The Union Cabinet took a landmark decision by giving its approval to the Affordable Rental Housing Complexes (ARHC), which is a sub-scheme under the Pradhan Mantri Awas Yojana- for urban migrants and the poor. It also fulfils the government’s ambitious ‘Housing for All by 2022’ initiative.
As per this scheme, the government-funded housing in urban cities will be made livable by repair, renovate and maintenance of rooms and filling up other infrastructure gaps, including road, sanitation, sewer, water, etc. It’s indeed a praiseworthy move by the government as it is estimated that it will benefit more than 3,50,000 people.
The scheme is clearly an attempt to bridge the shortfall of dwelling units across the country. The absence of affordable rental housing in major cities has led to mass traumatization within the migrants that had zero income during the lockdown. Thus, the government had to shift gears of their Housing for All initiative and include affordable rental housing as part of it.
All states will also be asked to develop such products and encourage private partnerships. The move will not just regularise the rental housing market across the country, but it will also add another asset class to be considered by developers at large.
Many developers have significant land parcels both within the cities as well as their peripheries – the latter land parcels being prime candidates for affordable housing, including rental housing. However, low yields are likely to be a major deterrent for attracting private participation. Even while funding for such projects is said to be given at concessional rates, it may still be unviable for developers who have bought land within city limits at steep prices earlier on. Even while the government has tried to address these deterrents and provide benefits and incentives, we will have to wait and watch and see how this move can mobilize the interest from the industry.
Read in detail here https://www.surfacesreporter.com/articles/61807/cabinet-approves-affordable-rental-housing-development-for-urban-migrants