New Delhi: India face a lack of 9.4 million urban affordable housing – a difference that can reach 30 million units by 2030 until immediate improvements are made, a new report by the National Real Estate Development Council (Nadco) and Real Estate Consultancy Night Frank India released on Friday.
Report- India Affordable Housing: Difying urban housing deficit through supply-side reforms said that the major government’s schemes such as Pradhan Mantri Awas Yojana, supply have declined rapidly. Price of cheap houses below In 5 million in 2018, 52.4% was responsible for the new launch, which decreased by 17% in the top eight cities in 2025.
The report said, “The EMI-to-in-IN-INCUmer ratio for the economically weaker section (EWS) houses has risen from 43% to 60% in 2025, while it has increased from 28% to 40% for medium-or-Iteen houses,” The report states that rising home prices and fluctuations are squeezing buyers with low-income buyers.
The report also flagged high land costs, weak private equity participation, insufficient urban infrastructure, and cumbersome approval procedures as the biggest obstacles to increase supply. The report stated that between 2011 and 2024, affordable housing attracted only $ 1.9 billion in private equity flows, less than 8% of the total investment in the residential area, reported in the report.
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“Affordable housing is not only a social priority, but also an economic requirement. As India rapidly urbanization, the imbalance between supply and demand in this segment creates significant risk for inclusive growth. While the support of the policy on the demand side is commendable, the need to address the obstacles of the supply-side.
The report recommended solutions such as rebuilding the vacant government/public sector undertaking (PSU) land for large -scale housing, expanding free floor space index (FSI), providing subsidized construction finance and strengthening developers. It also asked the builders to expand the affordable housing funds directly to channels a low -cost credit to attract institutional investment.
“As of our assessment, increasing the base or free FSI by 50%, the supply will increase 50% and reduce the overall cost of construction of a housing by 24%,” the report said.
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Speaking in a panel discussion after the report launch, Kuldeep Narayan, Joint Secretary, Ministry of Housing and Urban Affairs, said that ignoring FSI was not a solution to a silver pill for an affordable housing shortage. Instead, state-level criteria that give developers mandate to create affordable housing beyond a particular size, which do better work on the site or in the vicinity of such projects.
“The shelter fee component under such criteria, which the developer has to pay not to construct affordable housing, is an important factor. For me, there is a good shelter fee when 40% of the builders construct affordable housing and pay 60% shelter fee,” Narayan said.
He said, “Another model may be the transferable development rights (TDR) for affordable housing. This opportunity is often cost and not the actual cost of construction of affordable housing that becomes a barrier,” he said.
