Urban Housing Crisis in India

Urban Housing Crisis in India


This article covers “Daily Current Affairs” and the topic details “ Urban Housing Crisis in India”. This topic has relevance in the Economy section of the UPSC CSE exam.

GS 3: Economy

Why in the news?

As per data from the Ministry of Housing and Urban Affairs, there is a deficit of suitable housing for approximately 19 million households in urban areas. Consequently, this housing shortage has resulted in a slum population of 65.5 million individuals residing in 13.7 million slum households within million-plus cities.

Factors Contributing to the Urban Housing Crisis in India

The urban housing crisis in India stems from a substantial disparity between the demand for housing in cities and the availability of suitable options, both in terms of quantity and quality.

  • High Population Density: The significant migration from rural areas to million-plus cities has resulted in a severe shortage of housing space due to the escalating population density.
  • Sub-Optimal Utilization of Urban Land: Urban land is often not utilized to its full potential due to fragmented and poorly recorded ownership, with multiple public sector organizations holding land under their jurisdictions. Additionally, restrictions on Floor Space Index/Floor Area Ratio artificially limit land availability, thereby driving up prices.
  • Rent Control Regime: Stringent rental laws, which reduce returns on rental properties and make tenant eviction challenging, have discouraged new investments in rental housing. This stagnation in investment has contributed to a shortage of affordable housing in urban areas.
  • Inadequate Housing Finance: Insufficient housing credit for Low-Income Groups (LIG) is a result of their weak creditworthiness and low disposable incomes. The informal nature of employment in the urbanizing Indian landscape has failed to provide social security or formal credit to the growing urban population, exacerbating the housing crisis.


The challenges associated with the housing crisis in India are multifaceted, impacting individuals, communities, and the overall well-being of cities.

  • Shortage of Affordable Housing:
      • The demand-supply gap for affordable housing is substantial, with a reported deficit of about 19 million units in Indian cities, primarily affecting low-income groups.
      • Rising construction costs and a lack of a viable rental market contribute to the unaffordability of housing, especially for lower-income individuals who struggle to access cheaper loans and formal lending options.
  • Pressure on Urban Resources due to Rapid Urbanization:
      • The rapid urbanization and migration from rural areas strain urban resources, leading to a scarcity of basic amenities such as water supply, sewage, and electricity in many housing projects.
      • Homelessness and inadequate housing further burden public services, impacting healthcare, infrastructure, and escalating environmental degradation issues such as urban heat islands, pollution, drainage problems, and water crises.
  • Slum Proliferation and Informal Settlements:
      • The lack of affordable formal housing results in many migrants living in slums and informal settlements, leading to social, health, and economic challenges.
      • Homelessness creates difficulties in finding employment, accessing healthcare, and maintaining social connections, with a significant population living without stable shelter.
  • Gentrification and Displacement:
      • Gentrification, driven by wealthier residents moving into low-income neighborhoods, raises property values and rents, displacing long-term residents and eroding community cohesion and cultural diversity.
  • Housing Insecurity and Stress:
      • The lack of stable and affordable housing induces stress and uncertainty, negatively affecting mental and physical health, as well as overall quality of life for individuals and families.
      • Housing insecurity contributes to urban crimes, including human trafficking, sexual assault, child labor, juvenile delinquency, prostitution, drugs, and suicides.
  • Growth of Unplanned Suburbs:
      • Deteriorating urban environments prompt out-migration towards nearby rural areas, leading to unplanned settlements and problematic future expansion plans that permanently alter the rural landscape.

