New Public Private Partnership (PPP) for Affordable Housing

Central Government has announced new Public Private Partnership (PPP) to achieve Housing for All by 2022. The new PPP policy allows extending central assistance of up to Rs.2.50 lakh per each house to be built by private builders even on private lands.

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New Public Private Partnership (PPP) for Affordable Housing

Central Government has announced new Public Private Partnership (PPP) to achieve Housing for All by 2022. The new PPP policy allows extending central assistance of up to Rs.2.50 lakh per each house to be built by private builders even on private lands.

Under this policy announced by Minister of Housing & Urban Affairs, eight PPP (Public Private Partnership) models have been provided for private sector to invest in affordable housing segment. It has also opened potential for private investments in affordable housing projects on government lands in urban areas.

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This policy seeks to assign risks among the government, developers and financial institutions, to those who can manage them the best besides leveraging under-utilized and unutilized private and public lands towards meeting the target of Housing for All.

The two PPP models for private investments in affordable housing on private lands include extending central assistance of about Rs 2.50 lakh per each house as interest subsidy on bank loans as upfront payment under the Credit Linked Subsidy Scheme (CLSS) component of Pradhan Mantri Awas yojana (Urban).

Under the second option, central assistance of Rs 1.50 lakh per each house to be built on private lands would be provided, in case the beneficiaries do not intend to take bank loans.

Other six models for promoting affordable housing with private investments using government lands have been evolved after extensive consultations with States, promoter bodies and other stakeholders.

Six models using government lands are:

  • DBT Model: Under this option, private builders can design, build and transfer houses built on government lands to public authorities.
  • Mixed- Development Cross –subsidized Housing: Government land to be allotted based on number of affordable houses to be built on the plot offered to private builders.
  • Annuity-Based Subsidized Housing: Builders will invest against deferred annuity payments by the Government.
  • Annuity-cum-Capital Grant Based Affordable Housing: Besides annuity payments, builders could be paid a share of project cost as upfront payment.
  • Direct Relationship Ownership Housing: As against government mediated payments to builders and transfer of houses to beneficiaries in the above four models, under this option, promoters will directly deal with buyers and recover costs.
  • Direct Relationship Rental Housing: Recovery of the costs by builders is through rental incomes from the houses built on government lands.

Source Link- http://realty.economictimes.indiatimes.com/news/regulatory/govt-announces-new-ppp-policy-for-private-investments-in-affordable-housing/60777680

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