Affordable housing conundrum in India

Recent housing policy discourse in India, which aims to achieve housing for all, has ignored the way households meet their housing needs and adjust deviation between desired and actual housing consumption. As in the past housing programs, there is reliance on an aggregate notion of housing shortage in recent central government program for housing for all, Pradhan Mantri Awas Yojana (PMAY), which gives credence to new housing construction. This chapter highlights the importance of distinguishing new housing construction from the requirements to upgrade or extend an existing house to adjust deviation between desired and actual housing consumption. These other methods of adjusting housing consumption is the practice that households adopt on ground. The other emphasis that this chapter places is on the understanding of housing gap (the deviation between desired and actual housing consumption) at the state level as due to cultural, climatic and institutional differences, the nature of housing problem at the state level differs. As discussed in the chapter, there are differences in housing affordability and housing gap at the state-level. Access and penetration to formal finance and development approval processes also differ. These together indicate that an approach to addressing housing gap will require a shift away from the macro notion of housing shortage and would need sub-national interventions, which are contextual to states and augment households' own efforts to adjust their housing consumption. This would mean programs should place larger emphasis on self-help construction activities and improving penetration of formal finance in less well-off states. Experience of PMAY also indicates that assisting upgradation or extension will have better success than building new to meet household housing consumption requirements.