Housing is considered as one of the basic human needs. According to the Government of India, the total housing requirement during the 11th Plan period would be 26.53 million dwelling units. Further 99% of this shortage pertains to Economically Weaker Sections (EWS) and Lower Income Groups (LIG). Inspite of the necessary steps taken by the central, state and local governments, there exists a large gap between the demand and supply of houses. If suitable measures are not taken, this gap will again increase and further aggravate the urban housing shortage problem. The growing urban housing shortage is mainly because of the exponential growth of population, fast rate of urbanization and inadequate addition to the existing housing stock. At present, India needs to build many million homes at the right location with affordable prices and adequate quality, especially for EWS and LIG class of people. This paper mainly discusses the background of urban housing shortage in India and the necessary steps needed to reduce the urban housing shortage.

Housing is one of the basic human needs along with food, clothing and education. After independence India has seen a tremendous increase in urban population. According to the report of Mckinsey Global Institute (Shirish et al., 2010), India’s urban population grew from 290 million reported in 2001 census to an estimated 340 million in 2008, and MGI projects that it could soar further to 590 million by 2030. The demand for housing increases due to rapid growth of population. Like other developing countries, India too is presently passing through a phase of acute housing shortage. About 15.2% of India’s urban population lives in slums. The urban housing shortage in March 2007 was around 24.71 million and is estimated to increase by 26.5 million by 2012. Further, 99% of this shortage pertains to the Economically Weaker Sections (EWS) and Lower Income Groups (LIG) (Singh, 2010). Housing shortage is mainly due to the exponential growth of population, rapid urbanization and inadequate addition to the existing housing stock. Today in India, providing an affordable and socio-culturally acceptable housing continues to be a serious challenge to the central and state governments, builders, contractors, real estate developers, etc. The Government of India is taking various measures to reduce housing shortage by implementing various schemes like the Jawaharlal Nehru National Urban Renewal Mission (JNNURM), Valmiki Ambedkar Awas Yojana (VAMBAY), Two Million Housing Program (2 MHP), etc. But looking at the shortage of houses as mentioned above, an early solution to housing shortage is impossible. This paper analyzes urban housing shortage and supply system, identifies the need for affordable housing, and also attempts to determine the possible challenges the house providers will face to provide affordable housing.

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