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Affordable housing: How can developers bring down costs?

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Affordable housing: How can developers bring down costs?

Last updated: December 2 2019
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  • Affordable housing: How can developers bring down costs?

    How can affordable housing be made more affordable by optimising costs? Are developers willing to bring down costs and develop homes at costs cheaper than the existing ones? Can it be done?
  • #2

    #2

    Re : Affordable housing: How can developers bring down costs?

    Just to recap a bit, the Affordable housing segment has been moving ahead positively owing to government initiatives, that include the Pradhan Mantri Awas Yojana (PMAY) scheme, the Housing for All by 2022 mission and the granting of industry status to the segment.
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    • #3

      #3

      Re : Affordable housing: How can developers bring down costs?

      Thanks Malvish But what do the numbers tell? How is the progress in numbers?

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      • #4

        #4

        Re : Affordable housing: How can developers bring down costs?

        The PMAY was launched in 2016 with the objective of building 20 million houses in the country, out of which, the government has sanctioned nine million homes, with Maharashtra having more than 4 million such houses.
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        • #5

          #5

          Re : Affordable housing: How can developers bring down costs?

          Thanks Malvish but is the Affordable Housing segment getting the desired participation of private builders?
          Last edited November 5 2019, 11:57 AM.

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          • #6

            #6

            Re : Affordable housing: How can developers bring down costs?

            Well, the Ministry of Housing and Urban Affairs has been trying to rope in private builders into the affordable housing segment through six public-private partnership (PPP) models but they have been keeping away owing to issues faced at the ground level. Issues like land scarcity, lack of transparency vis-ŕ-vis property records, market trends that don't favour such segment, socio-political influence and lack of skilled manpower has been keeping private builders away from the affordable housing segment.
            Last edited November 7 2019, 09:50 AM.
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            • #7

              #7

              Re : Affordable housing: How can developers bring down costs?

              Thanks! But these issues crop up in constructing houses in general right? So why the reluctance to join this particular segment?

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              • #8

                #8

                Re : Affordable housing: How can developers bring down costs?

                Well, of all the issues faced by builders intending to join the affordable housing segment, low profit margins are the most pressing. In comparison to mid-segment or luxury projects, giving 20%-30% profit, affordable homes hardly have a margin of 10%.
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                • #9

                  #9

                  Re : Affordable housing: How can developers bring down costs?

                  Right, that is the only motivation of builders anyway - Maximum Profits! So how can costs be optimised to benefit all?

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                  • #10

                    #10

                    Re : Affordable housing: How can developers bring down costs?

                    The design of a project can help bring down costs from the very beginning of construction. A simple to construct and sustainable building design, without any complex elevation features, while also fulfilling construction norms and environmental factors can help bring down costs by a significant amount.
                    Last edited November 11 2019, 12:28 PM.
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