. A mismatch in demand and supply of both quantity
and quality of housing soon derailed the real estate industry off its growth trajectory.
The sector landed into a paradoxical state where houses remained vacant, yet
majority citizens inhabited land typified by poor quality housing stock and
congestion.
Comprehending affordable housing as the need of the hour, the government has
acted as a facilitator to make the segment an alluring venture for private developers
and introduced several incentives and schemes over the years. One such ambitious
project taken over by the government in June 2015 is Pradhan Mantri Awas Yojana
(PMAY) or Housing for All. Through this, the government envisages delivering
every household a habitable shelter with water facility, sanitation and electricity
supply by 2022

Q.c) Urbanization and poverty in Indian context?

Sol- Urbanization in India is mainly due to liberalization of its economy after the
1990s, which gave rise to the development of the private sector. Presently, although
urbanization is taking place at a fast rate in India, only one-third of its population
lives in urban areas.
According to the 2011 census, there are 53 cities in India with a population of a
million or more, by 2031 that number will rise to 87.
The urbanization can only be harnessed and sustained by inclusive planning that
provides affordable transportation, continuous water supply, modern sewage
treatment and a good solid waste management system. The government of India has
been channelling funds to renew its urban spaces through various schemes.
There are different measures based on rural and urban areas. Majority of these
measures are aimed at curbing poverty in the rural areas as rural India has high
prevalence rate. There are largely five kinds of measures to fight poverty in India.

First, wage employment programmes that provide wages against manual labour
work. Some of the prominent programmes include, Sampoorna Grameen Rozgar
Yojana that provides wage employment in infrastructure building projects like
construction of roads and buildings, and Mahatma Gandhi National Rural
Employment Guarantee Act that guarantees 150 days of paid work to people in the
rural areas.

Second, self-employment programs that include Integrated Rural Development

Program enabling families to cross the poverty line in a given timeframe. This can
be done by taking up activities like agriculture, horticulture, animal husbandry and
Training Rural Youths for Self-Employment that provides skills and technical
training to rural youths living below the poverty line.

Third, would include food security programmes like the enactment of the National
Food Security Act, 2013. The act converts existing security programs in to legal
entitlement. It includes the Midday Meal Scheme, Integrated Child Development
Services scheme and the Public Distribution System.
Fourth, social security schemes such as Pradhan Mantri Suraksha Bima Yojana for
accident insurance and Pradhan Mantri Jeevan Jyoti Yojana for life insurance.

Fifth, Skill development programs such as Deen Dayal Upadhyaya Grameen

Kaushalya Yojna to enable a large number of youth from below poverty line to take
up industry-relevant skills training.

Q.d) Rural housing standards in India:

Recommended standards for rural housing are as follows:

 Minimum 2 living rooms

 Ample verandah (sit out) space
 Built up area of house should not exceed one third of total land area
 Separate kitchen with paved sink or platform for washing utensils
 Tube well or dug well within quarter mile from house
 Cattle shed should be at a minimum distance of 25 feet from the house
 Window area should at least 10% of floor area
 Sanitary latrine should be present
 Provision for proper waste disposal

Q.e) Slums in India?

 A slum is usually a highly populated urban residential area consisting mostly
of closely packed, decrepit housing units in a situation of deteriorated or
incomplete infrastructure, inhabited primarily by impoverished persons.
 Slums form and grow in different parts of the world for many different
reasons. Causes include rapid rural-to-urban migration, economic stagnation
and depression, high unemployment, poverty, informal economy, forced or
manipulated ghettoization, poor planning, politics, natural disasters, and
social conflicts.
 There are many slums in India especially in Delhi, Mumbai, Chennai, Jaipur,
etc.
 Eg: Dharavi is a locality in Mumbai, Maharashtra, India, considered to be one
of Asia's largest slums.
 The Dharavi slum was founded in 1884 during the British colonial era, and
grew because of the expulsion of factories and residents from the peninsular
city centre by the colonial government and from the migration of poor rural
Indians into urban Mumbai. For this reason, Dharavi is currently a highly
diverse settlement religiously and ethnically.
 Dharavi has an active informal economy in which numerous household
enterprises employ many of the slum residents-leather, textiles and pottery
products are among the goods made inside Dharavi.
  Dharavi has suffered from many epidemics and other disasters, including a
widespread plague in 1896 which killed over half of the population of
Mumbai. Sanitation in the slums remains poor.
 Dharavi slum face a lot of problems like noise, pollution, water shortage,
proper sanitation hygiene, sewage and drainage systems, etc.

