Streamlining the Affordable

Housing Eco-systemDRAFT FRAMEWORK FOR BEST PRACTICES & RATING SYSTEM

Shop talk

2

DBS Communities

3

• 2 Projects launched

o Umang Lambha (792 units) – 100%

booked

o Umang Narol (810) – 86% bookings

• Moraiya (400 homes) & Kudasan (600 homes),

Narol expansion – phase 3 & 4 (2000 homes),

Surat (1200 homes) being considered

www.dbscommunities.com

Griha Pravesh – empowering buyers

• Griha Pravesh equips potential buyers to make the right choices

& hand-holds them through the process of buying a house

4

ASHRAM

• The Academy for Sustainable Habitat Research and Management

(ASHRAM) intends to work with practioners of affordable housing to

add value, build relationships and disseminate knowledge in the

affordable housing space.

• ASHRAM’s activities include Research & Development, Training,

Advocacy, Interaction platforms, etc.

55

6

Setting the Context

7

Affordable Housing - A Composite

8

Supply Side

Production of right sized and right priced housing

Affordable housing finance

Demand Side

Customer facilitation

• For upward socio-economic mobility

• Preparedness for home ownership

Demand aggregation

Affordable Housing Space in India - Developers

• 30 developers in 12 cities

• A housing stock of about 25,000 to 50,000 units to enter the market

9

SOURCE: MONITOR GROUP’S STUDY

Affordable Housing Space in India - HFIs

10

SOURCE: MONITOR GROUP’S STUDY

Demand Aggregation/Facilitation

11

Discourse & debate still

very primitive

Objectives of Best Practices & Rating System

Encourage more DEVELOPERS, HOUSING FINANCE INSTITUTIONS and CBOs to

• Enter into the space of affordable housing provision & facilitation

• Work in partnership

Ensure home buyers get a fair deal

Strengthen quality of process and products both on supply side and demand side

12

Standards or Certification or Rating ???

Standards

• Highly prescriptive & control oriented

Certification

• Puts a few on a pedestal & excludes the rest

Rating

• Flexible and open to innovation

• Every one is included

13

…. a rule or principle

that is used as a basis

for judgment

… the act of certifying

or state of being

certified

… classification

according to grade or

rank

Best Practices to Rating System

14

• Overall objectives

• Structure of Best Practices

• Structure of Rating System

Preparation of Framework

• Sector wise documentation

• Web based

• Open source contribution, etc.

Documentation of International Best

practices

• Norms

• Forms and formats

• Operations strategy

• Strategic tie-ups

Rating System

Rating for whom?

Developer

HFC

CBO

Affordable Housing Project

15

What’s in it for them?Developers

Stamp duty relaxation

Fast approvals

Service tax??

?

HFC

Better terms & rates for refinancing

Better terms for Provisional

Rates for recovery

?

CBO

Access to philanthropic

funding

?

?

16

Who will use the rating?

RATING SYSTEM

Government

Donor/ funding agencies

Impact investors

Developers

HFC

CBO

17

Characteristics of the System

Prescriptive or Output

based

Quality driven or balanced

Objective assessment

or subjective assessment

Absolutely required or desirable

18

At what point in time?

Project development/ APF

Booking & sales/ loan

process

Construction/ Loan

disbursement

Handing over

Post occupancy

19

Pitfalls• Adapting existing systems like LEED will lead to complexity

• New constraints

• Opportunities for arbitrage

• Sabotage by vested interests

• ?

• ?

• ?

20

Draft Sector-specific

Framework

21

Pre-qualification criteria• Secondary Factors

o Marketing & sales strategy

o Maintenance strategy

o Customer facilitation

offerings

o Financial health??

o Track record??

• ??

• ??

22

• Primary Factors

o Urban

o Dwelling Unit size up to 550

sq ft carpet area???

o Price per unit up to `. 10

lakhs???

o MoU between 3 Key

stakeholders – developer,

HFC, CBO

o Project specific SPV

Construction• Mechanical, electrical,

plumbing

• Construction technology &

Structural design

• Specifications

• Construction/project

management

23

• Site Characteristics

• Status of approvals

• Master planning

• Site and Services

• Design – typology, units,

clusters, common spaces,

community areas

Energy & Environment• Planning for site services

such as

o Water supply – rain water,

fresh water

o Waste water

o Solid waste

• To evaluate

o health & safety

o Reduce, reuse & recycle

24

• Construction technology &

embedded energy

• Energy requirements – unit,

building, campus

o Lighting & ventilation

o Mechanical, electrical,

plumbing

Housing Finance • Debt consolidation

• No double counting of

customers/cannibalism

25

• Informal vs formal sector

lending

• Rates

• LTV

• Exposure

• Margin money terms

Community Interaction/Customer

facilitation• Post-occupancy services

• Services wrt upward

mobility

o Livelihood

o Health

o Education

o Access to credit

26

• Information/ disclosure

• Facilitation with loans,

margin money

• Problem resolution

Cost to customer

27

One time cost

Recurring costs

Format for Deliberation

28

Step 1

• What are the goals and objectives of the rating system?

o Overarching

o Sector specific

• Enhance supply in market driven solutions in the affordable

housing space

• Ensure value for customer

• Strengthen process & outputs

29

Step 2• What are the key parameters that must be evaluated?

o Site characteristics

o Loan terms

o Customer facilitation

• What ‘verifiable indicators’ will help measure these

parameters?

o Loan terms – interest, tenure, LTV, margin money, etc.

o Site characteristics – access to public transport, access to health and

education facilities, etc.

30

Step 3

31

Objectives/Parameters

for evaluation Indicators Objective 1 Objective 2 Objective 3 Objective 4

Parameter 1

1.1. xxxxx

1.2 xxxx

1.3 xxxx

Parameter 2

2.1 xxxxx

2.2 xxxx

2.3 xxxx

Parameter 3

3.1. xxxxx

3.2 xxxx

3.3 xxxx

DESIRABLE CRITICAL

32