Why affordable housing is not taking off?

Though affordable housing was a good concept it never really took off for that matter, as most of the affordable housing projects were located in far-flung location, and that made many not to go for these affordable houses, and developers were able to build these affordable houses mainly due to the less realty prices where these houses were located, but people will only come if the property is having all the social infrastructure and easily commutable, though affordable looked promising, but factors like these prevented them from taking off......

In any housing project, there are 3 major components:

1. Land.

2. Cost of bare structure.

3. Cost of interior and exterior finishing.

Now cost of structure does not vary much from place to place, except material carrying cost.

Land cost varies too much from place to place, depending upon development, infrastructure ready and other factors. But people prefer only already developed areas, which are costly. So developers perefer to build houses in such areas only.

In actual construction, major funds go to interior and exterior finishing, rather than on bare structure itself. Now-a-days people like to have good finishing. So this item too cannot be economized.

Cost of housing can be reduced only if these are built in a bit remote area, and with lower finishing specifications. These 2 things are not in demand, and so its not happening.

The low cost housing will be located in distant area and it will kick off only when reliable and affordable means of transport is available.

I feel this would not be possible till the raw material(such steel, cement, ... etc,) prices does not cool off. Currently these prices are soaring and dont give opportunities for such projects to start off and hence, the delay in keeeping up their words of affordable houses. Yes to greater extent also those reasons mentioned about by our friends also play a vital role in setting up such projects. .... Thank you, Manish N

Cheers!!

In construction of any structure you cannot compromise on quality. Because of lack of land these houses has to be multi-storied buildings. We know these structure are build to last for specific periods. So construction cost cannot come down, so the builders has to reduce their profit margins. There comes the soical responsibility.

I am not familiar with all of the factors affecting affordable housing in your country, but in reading the various postings here I hear a number of similar arguments...and even misconceptions...as I have experienced in mine and elsewhere around the globe.

First, simply because it is labeled "affordable" does not mean at all that it is not subject to the same market dynamics as any other category of housing, especially that of supply and demand.  In other words, just because the product is "cheap" does not mean people are going to buy it if it does not meet their expectations...i.e., all of their needs and most of their wants.  No matter who is your target market they need to be accommodated and satisfied with their purchase rather than feel slighted or condescended to...much less cheated.

Second, no one wants to live in "affordable housing", but most people want housing that is affordable.  In most parts of the world with a rising middle-class you find that what the aspiring class wants is "to be" or at least "to appear to be" at least one, if not two or three steps farther up the socio-ecnomic ladder than what they really are...and can afford.  So, in order to be successful your so-called "affordable housing" needs to approximate the look, quality and features of that housing in demand elsewhere amongst those your target market aspires to be like.  And "yes", this can be done...and "no", it is not simply a matter of cutting corners.  It is a function mainly of value engineering, astute acquisition models and creative financing.

Lastly, it has been my experience that if the intention of "affordable housing" at least includes the goal of providing decent shelter for the "working-poor" then you cannot depend on the social consciousness or conscience of the marketplace.  This does no mean such character traits are non-existent.  It simply means that they are to a great extent mutually exclusive.  The goal of helping or at least facilitating the poor is simply not compatible with the profit motive.  Yet, government is probably the least able to accomplish such a goal in either an effective or efficient manner.  However, the synergy of charitable contributors, professional volunteers and active participation of the recipients...all working together with mutual respect (and without paternalism)...affords (in my opinion) the most effective chance for a successful outcome.      

I welcome your comments, feedback and criticism.

The big boom in real estate and flat constructions was 60 % due to the booming software industry, i.e due to the high salary packages, people were takin home loans left n right to avail the tax benefits it offered, And basically even low cost houses were bought by the employed only for tax benefits, and was either left for rental or lease.

technology is another factor which is hindering low cost mass housing. In our country we are still far behind in using tchnologies which are most cost effective. Also research is also lacking inthis field. Until we develop technologies to use local material and resources we may not be able to provide low cost houses affordable to poor