Q.g) HDFC and HUDCO?

The Housing Development Finance Corporation (HDFC) was formally
promoted and incorporated on October 17, 1977 was promoted by ICICI, the
International Finance Corporation.
HDFC from its very first day of operations has built a principle centered
organization. An organization built on the basis of fairness, kindness, efficiency and
effectiveness. It had gradually built trust among the people by strengthening
communications and participative management style.
Its own name was constituted from three words – the interlocking of three areas
housing, finance and development.
OBJECTIVES OF HDFC:
 The Primary objective of HDFC is to enhance residential housing stock and
to promote house ownership by providing individual household/families with
long term housing loans at commercially viable rate.
 More specifically, the objectives of HDFC are:
 To finance mainly low and middle income group of people to
purchase/construct a single family dwelling unit primarily for self occupation.
 Granting loans to the co-operative sector for housing their employees.
 The major objective of HDFC is to increase the flow of resources for housing
through the integration of Housing Finance Institutions with domestic capital
market.
 It was co-promoted and lent support to number of recognized Housing
Finance Institutions operating in the Country.
HUDCO- (Housing & Urban Development Corporation)
Incorporated on 25th April 1970
Housing & Urban Development Corporation Ltd. (HUDCO) is a public sector
company fully owned by Govt. of India for financing of housing and urban
infrastructure activities in India
The principal mandate of HUDCO was to ameliorate the housing conditions of all
groups and with a thrust to meet the needs of the low- income group (LIG) and
economically weaker sections (EWS)
Formed to assist agencies and authorities in upgrading the housing conditions in
the country, aims to provide financing for housing developments
HUDCO Niwas Yojana for the lower income group (LIG), HUDCO Niwas -
HUDCO home loans by HUDCO Bank
The activity areas of HUDCO include:
 Urban housing
 Rural housing
 Repairs and renewal
 Working women ownership housing
 Land acquisition
 Staff Rental Housing
 Cooperative Housing
 Slum upgradation & Environmental Improvement Schemes
 Night Shelter for Urban Shelterless.
OBJECTIVES OF HUDCO
 To provide long-term finance for construction of houses for residential
purposes
 To finance or undertake, wholly or partly, the setting up of the new or
satellite towns.
 To subscribe to the debentures and bonds issued
 To finance or undertake the setting up of industrial enterprise for building
material.
 To administer the monies received, from time to time, from the
Government of India
 To promote, establish, assist, collaborate and provide consultancy services
for the projects

Q.h) Characteristics of housing finance.

 Home Loans are the consumer loans provided by various banks. These are
large amount loans which provide financial support to the people who want
to purchase their dream home. Home loans are secured loans.
  The borrowers get to own their dream home and pay for it in easy
affordable instalments. Banks and Institutions offers home at cost-effective
rates.
 Tax concessions nuke home loans more attractive than other loan products.
The borrowers can get tax deduction on repayment of the principal amount
of a loan taken to buy or construct a house.
 The interest paid on a loan is deductible from 'income from property', even
if it has not been paid during the year. Interest paid on a new loan taken to
repay the original housing loan is also allowed as deduction.
 The characteristic of home loan impacts different aspects of housing finance
like funding, liquidity management and loan management over a longer
period.
 The Land and property related legislation tends to change over time
reflecting the change in the political will and other developments in society
including the changing expectations of people.
 The third characteristic that impacts home loan is change in the lending
institutions' organizational structure, lending policies, personnel etc.