Government Initiatives to Address the Urban Housing Challenge in India:

The government has implemented several initiatives to address the housing crisis in India, with a focus on providing affordable housing and improving living conditions. Some key steps include:

  • Pradhan Mantri Awas Yojana (Housing for All – Urban):
      • Objective: Addressing urban housing shortages for Economically Weaker Sections (EWS), Low-Income Groups (LIG), and Middle-Income Groups (MIG).
      • Beneficiaries: EWS, LIGs, and MIGs with annual income caps of up to Rs 3 lakh for EWS, Rs 3-6 lakh for LIG, and Rs 6-18 lakhs for MIG.
  • Jawaharlal Nehru National Urban Renewal Mission (JNNURM):
      • Objective: Providing financial assistance to urban local bodies for infrastructure and service development.
      • Implementation: Launched in 2005, the mission focuses on comprehensive urban development.
  • National Urban Housing and Habitat Policy (2007):
      • Objective: Providing affordable housing and enhancing living conditions for urban residents, especially for low-income groups.
  • Atal Mission for Rejuvenation and Urban Transformation (AMRUT):
      • Objective: Improving basic services and infrastructure in urban areas, including water supply and sewerage systems.
      • Implementation: Launched in 2015, it aims at holistic urban development.
  • Deendayal Antyodaya Yojana – National Urban Livelihoods Mission (DAY-NULM):
      • Objective: Reducing poverty and vulnerability of urban poor households by offering opportunities for skill development and self-employment.
      • Implementation: Launched in 2013, it focuses on empowering the urban poor through livelihood support.

Measures to be Taken:

To effectively address the challenges associated with urban housing in India, a comprehensive approach is essential. Here are suggested steps with examples:

  • Robust Rural Development:
      • Strategy: Improve employment opportunities, amenities, and living standards in rural areas to reduce mass migration to cities.
      • Example: Create multiple growth centers across the country, strategically positioned to distribute economic activities more evenly, reducing pressure on megacities.
  • Enhance Urban Planning and Governance:
      • Strategy: Strengthen urban planning to keep pace with rapid urbanization, update master plans, invest in infrastructure, and enforce land use regulations.
      • Example: Implement single-window clearance systems for housing projects to reduce bureaucratic delays, as seen in ease of doing business reforms in Gujarat.
  • Promote Public-Private Partnerships (PPPs):
      • Strategy: Encourage collaboration between the government and private developers to create affordable housing.
      • Example: Offer incentives like tax benefits or provide land at subsidized rates to make projects financially viable for private developers.
  • Revise Rent Control Laws:
      • Strategy: Modernize rent control legislation to protect both landlords and tenants, encouraging landlords to rent out vacant houses.
      • Example: Maharashtra’s Rental Housing Scheme aims to stimulate the rental market through amendments to rent control.
  • Encourage Use of Innovative Building Technologies:
      • Strategy: Promote cost-effective and sustainable construction methods, such as prefabricated buildings, to reduce construction costs and time.
      • Example: Use precast technology in mass housing projects for efficient construction.
  • Expand the Scope of Affordable Housing Programs:
      • Strategy: Broaden programs like Pradhan Mantri Awas Yojana (PMAY) to cover not only house construction but also the development of surrounding infrastructure.
      • Example: Ensure holistic development to create sustainable and inclusive urban areas.
  • Incorporate Inclusionary Zoning:
      • Strategy: Mandate a percentage of new developments for affordable housing.
      • Example: New York City’s Mandatory Inclusionary Housing program requires developers to include affordable housing in rezoned areas.

By implementing these steps, India can progress toward providing affordable, sustainable, and inclusive urban housing, aligning with the United Nations’ Sustainable Development Goals. This holistic approach contributes to making cities inclusive, safe, resilient, and sustainable, while also addressing poverty eradication and reducing inequalities for a better future.

Download plutus ias current affairs eng med 28th Dec 2023

Q.1 Consider the following statements:

  1. Pradhan Mantri Awas Yojana (Urban) addresses housing shortages of only Economically Weaker Sections.
  2. JNNURM, launched in 2005, provides financial aid to urban local bodies for comprehensive infrastructure development.
  3. National Urban Housing and Habitat Policy (2007) aims to offer affordable housing and enhance living conditions for urban residents, especially the low-income groups.

How many of the above statement/s is/are correct?

(a) Only one

(b) Only two

(c) All three

(d) None


Q.2 Discuss the role of urban housing policies in achieving sustainable development in India. Highlight the challenges associated with the urban housing crisis and evaluate the effectiveness of government initiatives, such as Pradhan Mantri Awas Yojana, in promoting sustainable and inclusive urban development. 

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