Why Chennai needs a Truly Affordable Housing' model?

Chennai: After having been a model state for decades in offering relatively stable two-party rule and a democratic ecology to help foster harmonious social relations, rarely has the Tamil Nadu polity felt such big tremors as seen in recent weeks, accentuating the political uncertainty and resulting in deeper social costs. 

However, the moral of the story is that States being relatively better off economically does not necessarily mean political stability even if the converse may be true. For, ironically this political shake-up after former Chief Minister J Jayalalithaa’s demise, has come on top of nearly two decades of very rapid economic-cum-urban development.  

From being only the second or third fastest growing State in terms of growth of urban population in the late 1990s’, Tamil Nadu, as per the 2011 Census, has emerged the first in the country in the proportion of urban population to its total population at 48.50 per cent, overtaking even its traditional rival Maharashtra in this aspect at 45.20 per cent. Interestingly, Kerala is the second fastest growing urbanised state in the country as per the 2011 census at 47.70 per cent, and Gujarat comes fourth at 42.60 per cent.

While this trend reinforces the view that large cities have been the “drivers of national economies and contribute to a disproportionate share of the country’s wealth”, it is amid this larger socio-economic backdrop, that a Chennai-based think-tank, ‘Mylapore Institute of Policy Research (MIPR)’, has come out with a policy paper that articulates what it calls a “more radical approach to truly affordable housing in Chennai”.  

For if the urban legacy of Chennai is to be preserved and strengthened – recently it won accolades from UNESCO in being included in the network of ‘Creative Cities’ for its contributions to classical music - this southern metropolis needs to seriously address its housing scenario. More so, the much expected crash in land/real estate prices after the Centre’s demonetisation of high value notes in November last year, has been a mirage.

Mr. Shiv Kumar, president, MIPR, who has been associated with bringing out this policy paper very eloquently, says: “The heart and soul of a thriving city are its manual and blue collar workers – the drivers, cleaners, plumbers, gardeners and security personnel. The primary need of this group is affordable housing within city limits. This is possible only if land is acquired at minimal cost. The MIPR is proposing an innovative solution by developing Government owned lands for both affordable ownership and rentals. Chennai can seize the leadership in India on truly affordable urban housing and attract national attention”. The think-tank was launched with the initial support of India Cements group.

Going by a report of the technical group of the Union Ministry of Housing and Urban Development, which has placed the housing shortage in India at nearly 19 million units (as per 2012 figures), Tamil Nadu accounts for 15 per cent of this total housing shortage. And 95 per cent of this shortage pertains to the ‘Economically Weaker Sections (EWS)’ and Lower Income Group (LIG) sections.

These sections constitute a crucial workforce in the city’s development and providing them housing in “inner city areas” is the biggest challenge in the years to come, given the difficulties in availability and in the price of acquiring land, the paper points out. Some recent initiatives have proposed housing units for these EWS and LIG sections at places far away from the city, but it makes it difficult for them to commute to work in the city.

Hence, the policy paper for enabling ‘affordable housing in Chennai’ has proposed a two-pronged approach. Chennai, the paper points out, has over 304,980 households spread across 1,131 slums, with the majority living in poor (semi-pucca or kutcha) housing, as per a survey done by the Tamil Nadu Slum Clearance Board (TNSCB) in 2013. The metro has over one million slum dwellers spread across 1,000 slums, the bulk of the EWS of the city “and probably comprising the backbone of the manual labour base,” it says.

The first of the MIPR proposal is to ‘develop the target slum site with a minimum FSI concession of 3.0,” says the policy paper. Say at any TNSCB site, the existing residents could be re-allotted houses at the same site with no extra cost in 60 per cent of the built-up area, with the remaining 40 per cent offered for “sale on a lottery basis to EWS at a discounted price”, argues the paper. Thus additional units for new dwellers can be created at a discounted price and the “EMI for new buyers under the Pradhan Mantri Awaas Yojana (PMAY) would be at an affordable Rs 4,200 p.m. on borrowings of Rs 6 lakh”.

While it is proposed that the Tamil Nadu government “bears the full cost of registration of the flats, the paper suggests, “all remaining net costs of the slum redevelopment are fully funded by CSR (corporate social responsibility) contributions. New buyers of flats will be eligible for the centrally-sponsored PMAY scheme to lower borrowing costs.” “This model generates 1,000 flats of 400 sq. ft. each, under a FSI of 3.0”, it points out.

While this option, Mr. Shiv Kumar believes would generate “considerable CSR contribution interest,” the second option mooted by the policy paper to meet the housing needs of EWS and LIG groups is to “unlock the potential of vacant government lands” and develop them for affordable housing. Further analysis needs to be done to “estimate the total area of vacant government lands and the cumulative potential to create new rental housing stock within the city limits”, the policy paper added. The MIPR plans to take these proposals to the State government shortly to get its initial feedback.