Part B
2) 10 Mark Questions
Q.a) Discuss the nature & magnitude of housing problems in India?
Magnitude of the housing problem:
The magnitude of the problem of housing in India is quite wide. The problem has
both quantitative and qualitative dimensions. According to 1991 census, the housing
shortage was 18.5 million dwelling units, out of which 13.7 million for rural areas
and 4.8 million for urban areas 41.6. % was living in pucca houses, 30.9% was living
in semi-pucca houses and 27.5% was living in kutcha houses. Urbanization refers to
the population shift from rural to urban areas, the decrease in the proportion of
people living in rural areas. It is the process by which towns and cities are formed
and become larger as more people begin living and working in central areas.
● The United Nations has projected that half of the world’s population will live in
urban areas by the end of 2020. It is predicted that by 2050 about 64% of the
developing world and 86% of the developed world will be urbanized.
● Urbanization creates enormous social, economic and environmental changes,
which provide an opportunity for sustainability with the potential to use resources
more efficiently, to create more sustainable land use and to protect the biodiversity
of natural ecosystems.
Urbanization in India
Urbanization in India is mainly due to liberalization of its economy after the 1990s,
which gave rise to the development of the private sector. Presently, although
urbanization is taking place at a fast rate in India, only one-third of its population
lives in urban areas.
 According to the 2011 census, there are 53 cities in India with a population
of a million or more, by 2031 that number will rise to 87.

 The urbanization can only be harnessed and sustained by inclusive planning

that provides affordable transportation, continuous water supply, modern
sewage treatment and a good solid waste management system. The
government of India has been channeling funds to renew its urban spaces
through various schemes.
 Presently Urban India is home to 377 million people and is expected to
house 600 million people by 2031, an increase of 59%.
 Indian cities are deficient in basic amenities such as clean drinking water,
sanitation and lighting facilities etc.
Problems of Urbanization is due to the faulty urban planning, Urbanization with
the poor economic base and without having functional categories. The basic
problems are,
1. Unemployment
2. Housing
3. Slums and squatter settlements
4. Transport
5. Water supply & Sanitation
6. Water Pollution & air pollution
7. Inadequate provision for social infrastructure (School, hospital, etc…)

Impacts of Urbanization on Housing

Housing is another intense problem due to urbanization in India. Overcrowding
leads to a constant problem of scarcity of houses in urban areas. This problem is
particularly more severe in those urban areas where there is large invasion of jobless
or underemployed immigrants who could not find place to live when they come in
cities and towns from the nearby areas. The major factors for housing problems are
lack of building materials and financial resources, insufficient expansion of public
utilities into sub-urban areas, poverty and unemployment of urban immigrants,
strong caste and family ties and lack of enough transportation to sub-urban areas
where most of the available land for new construction is to be found.

Peoples are living in Insecure, Rented House:

As Urbanization increases, so does the number of renters. Renters are most worried
about eviction by the property owner amid rising land price, but lack of money,
family disagreements and government seizures also plays a part. The renters are twice
as insecure about losing their property as owners.

Rising Cost:
Due to the lack of available land in combination with the strong demand, land values
have increased rapidly which is an obstacle to affordable housing. On top of
expensive land costs in cities, construction costs are largely determined by market
forces including a shrinking labor force, rising material and resource costs and the
market expectation of low-density housing. These all influence house prices and
what people can afford to rent and buy.

The Number of Urban Poor is on the Rise:

Limited access to land in cities, and high of food, water, electricity transport,
housing, education and healthcare all contribute to urban poverty. Approximately
880 million people lived in city slums in 2014- a number that could rise to 3 billion
by 2050. To address urban poverty, it is important to understand its scale. But
current data collections are insufficient, they better apply to the rural context and
may fail to capture urban poverty.

Affordable housing
The Sustainable Development Goals states that, by 2030, everyone should have
access to affordable housing and basic services. To achieve this, the current trends
on slum population growth need to be reversed. The government must priorities
affordable house for low-income households. And to facilitate this, governments
should scale up public housing programs and leverage limited public funds to attract
private housing finance.

