PPP Policy, A Major Boost to the Affordable Housing Scheme

Pune is an important city that has witnessed a tremendous growth in the terms of real estate industry. The place is flocking with a flurry of students who relocate here from across the globe. One can find anything varying from premium malls, restaurants, theatres, world-class infra-facilities, etc. in this city. It has emerged as the hub of realty developments with a plenty of options in the affordable housing segment. There is a wide range of projects offered at smaller budgets. Unlike any other big city in the country, the cost of living is lower in Pune. It offers excellent connectivity to important cities like Mumbai and is close to some beautiful hill stations. Its cool and pleasant weather acts as another major factor why people get attracted towards this realty hub.

 With an objective to give a boost to the affordable housing in Pune, the Union Government on 21st Sept 2017 introduced a PPP Policy, public-private-partnership. As per this new policy, the central assistance will extend up to Rs 2.50 lakhs per house on every unit that is built on private/ government land by private builders.  The government in its endeavor to open up private investments in affordable homes built on government land in urban areas, offers the developers with eight PPP options to make investments.

This new affordable housing scheme will give a major push to the speedy construction of approximately 45000 flats in the city to be made available within the next few years.

As shared by Maharashtra CREDAI, this had been a long pending demand made by the Confederation of Real Estate Developers’ Associations of India (CREDAI). In order to achieve the ‘housing for all’ targets, the introduction and promotion of PPP model was important as it would facilitate the construction of houses in the affordable segment.

The two options offered under this new scheme are – firstly, the centre will extend funds up to Rs 2.5 lakhs per unit in the form of interest subsidy on bank loans, to be made as upfront payment as per CLSS (Credit Linked Subsidy Component) of PMAY (Pradhan Mantri Awas Yojana) in urban areas. OR the second option is that the centre shall extend Rs 1.5 lakhs per unit on every home built on private land, in case no bank loan is availed.

A MoU has been signed between CREDAI and Union Government to build homes under affordable segment and in the next few years around 45,000 flats of size 60 sqm shall be ready in Pune.

As estimated, owing to several FSI proposals like premium FSI for transit corridor, many more flats are expected to be developed. Pune in the coming year will need approximately 6 lakhs houses out of which 3 lakhs will be used for non-slum people and the remaining by slum occupants.

Hence, this new policy shall also add to the benefits of investing in real estate Pune.