Gauba proposes no stamp duty, lower land charges for affordable housing

According to reports from ANI, NITI Aayog Member Rajiv Gauba identified land availability as the heart of the affordable housing problem in India. Speaking at the National Conference on Reimagining Affordable Housing - From Scheme to Sustainable Ecosystem in Delhi, Gauba stated that land availability lies at the heart of the problem, with land accounting for a high share of total housing project costs in some cases, making affordable housing projects less viable. He emphasized that land, as I said earlier, is the most binding constraint in the housing sector and therefore it has to be at the centre of the reform agenda. The joint NITI Aayog and Ministry of Housing and Urban Affairs report proposes a set of measures to address these constraints, with most of the implementation lying with state and municipal authorities. NITI Aayog has proposed a series of land and urban planning reforms aimed at making affordable housing projects more viable, including waiving land-use change fees for land dedicated to affordable housing and exempting affordable housing units from stamp duty (5-7 per cent of the transaction cost). The recommendations also call for reserving at least 10% of residential land as affordable housing zones in master plans and raising the permissible Floor Area Ratio (FAR) for such projects to 5-6, promoting transit-oriented development, land pooling and transferable development rights, easing parking and density norms and creating land banks.

As reported by ANI, Gauba highlighted that access to capital was another major constraint and called for alternative underwriting approaches for households whose incomes are not adequately captured formally, along with new financial products for the affordable housing ecosystem. He noted that developers consistently report that margins in the economically weaker section (EWS) and lower-income group (LIG) segments are too thin to attract private investment. This has led to private sector activity shifting towards higher-income group (HIG) and luxury houses, creating a shortage of low-income homes. The joint NITI Aayog and Ministry of Housing and Urban Affairs report proposes expanding planned urban areas and reserving at least 10 per cent of residential land as affordable housing zones in master plans. The conference also focused on access to capital – demand and supply side through sessions covering project finance, home loans, and initiatives from National Housing Bank (NHB) and HUDCO. On the financing side, Gauba called for greater participation from the financial sector, including financial innovation and increased private capital in affordable housing. The broader reform framework also focuses on improving access to finance for both housing projects and homebuyers, with the Department of Financial Services and the Indian Banks' Association discussing home-loan products for people working in the informal sector.

According to ANI, Gauba stressed the importance of strengthening the rental housing ecosystem, noting that ownership is not the only housing solution for migrant workers, industrial labour, students and young professionals. He highlighted that nearly 1 crore vacant houses in urban India remain outside the market due to weak tenancy frameworks, low rental yields and litigation risks. Gauba called for addressing low access to capital and stated that affordable housing should not be viewed as a subsidised segment but as a large emerging market. He noted that the Ministry had prepared the model tenancy law some time back, which had been approved by the Cabinet and reported to the states, but very few states have fully adopted it. The government has also identified rental housing as a key part of the affordable housing ecosystem, with reforms being considered to expand rental accommodation for migrant workers, young professionals, students and industrial workers. The conference session on Expanding Housing Accessibility through Rental Housing and Vacancy Unlock Strategies deliberated on rental housing regulatory reforms and the rental housing exchange, with experiences from Tamil Nadu, Andhra Pradesh, Gujarat, Odisha, Telangana and Assam.

As reported by ANI, Gauba urged the Ministry of Housing and Urban Affairs to use its funding leverage under various missions to push states to implement the reform agenda. He emphasized that the conference should result in an agreed and time-bound plan of action to address the affordable housing crisis. Gauba noted that the shortage of affordable housing would increase as population growth and rapid urbanisation add millions of people to cities and towns. MoHUA Secretary Satendra Singh said affordable housing should be viewed not only as a social necessity but also as an engine of economic growth, employment generation and sustainable urban development. The conference provided an opportunity to review the progress made by States, learn from successful reform initiatives and collectively identify practical strategies for accelerating implementation under PMAY-U 2.0, which seeks to support 1 crore additional eligible urban families through a demand-driven approach with emphasis on diverse housing solutions, technology-enabled implementation, access to finance and stronger institutional partnerships. The discussions are expected to feed into a roadmap for housing-sector reforms, with the government looking to strengthen coordination among the Centre, states, urban local bodies and financial institutions to build a more accessible, inclusive and sustainable affordable housing ecosystem.