Limited Land Supply

In many cities, land supply for new developments is very limited. As many of the
peoples are migrated into cities the consumption in resources also increase in such
a time to reduce this urban sprawl the supply of land is limited. It can be by increasing
the price of the land, putting regulation on the site etc. As a result, they usually take
a long time from initiation to completion.

Unemployment:
As the migration of peoples from rural areas to urban areas is increasing, but for this
much of people its hard to find a job. Which leads to unemployment. Thus this
directly hit housing, they won’t have any money to rend a property, build a house,
buy house or land.

Connectivity:
For the peoples living in the city connectivity is a main aspect as it helps in reduction
of travel cost and money. The true challenge of the affordable housing customer
requires efficient connectivity to areas of work in city business districts. The
development of effective mass rapid transit systems is the solution to facilitate easy
commute and travel time.

Cost of Ownership:
Lack of affordable land, various forms of taxes like VAT, service tax, stamp duty
etc. constitute anywhere between 30% to 35% of the home cost, which increases the
cost of home ownership. This is in addition to the inefficiencies that is brought to a
project by local development rules which are more attuned to premium housing.

Congestion:
Many households in urban areas have to cope with increasingly crowded conditions,
although this is certainly not true for everyone. The housing conditions increase
when people build high buildings, sometimes more than 5 storey, to increase the
number of houses. Many urban centers have high population densities. The house
owners therefore rent out numerous rooms for migrants. Poor migrants live under
the most crowded conditions. They do not have access to ancestral residential land.

Poor Air Quality in Cities and Health Issues:

The overcrowding in a city can cause air pollution. As the use of vehicles increases,
the increased production in factories all lead to air pollution. Not only this, had the
pollution produced from households, power generations, burning of wastes will
also cause air pollution. These can lead to heart attacks, lung cancer and asthmas. It
also paves the way for the emission of greenhouse gas and lead to global warming.

Part C
3) 20 Mark Questions
Q.b) what is slum? What are the characteristics and reasons for the growth
of slums? What is the impact on urban houing scenario in India?
SLUMS
 As per UN Habitat a slum is characterized by lack of durable housing, insufficient
living area, lack of access to clean water, inadequate sanitation and insecure tenure.
 In India slums have been defined as mainly those residential areas where dwellings
are in any respect unfit for human habitation by reasons of dilapidation,
overcrowding, faulty arrangements and designs of such buildings, narrowness or
faulty arrangement of streets, lack of ventilation, light, sanitation facilities etc.
 These inadequacies make the living conditions in slums extremely suboptimal
unhygienic and results in unusually higher incidence of air and water borne diseases
for the dwellers. Causes of slums in urban areas
 1. Rural–urban migration
 Many people move to urban areas primarily because cities promise more jobs,
better schools for poor's children, and diverse income opportunities than
subsistence farming in rural areas.
 Many cities, on the other hand, do not provide enough low-cost housing for a large
number of rural-urban migrant workers.
2. Urbanization
 urbanization creates slums because local governments are unable to manage
urbanization, and migrant workers without an affordable place to live in, dwell in
slums.
 evidenced by poor urban infrastructure and insufficient housing, the local
governments sometimes are unable to manage this transition.
 Urbanization might also force some people to live in slums when it influences land
use by transforming agricultural land into urban areas and increases land value.
3. Poor house planning
 Lack of affordable low-cost housing and poor planning encourages the supply side
of slums.
 Insufficient financial resources and lack of coordination in government
bureaucracy are two main causes of poor house planning.
 However, with little economic incentive, the housing market is more likely to
develop middle-income housing rather than low-cost housing. The urban poor
gradually become marginalized in the housing market where few houses are built to
sell to them.
4. Poor infrastructure, social exclusion and economic stagnation
 Social exclusion and poor infrastructure forces the poor to adapt to conditions
beyond his or her control. Poor families that cannot afford transportation, or those
who simply lack any form of affordable public transportation, generally end up in
squat settlements within walking distance or close enough to the place of their formal
or informal employment.
 Economic stagnation, in contrast, creates uncertainties and risks for the poor,
encouraging people to stay in the slums. Economic stagnation in a nation with a
growing population reduces per capita disposal income in urban and rural areas,
increasing urban and rural poverty.
 5. Informal economy
 Many slums grow because of growing informal economy which creates demand
for workers.
 Informal economy is that part of an economy that is neither registered as a business
nor licensed, one that does not pay taxes and is not monitored by local or state or
federal government.
6. Poverty
 Urban poverty encourages the formation and demand for slums. With rapid shift
from rural to urban life, poverty migrates to urban areas.
 The urban poor arrives with hope, and very little of anything else. He or she
typically has no access to shelter, basic urban services and social amenities. Slums
are often the only option for the urban poor. Eradicating slums
 The government should consider providing a legitimate solution to the poor. Most
of the times, it is seen that the rehabilitation takes place at a location which is far
away from the core areas and employability is zero.
 Instead of forced evictions, authorities should plan an in-situ upgrading approach.
 Not everyone wants to live in homes which are insufficient for family needs and
just have a concrete roof over their head.
 To rehabilitate the downtrodden, the government should offer them areas where
they can stay within the community and not in isolated projects and societies.
 Offering safe and secure land title should also be on the consideration list of the
government to ensure that the settlement isn't disturbed in the future.
 If the existing homes are being upgraded, municipal authorities should upgrade
the provisions from time to time.
 Easy financing and loaning options at affordable interest rates for upgrading,
building and extension of the existing shelter should be made available.
 New methods of creating land supply should be tried. Freeing up the unused land
lying with government institutions can be used to create affordable homes.

