Atanu Dey On India's Development

Affordable Housing

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tata_shubhgriha

Urbanization of the population implies greater demand for housing in cities. There has to be a portfolio of housing options available for the diversity of people which constitute a city. I am familiar with the property prices in the San Francisco Bay area, one of the highest in the US. Even I get a sticker shock when I see the prices of housing in Mumbai. I cannot imagine how the poor manage to survive. Which partly explains why about half of Mumbai’s 11 million people live in slums.

Last week Saturday I was at the ISB in Hyderabad to attend a working group on urbanization. One of the most important components of urbanization is housing. At the ISB, Dhaval Monani is working on affordable housing and has plans in place for putting up low cost around 250 sft homes (on 450 sft land parcels) for around Rs 2 lakhs (or $4,000). They will be built around industrial areas which are often situated in the outskirts of cities. That’s an exciting project.

Now I hear (Hat tip: Naman) that Tata is entering the affordable housing sector. See the BusinessWeek report, “Tata’s Nano Home: Company behind world’s cheapest car to sell $7,800 apartments

Tata, the Indian company that made worldwide headlines with its $2,000 Nano car, now plans to build 1,000 tiny apartments outside Mumbai that will sell for $7,800 to $13,400 each. The company plans to roll out low-cost projects outside other major cities.

TIME.com has a bit more of the details.

The homes will be built in three sizes, all extremely cramped by Western standards: 283 sq. ft. (one room, including kitchen plus a bathroom), 360 sq. ft. (ditto), and a 465-sq.-ft. model with a tiny bedroom. In addition to the modest proportions, Tata is relying on economies of scale and careful sourcing of materials to keep costs low. The Mumbai project, for instance, will get its steel from group company Tata Steel, which has plant at nearby Tarapore. Land-acquisition costs will be minimized by giving the original landowner a percentage of each project’s returns. The homes will occupy cement buildings no more than two stories high, because construction costs go up as buildings get taller. There will be eight to 12 homes per building.

I took a look at the floor plans of these units and I must say that I liked them.

tata-affordable-plans

Good job, Mr Ratan Tata.

  • topnaman

    I remember checking out an apartment in Walkeshwar when I was living in Mumbai – they wanted 50 lakhs for about 350 sq ft. Now granted, it was on the 8th or 9th floor overlooking the ocean but that didn’t dampen the sticker shock.

  • rohit_indian

    I very much liked the idea of Tata building such great project. Here are some of the thoughts though. If TATA can build such , for sure government can do better. Why it can not solve the problem housing for poor in the same way ? We have so many money ripping housing related institutes there which can learn how do such things. Now if poor can afford and invest in such scheme of TATA , they can also ask something like this from Government. Why are they not asking it then ? Don’t they know this ? If not , Why that is the case ? Also i hope some other big players in infrastructure field to follow such initiative.

    Atanu, Also this scheme convinces me of what you have always been talking about urban planning , converting our villages to smaller self sufficient cities. Such things do seem to have potential to solve our problems.