By: Brotin Banerjee, MD & CEO, Tata Housing
Track2Realty Exclusive: The future of integrated townships is fraught with hurdles, yet it is the only win-win housing solution in the horizon. It is one of the primal human desires to own a home at a nice, peaceful locality with most immediate necessities in the vicinity. Till only recently the fulfillment of this desire came at a heavy price, leading people to often settle for less. These days, this has become affordable, thanks to the concept of integrated townships.
Integrated townships combine the best of old-world peace and quiet with modern amenities conveniently available. That this also comes at affordable pricing is its biggest advantage. However, despite its perceptible win-win formula, it is a concept whose future is plagued with hurdles.
The Hurdles:
The biggest hurdle ironically comes from the Government. The real estate sector is expected to comply with a variety of complex regulations. The issue however is not the regulations, but the way it is handled by the central and state Governments. Without any single window clearance, integrated housing projects take years to take off as a developer has to deal with multiple regulatory bodies thus increasing the cost which makes it less viable for buyers in the end.
With increasing inflation the cost of construction material has also gone up, making affordability a big challenge for developers. Inflation also increases the interest rates on home loans, further compounding problems.
Then there is the problem with the real estate industry itself. The housing requirement of a fast developing India is slated to grow at such an extent that the supply will fall short of demands at least for the next couple of decades. Yet, there is a shortage of quality staff in managerial, financial, technical and organizational departments. There are not any specialized courses geared to meet the demands of the industry either. Also professionals trained in the few courses that do exist like civil engineering, are poached upon by other sectors like IT.
The long gestation period required to recover investment in infrastructure projects also make it unattractive for those like mutual funds who have the money to invest in such projects. Thus the industry is perennially in a state of liquidity crunch.
The Opportunities
Despite the hurdles, the housing market in India is in the midst of its greatest boom. The overall demand for housing in urban India is slated to reach around 10 million by 2015. Statistics show that most of the residential requirement in real estate in India lies in the range of Rs. 2000 to Rs. 4000 per square foot i.e. within a capital outlay of Rs. 15 to Rs. 40 lakh per unit of housing. And this segment wants lifestyle to go with the houses.
Yet, it is a market where the developer has to ensure that the end customer is able to meet 80% of the housing cost from low interest loans. The only way to achieve these seemingly divergent objectives is integrated townships. However, the problems mentioned above and inability to find land in urban centers or to meet regulatory approvals, are taking a toll on business.
The Only Way:
Integrated townships are still the way ahead for the future. In a world where urban spaces are limited but the number of people increasing, integrated townships best utilizes the full potential of a particular piece of land while giving more than the amenities that that piece of land can be expected to have. People are anyways always crying hoarse about unplanned cities and city regions that lead to innumerable problems including traffic chaos, long distance for basic amenities like school, hospital, shopping mall, parking space, parks etc.
Integrated township, by giving the developer an opportunity to plan a large tract of land to its best possible use, takes care of these problems. It is obvious that a developer will exploit the potential of the available space to the hilt to not only house the largest number of people but also give them the best possible facilities. It makes business sense for them.
Integrated townships thus ease urban pressure while giving the customers the best of resources and facilities at an affordable cost. In short, integrated townships are a win-win proposition for all stake holders: the consumer, the developer and also the local municipality and state government. In the kind of urban congestion we are beginning to see in India with a large population migration to cities every year, this is perhaps the only way.
The future of urban living is thus integrated townships, and the future of integrated townships is definitely bright, especially in the light of unprecedented urban growth. The hurdles in the path are many as well. Yet it is only by taking stock of the opportunities, overcoming the hurdles and having a clear vision can one face the future boldly. The real estate sector must come together to do this. It owes this to the nation and its people.
Tata Housing’s Solutions:
Tata Housing Development Company Ltd., has built many integrated township in different cities of India. Two townships built in the overpopulated and congested city of India, Mumbai, become prime example of taking care of the hurdles and succeeding in providing housing with the best possible amenities and at affordable rates. These two townships are – New Haven in Vasind and Subh Griha in Boisar.
Both these townships are located around a green and desirable landscape and are near railway stations. Yet, the greatest strength is that at a very affordable price, it provides an unparallel range of amenities and experiences that creates a positive ecosystem. Also included are other facilities that are geared to spruce up not just individual experience, but community life of the two townships.
At the core of both these projects, is the underlying philosophy of Tata Housing that understands that affordable housing provided by integrated townships not only creates value and profits for its stake holders, but also fulfils a crucial social need for the society and the nation at large.
