New Delhi: The convention addressed one of the most pressing challenges in India’s real estate sector—affordable housing. Speaking at the session, Mr Kuldip Narayan, Joint Secretary, Ministry of Housing and Urban Affairs (MoHUA), emphasized that increasing the Floor Space Index (FSI) alone cannot resolve the country’s housing shortage. Instead, he underscored the need for a comprehensive policy mix encompassing land availability, planning regulations, and economic incentives.

He noted that while a higher FSI may be effective in land-constrained cities where vertical development is inevitable, it constitutes only one component of a broader solution. The housing deficit, he pointed out, is driven more by the opportunity cost of land than by construction costs—particularly in metro cities where speculative practices have inflated prices.

To address this issue, the Joint Secretary proposed a compliance framework mandating large residential townships and commercial projects above a certain threshold to allocate a portion of their development to affordable housing. Developers, he explained, could fulfill this requirement by constructing affordable units within the same project, delivering them in another project located within a one- to six-kilometer radius, or by purchasing Affordable Housing Transferable Development Rights (TDR) from other developers.

If none of these options are feasible, developers should contribute through a shelter fee determined by local authorities. He recommended that at least 40% of the obligation be fulfilled through actual construction, with the remaining 60% settled via the shelter fee. This blended approach, he noted, would ensure a steady supply of physical housing while offering developers a degree of flexibility.

Highlighting the importance of location, Shri Narayan stressed that affordable housing projects must be situated near metro corridors and transit hubs. Forcing low-income households to city peripheries, he warned, undermines livability and limits access to employment opportunities.