HDFC wants easier farm land rules to meet housing demand
HDFC (Housing Development Finance Corporation) has called for relaxation of laws governing rural land to meet the housing demand. The country’s largest mortgage financier has called for simplified conversion of land from agricultural to non-agriculture and also for allowing farm land as security for home loans.
Speaking at a South Asia Housing Finance Forum event, HDFC managing director Renu Karnad said India was urbanising at a pace that is higher than the world average. "Its cities today are unable to cope with the burgeoning population. Projections indicate that by 2030, more than 40% of the country’s population will be residing in urban areas compared to the present 28%," she said.
Pointing out that the housing stock is unable to keep pace with the demand, Ms Karnad said the result has been an environment of mushrooming unauthorised constructions, congestion and proliferation of slums and degradation of the urban living experience.
According to Ms Karnad, the high cost of land in metro cities is one of the greatest hindrances in providing affordable housing. However, if homes are built in far-flung outskirts, where the land may be cheaper, there are often no takers for such dwellings since the necessary infrastructure in terms of mass rapid transportation systems, schools, hospitals and other civic amenities may not be available, she added.
"The solution lies in having to integrate the process of providing connectivity and infrastructure amenities along with mass scale housing," she emphasised.
Ms Karnad said while the total urban land stock in India is only 2.3% of the country's total geographical area, it houses 28% of the country’s population. "Thus at a policy level, there is a need to bring in additional urban lands on a regular basis. The process of land acquisition and conversion of agricultural lands for urban use also needs to be simplified," she said.
The main challenge, according to Ms Karnad, is providing homes to those who cannot afford them. "The economically weaker section and the low-income group are defined as households with annual incomes ranging between $850 and $2,000 per annum. Clearly, only market-based solutions cannot work. For the low-income group, we cannot just talk about affordability factors — some form of subsidisation is required."
Ms Karnad also called for an enabling environment to encourage developers come up with affordable housing. "For instance, if developers are provided a fast-track, single-window clearance mechanism for affordable housing projects and if the land is provided by the government, developers would be sufficiently incentivised to build mass housing units. Further, if land titles are clear, most lenders would not hesitate to make small-ticket sized loans," she said.
Speaking at a South Asia Housing Finance Forum event, HDFC managing director Renu Karnad said India was urbanising at a pace that is higher than the world average. "Its cities today are unable to cope with the burgeoning population. Projections indicate that by 2030, more than 40% of the country’s population will be residing in urban areas compared to the present 28%," she said.
Pointing out that the housing stock is unable to keep pace with the demand, Ms Karnad said the result has been an environment of mushrooming unauthorised constructions, congestion and proliferation of slums and degradation of the urban living experience.
According to Ms Karnad, the high cost of land in metro cities is one of the greatest hindrances in providing affordable housing. However, if homes are built in far-flung outskirts, where the land may be cheaper, there are often no takers for such dwellings since the necessary infrastructure in terms of mass rapid transportation systems, schools, hospitals and other civic amenities may not be available, she added.
"The solution lies in having to integrate the process of providing connectivity and infrastructure amenities along with mass scale housing," she emphasised.
Ms Karnad said while the total urban land stock in India is only 2.3% of the country's total geographical area, it houses 28% of the country’s population. "Thus at a policy level, there is a need to bring in additional urban lands on a regular basis. The process of land acquisition and conversion of agricultural lands for urban use also needs to be simplified," she said.
The main challenge, according to Ms Karnad, is providing homes to those who cannot afford them. "The economically weaker section and the low-income group are defined as households with annual incomes ranging between $850 and $2,000 per annum. Clearly, only market-based solutions cannot work. For the low-income group, we cannot just talk about affordability factors — some form of subsidisation is required."
Ms Karnad also called for an enabling environment to encourage developers come up with affordable housing. "For instance, if developers are provided a fast-track, single-window clearance mechanism for affordable housing projects and if the land is provided by the government, developers would be sufficiently incentivised to build mass housing units. Further, if land titles are clear, most lenders would not hesitate to make small-ticket sized loans," she said.
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