Housing Shortage – An opportunity in waiting

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January 16, 2012 by Parthajeet

India has made enormous strides at the global platform over the past two decades. Some even say that India is one of the superpowers today. Irrespective of the appropriateness of an adjective to describe India, the fact remains that India today garners more global recognition than it did fifteen or twenty years. Having said that, it appears that governments and the business community in general is focused largely on the global positioning of India and the fruits thereof. At home, the economic opening-up has led to a large population of people whose purchasing power is increasing by the day as consumerism grows by leaps and bounds. At the same time though what is ignored is the fact that a large majority of the population still has no access to clean water, power, housing, education and healthcare. The day to day lives of this majority has not only remained same over the last twenty years, but has deteriorated in many cases.

Whereas about 30% of India’s population today lives in urban centres; it is estimated that nearly half of India’s population will live in urban areas by 2040. What is alarming in that the number of urban centres has practically remained the same over the last seventy years with no sight of this changing. There is thus increasing and unrealistic pressure on the infrastructure of urban centres as migration to these centres continue. As a result, living condition in these urban centres continue to deteriorate. ‘A better quality of life’ has been the incentive for such migration till now; but it seems that it is fast losing the very purpose. It is a paradox to which there seems to have been no answer. Let us try and see what we can do.

MIGRATION – DRIVING FACTORS

Education
Healthcare
Employment
Housing and associated factors like water and power

Are these not the top factors contributing to the migration from semi urban and rural areas to big urban centres? In urban centres, it has been seen that along with the government, the private sector has a large role to play in fulfilling these basic needs. On the other hand, in the semi urban and rural areas, the private sector has little or no role to play. Why? Because they see no business in ‘doing good’. The numbers do not match up for them….or so they think.

MARKET SIZE – HOUSING

The market size of this is 30 million units. Anyone with a basic knowledge of mathematics can calculate the business potential here. Amongst the four factors, this is the one with the largest “business potential”. It also has the potential for skill development and employment generation. It can easily lead to fulfilling the demand for the other three factors; i.e. education, healthcare and employment.

HOUSING – A DRIVER

In developed countries and in certain states of India like Kerala and Goa, one notices that the urban – rural divide is minimized. Almost everyone has access to the above four factors due to one reason or the other. So instead of a focus on reduction of migration, one needs to shift focus towards bringing in equality as far as access to the four factors go. A socially acceptable and economically viable model has to be set up. It is believed that all the four factors are interlinked and in these, housing can be a driver towards fulfilling the other three.

Every human being deserves to live with dignity in a house which can provide clean water and adequate power. Isn’t this considered basic for anyone who can read this document?

HOUSING >>>CLEAN WATER>>>POWER

How difficult can it be to provide this?

If this seems so simple, then why has no one cracked it? Why has housing not ‘taken off’? Why is the private sector missing in the semi urban and rural areas and not catering to this 30 million units market? A two year long research was conducted by Projectwell to get to the root of this. What came out of the research is this: ‘the style of construction of a house has not changed in India for years’. Despite India’s progress at the global front, one still makes houses the way houses were made fifty years back; brick by brick, layer by layer. This is one industry where virtually nothing has changed, despite the economic prowess that India has garnered. So the question is, is it possible to learn from other ‘industries’, where value reengineering and continuous research and development has led to efficient, safer, better and cheaper products year after year? Why is it that a car becomes affordable for more and more people every year whereas a house becomes less and less affordable for the same group of people?

HOUSE AS A PRODUCT

Can one look at a housing unit as a product? Extensive research and development at Projectwell has shown that tremendous cost and time efficiencies can be built into the erection of a house by engineering the house as a product. Such efficiencies translate to reducing the end user price of owning a housing unit, besides creating employment generation and a general sense of well being by way of living in a ‘good quality’ housing unit with clean water and adequate power.

An analogy may throw some light. A factory produced, mass customizable car is always cheaper than a Dileep Chhabria custom designed car. Similarly if every house needs the services of consultants like an Architect, Structural Engineer, etc, it is but obvious that cost and time efficiencies will be lacking. Can we think of a new role for such consultants?

Projectwell is on a mission to develop certain models of housing units in the ’30 million’ units category. While designing such units, value engineering is being done to reduce the costs drastically, along with the time required for erection. Projectwell is working jointly with global leaders in this mission. Amongst several knowledge partners that Projectwell is working with to develop these models, the prominent ones are KieranTimberlake, Sam Circle Venture, Royal Institute of Chartered Surveyors, Indian Institute of Technology and other regulators.

For the house to be sold as a product, merely looking at the construction practices and design alone will not do. One needs to look at the regulatory framework and other factors like access to credit as well. This is what Projectwell is researching as well, besides partnering with regulators and financial institutions to evolve a feasible model.

FINAL PRODUCT

It is Projectwell’s endeavour to develop a few standard housing models, with the capacity to modify them to individual tastes. Each unit will be sustainable and will have access to clean water and power. They will come packaged with access to credit and ease of paperwork. The package will be such that the units will be affordable to the user group it is meant for. It is believed that this will spur employment generation, setting up of educational institutions and healthcare facilities. The size of the market is such that it may require several others like Projectwell to operate in this space. Projectwell is only starting a mission, which it believes, will pave the way forward for many others to join in.

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