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Last Updated : | Source: Moneycontrol.com

Centre to sign agreements with states on rental housing scheme within a month

Housing and Urban Affairs Ministry Secretary Durga Shanker Mishra said a memoranda of agreement will be signed with states within a month

Representative image
Representative image

The government is planning to sign agreements with states within a month to construct affordable rental housing complexes (ARHCs) for urban migrants employed in the industries, service sector, and manufacturing units close to their workplace. This will be in industrial as well as in non-formal urban sectors, a top government official said on August 4.

Housing and Urban Affairs Ministry Secretary Durga Shanker Mishra told reporters that a memoranda of agreement will be signed with states within a month.

He said that besides government-funded flats, vacant plots can also be developed to construct flats under the scheme. However, states will have to choose 'use permission' in their respective master plans to allow the same.


“We had a meeting with all the states last week and have shared with them copies of the expression of interest along with a draft of the memorandum of agreement." said Mishra, adding that they have to agree to provide concessional rates for water, sewage, property tax, among others, in writing.

“Once we get their acceptance, we will send out expression of interest to all states and provide a window of three months for those who have land available with them. We should be able to sign all the agreements and once these are signed we will issue the expression of interest within a month,” he said.

In Delhi, there are around 32,000 flats available under the scheme while Faridabad has around 1,000 dwelling units.

One of the three entities who have pledged to construct these ARHCs include Ajay Shah of Mitsumi Housing Pvt.  The firm has pledged to construct ARHCs of 1,000 dwelling units as a labour colony in Surat, Gujarat and 900 houses in Ballabgarh, Haryana. It is currently working on a lighthouse project in Agartala.

Sudhakar Reddy of DSR Group, which has experience of government residential and commercial projects, committed to taking 1,000 ARHC units in Bengaluru using state-of-the-art construction technology. They have executed several lower-income group (LIG) and middle-income group (MIG) housing projects in Karnataka.

Priyanka Gupta of Kaushal Bhaav Skill Solution Pvt has promised to construct ARHC with 240 units for workers' housing, spread over 10 acres in Jaipur, using soil block technology for affordable zero carbon homes, the secretary said.

On July 8, the Union Cabinet approved the development of AHRCs for urban migrants or poor as a sub-scheme under the Pradhan Mantri Awas Yojana-Urban. This scheme has been launched under the Pradhan Mantri Awas Yojana Urban (PMAY-U) as part of Atma Nirbhar Bharat Abhiyan.

How it will unfold:

The ARHCs scheme is expected to aid real estate developers retain the labour force on their sites, the minister said, adding that rental housing would also be beneficial for young people.

According to guidelines issued by the housing and urban development ministry, ARHCs will have a two-pronged approach. First, the existing vacant government-funded housing complexes will be converted into ARHCs through concession agreements for 25 years.

The concessionaire will make the complexes liveable through repair and retrofit as well as maintenance of rooms and filling up infrastructure gaps like water, sewer/septage, sanitation, roads. States/Union Territories will select concessionaire through transparent bidding. Complexes will revert to urban local bodies (ULB) after 25 years to restart the next cycle like earlier or run on their own, the ministry said.

Second, special incentives like use permission, 50 percent additional FAR/FSI, concessional loan at priority sector lending rate, tax reliefs at par with affordable housing will be offered to private/public entities to develop ARHCs on their own available vacant land for 25 years.

Who can benefit under this scheme?

Beneficiaries could be labour, urban poor such as street vendors, market or trade associations, industrial workers, manufacturing units, long term tourists, visitors, hospitality sector, students, educational or health institutions.

On foreign direct investments

With regard to foreign direct investment (FDI) in affordable rental housing projects, Mishra said FDI would definitely be encouraged. “FDI is allowed for affordable housing and should be encouraged for rental housing. We are working on getting affordable rental housing listed in the harmonised list of infrastructure so that they are able to receive loans at a lower rate,” he told reporters.

“All facilities provided for affordable housing will also be provided for rental housing. We are pursuing this with the Ministry of Finance rigorously,” Mishra said.



First Published on Aug 4, 2020 09:07 pm