Impact of the regulatory framework on the supply of the affordable housing in Indian cities: evidence from Pune

Abstract

The supply of affordable housing (AH) is influenced by the existing regulatory framework. Planning regulations often impose costs on the housing, decreasing its affordability to the majority of the populace, particularly in developing country like India. As AH shortage continues to grow, there exists a greater need to investigate the impact of various regulations on its supply. Regulatory framework includes the urban land development regulations (land use distribution, zoning, land subdivision, etc.) and the building and site planning regulations (FSI, ground coverage, height restrictions, minimum parking and open space stipulations, etc.). These act collectively impacting the optimum use of the urban land, leading to the consequences on the AH supply. Pursuing the literature, the study examines, classifies, and eventually synthesize the learnings offered by them. The study develops a research methodology of spatial multi-level analysis and demonstrates its application. Within this outline, the study analyses the macro (city level), meso (neighborhood level) and micro (project design level) impacts of the regulatory framework on the supply of AH, in Pune city and subsequently suggest recommendations for improving the AH supply in the city, in the same structured manner. The macro investigations reveal the inadequacy of public AH supply modes and the regulatory hindrances which discourage the private suppliers in AH market to contribute within the PMC limits. The restrictive regime of density allocations creates artificial scarcity of land supply, rising the urban land prices which forces AH suppliers (private) to move outside the PMC limits. This contributes to urban sprawl increasing the overall welfare cost. The fallacy of the system is revealed once again, when the provision of land supply (AH) and its requirement in the city are critically scrutinized. The net scenario for the provision of the serviced land parcels for AH supply indicates the possible relocation of the AH beneficiaries, adding to their welfare cost. The meso investigations reveal the design inefficiencies in the planning of the neighborhood layout, and the better performance of organized residential supply in utilizing permissible FSI. The study also demonstrates the collective impact of multiple regulations impeding the complete consumption of permissible FSI. The analysis at the micro level (AH project – Wanowri), entails alternative scenario generation and performing comparative analysis for investigating the regulatory constraints to the AH supply in te city, and suggest recommendation. for its revision. The study reveals the existence of the possibility to increase the AH supply by 67.83% and reducing the AH dwelling cost by 25.60%, if the regulations are appropriately modified. In the mesolevel recommendations, the study suggest employing better practices for achieving ‘high value – low cost’ solution for land development schemes, and modifications in the regulatory practices which allows for complete consumption of FSI. At the macro-level the study suggests addressing the upgradation of city’s infrastructure and allocating AH supply based upon the capacity of infrastructure, enabling more intense development for AH projects. The study further suggests adopting differential FSI zonings, and modifications in the regulatory framework to encourage contributions from the private AH suppliers. Finally, the study concludes by suggesting critical evaluation of the density allocation processes in the master plan preparation and offers the methodology of spatial analysis it demonstrated. The study contributes on the theoretical front, on an empirical database front and finally comes up with the suggestions in order to revise the regulatory framework. On the theoretical front, the study develops the methodological framework (multi-level spatial analysis framework) to examine the effects of regulations on the supply of AH. The study by providing empirical evidence from Pune, attempts to contribute to the existing body of academic literature in this area. The final output identifies the regulatory constraints relating to the AH supply in Pune city and makes suggestions towards their revision, in order to improve the AH supply in Pune. The study recommends application of the methodology to other Indian cities facing similar regulatory constraints, helping improve the AH supply. The research methodology finds and suggest wider application and the study aspires to strengthen the capacities of ULBs, DAs and other agencies engaged in spatial planning. Finally, it is suggested that the regulatory framework must be critically scrutinized for their appropriateness in the local contexts of individual cities. The empirical evidence provided by such studies, aspire to be instrumental in paving way for the larger planning and regulatory reforms, creating enabling environment for an increased AH supply in our cities.