National Urban Housing & Habitat Policy (NUHHP), 2007

• It has been formulated for changing socio-economic parameters of the urban areas
and growing requirement of shelter and related infrastructure.
• Policy seeks to promote public-private partnerships for realizing the goal of
“Affordable Housing for All” with special emphasis on the urban poor.
• Focuses on multiple stake-holders viz the Private Sector, the Cooperative Sector,
the Industrial Sector for labor housing and the Services/ Institutional Sector for
employee housing.
• It includes passing of specific acts for realizing the policy objectives through - fiscal
concessions, financial sector reforms and introduction of innovative instruments,
for mobilizing recourses for housing and related infrastructure development.

Housing is a key part of well-being and contributes to spatial and social mobility. In
India, the housing market is characterised by excess demand for affordable
dwellings, a small rental market and an oversupply of high-end housing, especially
in urban areas. The housing shortage among low-income groups is large, despite
increases in the stock of quality housing in recent years, as house prices are high
relative to incomes and access to credit is often difficult. Prices are high because of
structural rigidities in the market, stemming from stringent zoning and land
regulations, restrictive floor indices and high transaction costs, in the context of high
population density. Ongoing urbanisation, and particularly rural-urban migration,
will intensify demand for affordable housing, especially at the low end of the market.
Improving the functioning of the market calls for clarifying property rights and
easing rent control and zoning rules. Lowering transaction taxes, especially stamp
duties, would support mobility. Simplifying land use regulations and enhancing
contract enforcement would also boost housing supply. The Real Estate (Regulation
and Development) Act of 2016, which aims at bringing transparency, protecting the
interests of homebuyers and boosting investment in the real estate sector, helped
improve the market situation. By improving the collateral security, the law can also
facilitate access to housing finance. The Housing for All programme that aims to
provide a home for every Indian by 2022 is a good way forward in reducing the
shortage. As with many past government programs, it promotes ownership. More is
needed to develop rental housing and to address the needs of vulnerable groups.
The 2019 Model Tenancy Act is a step in the right direction.
 Question Paper 2017 Housing
Part A
Q.1) Discuss about urbanisation trends and its input on housing in India?

Population and economic growth has fostered urbanization in the country and the
number of urban towns and cities have drastically increased. There are several
factors at play that have led to the urbanization in India – population growth and
migration as one of the 2 major factors. Recently, a third factor has been seen as a
huge contributor to the urbanization growth: the expansion of towns and cities. This
factor is due to the high economic growth that the city has witnessed over the years.
Because of this, the government in India has decided to grab the opportunity:
projects to further thrust the country into urbanization, a number of smart cities to
be put up in various locations, and other initiatives.

