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The government is thinking hard about the ways to accommodate urban poor, a goal which can bring a round of applause for politicians. Urban housing is struck in between the outdated policies and bureaucracy.

Considering housing for poor a prime responsibility, the government has largely focused its attention towards development of large number of houses and allotted them to the poor. Funds have been garnered for development of such units, with the remaining cost shared between a bank and the beneficiary.

Demand for residential property among urban poor is increasing because of a rapid urbanization. Since, there is a shortage of land in cities; an effective urban policy requires to be brought into effect to optimize proper land use.

Outlined below are some suggestions for drafting housing policies for poor:

Housing policies must meet broader economic goals in the best way, thereby ensuring regulated urban development.

Any urban housing policy must give the first priority to urban poor who actually run the urban growth engine. Else, it will only serve as one of the futile incentives, which do nothing than promoting indiscriminate migration
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Government should look towards developing enough stock of rented housing for the poor. It will set a new paradigm instead of transferring ownership to inhabitants.

The rents will seldom be an additional burden on the poor, as they pay s 500 – 1,000 per month for dingy huts in slum, without access to basic facilities. Contrary to this, residents will not suffer from the problem of uncertainty in tenure. In any case, the government housing schemes now have a significant bank loan share, which the beneficiary (who can be allotted rent vouchers) repay in monthly installments. Rent Vouchers will only be helpful in replacing the rent payments.

Seeing the large demand for lower income housing units and the pool of long tenure financing prospects, these ventures offer large potential for builders.

A contract can be signed with private builders to develop these housing units for poor. A build-operate-transfer contract for tenure of 15-20 years can be an attractive proposition. They can collect predetermined rents and the rental subsidy from the government can be directly transferred to the builders. The move can help to ensure better focusing of the subsidies.

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