Sealing Cracks In Housing Policy

The judgement of the Supreme Court in a case relating to speculative investments in real estate emphasises, rightly, the right to shelter as a facet of the right to life under Article 21 of the Constitution. Although the case before the bench of Justices JB Pardiwala and R Mahadevan was primarily to decide whether the Insolvency and Bankruptcy Code could be invoked by a speculative investor, who had no interest in taking possession of a property, the court recorded the ills afflicting the housing sector, notably the building of asset bubbles. In particular, the bench noted that the state must proactively address “the menace of a parallel cash economy and speculative practices in the real estate market”, which artificially inflate costs and enable “trigger-happy investors” seeking easy exits to jeopardise the prospects of genuine house buyers. Evidently, despite the enactment of regulatory RERA laws in states, the market requires deeper reforms. A major policy lacuna that has weakened the right to housing is the withdrawal of state housing boards from the creation of adequate affordable housing, particularly rental units. The PM Awas Yojana-Urban, now in its second five-year iteration, was introduced to advance Housing for All, although it caps beneficiaries to a maximum annual income of Rs 9 lakhs. So far, 93 lakh houses have been built under PMAY out of 1.19 crore sanctioned, official data say. Yet, the lived reality of slums and ramshackle dwellings dotting cities is evidence of a lack of commitment towards radical transformation. Equally, there is an unhealthy reliance on the speculative market to create housing for the middle class. Derivative instruments in commercial real estate remain legal, inflating land costs.

To many policy analysts, the current urban development model has run its course and is ill-equipped to expand affordable housing in core cities because land is unavailable. Decades of poor regulation led to anomalous development that does not allow for the provision of quality civic services such as roads, water supply, sewerage, rainwater drainage, public transport, health, education and recreation facilities. The tendency of states to stretch metro rail lines to distant suburbs with no control over housing markets along the way continues to replicate the ills that confound inner cities. As the Supreme Court observed in another case, “The right to shelter does not mean a mere right to a roof over one’s head but the right to all the infrastructure necessary to enable them to live and develop as a human being.” Now that the court has ordered the constitution of a committee headed by a retired High Court judge with the government, industry, and NITI Aayog participation to come up with “commercially viable systemic reforms for cleansing and infusing credibility into the real estate sector”, the imperative is to strike a blow for the citizen, deepen transparency, and revitalise social housing.