- A dwelling unit not more than 60 square metres is now officially an affordable house
- 'Affordable housing is defined as a housing project that uses at least 50% of the floor space index'
- Maharashtra government has proposed to create 11 lakh affordable housing units by 2022
MUMBAI: A dwelling unit not more than 60 square metres (645 square feet carpet area) is now officially an affordable house.
Last month, the Union ministry of finance, department of economic affairs, issued a notification that includes affordable housing as a new sub-sector within the social and commercial infrastructure category.
The notification states: "Affordable housing is defined as a housing project that uses at least 50% of the floor space index (FSI) for dwelling units with a carpet area of not more than 60 sq m."
But housing experts said "affordable homes" is a misnomer in cities like Mumbai and Delhi where property prices are higher than other regions in the country. Housing activist Chandrashekhar Prabhu said the size of a dwelling cannot define affordable housing. "It is a person's income and not the area of the apartment that should be the criteria," he said. For instance, he said, an affordable home is equivalent to a person's income for five years.
Pankaj Kapoor, managing director of real estate research firm Liases Foras, said a flat of around 600 sq ft in Greater Mumbai would cost roughly Rs 1.4 crore if one takes an average weighted property price of Rs 24,000 a sq ft. "This is certainly not affordable by any stretch of imagination," he said. "The government should have fixed a ceiling on the price for such homes. Otherwise, it is meaningless," he added.
In Maharashtra, the state government has proposed to create 11 lakh affordable housing units by 2022 but so far its plans have not taken off.
In the last union budget, affordable housing was given a further stimulus with the sector now given the status of infrastructure. The finance minister also announced that developers who build affordable homes will be exempted from paying taxes on their profits for five years starting 2016 instead of three years. These are for 300 sq ft homes in the four metro cities and 600 sq ft in the non-metro areas. These houses will now be sold on carpet area instead of build-up area.