Centre announces new PPP Policy to promote private investments in affordable housing

New Delhi, September 22: A new era of growth in real estate sector has been targeted.The Central government has announced a new public-private partnership (PPP) policy on Thursday for affordable housing that allows extending central assistance of up to Rs.2.50 lakh per each house to be built by private builders even on private lands. Besides, it will also open up the immense potential for private investments in affordable housing projects on government lands in urban areas.

Minister of Housing and Urban Affairs Hardeep Singh Puri announced the policy. He was addressing the 'Real Estate & Infrastructure Investors Summit-2017' organized by real estate body NAREDCOn here.

The six models using government lands are:

1. DBT Model: Under this option, private builders can design, build and transfer houses built on government lands to public authorities. Government land is to be allocated based on the least cost of construction. Payments to builders will be made by the public authority based on the progress of the project as per agreed upon milestones and buyers will pay to the Government.

2. Mixed Development Cross –subsidized Housing: Government land to be allotted based on a number of affordable houses to be built on the plot offered to private builders, cross-subsidizing this segment from revenues from high-end house building or commercial development.

3. Annuity Based Subsidized Housing: Builders will invest against deferred annuity payments by the Government. Land allocation to builders is based on the unit cost of construction.

4. Annuity-cum-Capital Grant Based Affordable Housing: Besides annuity payments, builders could be paid a share of the project cost as an upfront payment.

5. 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. Allocation of public land is based on the unit cost of construction.

6. Direct Relationship Rental Housing: Recovery of the costs by builders is through rental income from the houses built on government lands.