Rapid rise in urban population, in India, is leading to many problems like increasing
slums, decrease in standard of living in urban areas, also causing environmental
damage. Water lines, roads and electricity are lacking in quality, resulting in a decline
in living standards. It is also contributing to the issues presented by pollution.
Urbanization also results in a disparity in the market, owing to the large demands of
the growing population and the primary sector struggling to cope.
It could be argued that urbanization impacts the migrants themselves on multiple
levels. Networks of friends and family become support systems during the initial
transformation phase and the struggle to find work in a fast-paced environment.
Their struggles may take months, or even years, to adjust to the new surrounds in
order to find a stable job. Migrants are responsible for supporting both themselves
in the city and the family left at home.Some of the positive effects resulting from
rural to urban migration occur in the agrarian communities from which migrants
came.
Q.5) National Urban Housing and Habitat Policy?
• Goal of the Policy is Affordable Housing for All with special emphasis on
the urban poor.
• Strategy framework is multiple partnership of States with various
stakeholders, cooperatives, employee welfare housing organisations, private sector,
state parastals
• Special emphasis has been laid on SC/ST/BC/Minorities, empowerment of
women within the ambit of the urban poor with emphasis on security of tenure.
Major Government Initiatives andProgrammes for Affordable HousingInitiatives
by Ministry of Housing & Urban Poverty Alleviation.
• Formulation of National Urban Housing & Habitat Policy 2007.
• Jawaharlal Nehru National Urban Renewal Mission.
• Interest Subsidy Scheme for Housing the Urban Poor.
• Affordable Housing in Partnership : Modification in JNNURM
• Setting up of a High Power Task Force on Affordable Housing.
• Launch of the Rajiv Awas Yojana

Q.8) What is meant by self-help Housing?

These are normally groups of people who can’t afford to buy their own housing and
whose housing needs are such that they will not be offered a permanent tenancy by
the local authority or a housing association (eg all sorts of single people, couples,
young people, refugees etc).The properties are often “borrowed” on the basis of a
licence or sometimes a lease, for a specified period of time. On occasion, future
plans change and the buildings may even become available on a permanent basis.

• Making Use of Wasted Buildings:

Self-Help Housing utilises empty or redundant buildings which owners are willing
to make available for a limited period on licence or lease, often at minimal cost. .

• A Source Of Housing or Community Facilities:

Self-Help Housing is a source of economical and affordable housing, or community
facilities, for people who might otherwise be homeless or have to share
accommodation.

• Improving Neighbourhoods:
By reducing the number of empty and void buildings in a neighbourhood Self-Help
Housing contributes to raising the overall quality of a neighbourhood

• Engaging And Empowering People:

Self-Help Housing enables people, to take responsibility for securing their own
housing or developing their own community facilities. It turns people into active
citizens.

• Supporting Social Enterprise:

In addition to providing affordable housing and community facilities, self-help
projects can sometimes generate cheap work space for start-up businesses and social
enterprises
• Learning New Skills:
Self Help Housing provides people with an opportunity to learn practical “on the
job” building skills and also how to run an organisation, how to secure funding and
how to negotiate with owners, local government officials and other agencies.

