Understanding Affordable Housing

Nov 22, 2022

2 min. Read

Understanding Affordable HousingOthers

Affordable housing refers to housing units that are affordable by that section of society whose income is below the median household income. In India, affordable housing is provided for low income people, middle income people and economically weaker sections who have considerably low levels of income (urban areas). Affordable housing is a key issue in developing countries like India where majority of the population isn’t able to buy houses.

Advantages and Benefits of applying for a affordable housing :

nitiatives for affordable housing

Recognising the importance of providing housing to the poor sections, government has initiated a group of measures over the last fifteen years. As a beginning, the National Urban Housing and Habitat Policy (NUHHP), 2007 has set the objective of Affordable Housing for All as a key focus. Later, the government has set 2022 as the target year to realize this objective by making specific initiatives for the promotion of housing. Two components under Pradhan Mantri Awas Yojana – the PMAY (Urban) and PMAY (Rural) were launched by the government for achieving housing for all by 2022.


PMAY (Urban): affordable housing for the urban poor

For the urban poor, the government target is to construct 20 million houses by March 31, 2022 under Pradhan Mantri Awas Yojana-Urban, that was launched in June 2015. The scheme gives financial assistance to States/Union Territories (UTs) in to support housing requirements of three identified income categories: Economically Weaker Sections (EWS), Lower Income Group (LIG) and Middle-Income Group (MIG) in urban areas.

PMAY (Rural) -affordable housing for the rural poor

The PMAY – Gramin was launched in 2016 to construct affordable houses in rural areas and complete it by 2022 (date extended). To further strengthen the demand for affordable units, the government should look at rationalising or waiving off registration charges, as well as stamp duties for such units. There is a need for developers to invest in innovative construction technologies to promote mass housing developments at subsidised construction costs. Portable modular housing units and prefabricated construction technology are some techniques that could be looked at to address affordable housing needs. A holistic line-up of such demand and supply side interventions can ensure that the slew of budgetary incentives, government allocations, and the real estate sector’s involvement, achieve fruition.


This article is authored by L&T Finance.

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