But there are several issues, related to affordable housing in Patna other than government. Take land itself, for instance. It is not easily available and the records are not properly maintained. This makes acquiring land a time-consuming, cumbersome and expensive process. The computerization of land records in the state of Bihar is a welcome step, no doubt. With high population density, which is growing due to rapid urbanization, there is a huge demand for land in Patna. The real shortage has been further exacerbated artificially by poorly conceived state and municipal regulations. As a result, land prices in Patna are higher than intrinsic levels that can support mass real estate developments in Patna.
Other than land there is the protracted process of obtaining a host of state government approvals from multiple agencies before construction can begin on any residential or commercial project in Patna. Sometimes this can take as long as 18 to 24 months. This inordinate delay adds to the cost and can make the project unviable. Our state government needs to felicitate a single-window clearance for the affordable housing segment in Patna. The laws of the land are really drafted to encourage the construction of Rs. 1 crore villas or Rs. 80 lakhs apartments and they positively discourage homes that cost Rs. 10 lakhs to Rs. 20 lakhs.
Inadequate infrastructure is another challenge for affordable housing in Patna. As mentioned earlier, to keep costs down, developers typically must buy land in peri-urban locations of Patna. But roads and the public transportation system in these areas are often not adequately developed, which make the developments unattractive to lower-income citizens who depend largely on public transportation to get around, mainly to their work places. In some cases, the developer in Patna also needs to offer the last mile connectivity for basic amenities like power and water, adding more costs and making housing unaffordable below Rs 20 Lakhs in Patna.
Land should also come with physical infrastructure, such as access to public transport, sewage treatment lines, and water and power supplies. Without these, no project would be saleable. Are urban development ministry and other agencies in Patna working on it? It’s doubtful. Right now, we don’t have enough serviced land around Patna for affordable housing to pick up. The increase in cost of construction also impacts this segment the most. According to real estate industry estimates, construction costs account for more than 50% of the total price of affordable units, while in the case of luxury and larger projects it is only around 20%.
At the customer end, obtaining financing is a key constraint for affordable housing in Patna. One main reason for this is that this customer segment is employed largely in the unorganized sector and typically lacks documents that show proof of address, salary and other information that is mandatory to avail of loans from the frontline banks. BuysellrentPatna thinks that 75% of target consumers for affordable housing in Patna have regular income but don’t have the required documents. BuysellrentPatna feels that Housing finance organizations need to take a fundamentally different approach. They need to assess the customers through field verifications in Patna belonging to this segment and not the documents.