Decent affordable housing is fundamental to health and well-being of people and to smooth the functioning of economics. Yet in India and around the world, in developing and advanced economics alike, cities are struggling to meet that need.
A blueprint for addressing the global affordable housing challenge by McKinsey Global Institute (MGI), defines the affordability gap as the difference between the cost of an acceptable standard housing unit (which varies with location) and what households can afford to pay using no more than 30% of their income.
However, four approaches used in concert can help reduce the cost of affordable housing by 20-50% and substantially narrow the affordability gap. These are largely market oriented solutions- lowering cost of land, constructions, operations and maintenance and financing- could make housing affordable for median earning households. [Read more…]