Part B
Q.9) Explain how settlement pattern of Kerala responds to local climate and
context
The variation in the topography features determine the three longitudinal stretches
of land from the coast of the ghats. The settlement pattern of kerala is of a scattered
nature compromising of isolated homesteads and is quite unique from the situations
and patterns in other parts of India. Here the unit of settlement is a homestead. The
whole landscape is spotted with homesteads, the towns merging into the rural areas
and the rural areas moving into the towns. The settlements are access oriented rather
than area oriented. An area wise classification of the settlements depicts the
settements in character as either rural or urban . The urban influence have penetrated
into the rural areas through the rural urban knots. Kerala has a warm humid climate.
The rainfall is very heavy from south west and north east monsoons . To keep the
rain and sun away form the walls the roofs of the building come down very
low. They have verandah all round the building protecting the external walls from
sun and rain. The width of the verandah varies from 2 ft to 12ft In rooms were
people spend most of their time during day the window openings were brought in
at ground level otherwise the windows were small so that there was only subdued
light inside or had timber jalis to give diffused light without glare. They also have
an internal courtyard for better flow of air. The ridged roof pitched at angles
between 30degree to 40degree The roof with intricately carved gables protruding
from the roof with overhangs supported by wooden brackets. The roof is
prefabricated that is different members are fixed on the ground and assembled at
the top. No nails are used. The roof is kept in position by interlocking with the
hole in the rafters. Walls made of timber or earth and roof of coconut leaves or tiles
are common in many parts of Kerala Structurally the roof frame was supported on
the pillars on walls erected on a plinth raised from the ground for protection against
dampness and insects in the tropical climate.

Q.11) Discuss about the role of major housing finance agencies at national
level & state level?
It refers to finance that is provided to individuals or group of individuals including
cooperative societies for purchase/build house or houses. Housing Finance refers
to the finance for meeting the various needs related to housing:
 Purchase of Land
 Acquisition of a Flat
 Construction of a house
  Extension of a house
 Housing loans from other banks/HFCs.

Purpose:
It provides for:
 Purchase of flat I house or purchase of plot of Land.
 For renovation / repairs of an existing house& flat.
 For extending an existing house.
 Short term bridge finance while purchasing another house& Flat.

Direct housing finance

It refers to the finance provided to individuals or groups of individuals including co-
operative societies.
Under this category, the following types of bank finance are included:
 Bank finance extended to a person who already owns a house in town /
Village where he resides, or for buying / constructing a second house in the
same or other town / village for the purpose of self - occupation.
 Bank finance extended for the 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
 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.
 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 mortgaging charge over the
property mortgaged in favor of other lenders and / or against such other
security, as they may deem appropriate.

Indirect housing finance

  The Banks ensures that their indirect housing finance is channeled by way of
term Loans to housing finance institutions, housing boards, other public
housing agencies, etc primarily for augmenting the supply of serviced Land
for the constructed units.
 It should also be ensured that the supply of plots I houses is time bound and
public agencies do not utilize the bank Loan merely for acquisition of Land.

National housing bank

 The National Housing Bank (NHB) was set up on July 9, 1988 under the
National Housing Bank Act, 1987 as the Apex Level institution for housing
finance.
 To promote the housing financial institutions both at Local and regional
Levels.
 The NHB is wholly owned by the RBI which has contributed the entire paid-
up capital.
 Ensures a sound and healthy housing finance system through effective
regulation and supervision of housing finance institutions.

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

Functions
 Promotion and Development Function
 Regulatory Function
 Financing Function

Promotion & development function

  NHB has designed and conducted the various training programs considering
the need for trained persons.
 The NHB also contributes to improve or strengthen credit delivery network
for housing finance in the country.
 As a part of this role, NHB has framed a scheme for guaranteeing the bonds
to be issued by the housing finance company.
 NHB operates as a multifunctional Development Finance Institution (DFI)
for the housing sector.
 NHB has been financing the following housing schemes at all. India Level
 Indira Awas Yojna
 Golden Jubilee Rural Housing Finance Scheme
 Bharat Nirman
 Productive Housing in Rural Areas(PH IRA)
 1% Interest subvention scheme

Regulatory function
 According to NHB Act, 1988, NHB is expected to regulate the housing
finance system of the country to its advantage.
 To prevent any housing finance institutions being conducted in such a
manner which may be against the interest of depositors or of the housing
finance institutions.
 For this purpose, NHB has been given power to determine the policy.
 To give directions to the housing finance institutions and their auditors.

Finance function
 To provide financial assistance to various banks and housing finance
institutions.
 The financing of housing sector by the NHB is done by extending refinance
to different primary lenders in respect of:
 Eligible housing loans extended by them to individual beneficiaries.
 For project Loans extended by them to various implementing agencies.
Acting as special purpose vehicle for securitizing the housing Loan receivables