NAPHDA’s business concept is based on Public Private Partnership model, offering incentives to Private Sector investors in participatory mode
Government’s noble intent of providing housing to the underserved at affordable price can only be realized by adopting all possible measures to limit / cap the price of houses for low / medium income members.
This will be achieved, on one hand, through economical design specifications with optimal use of covered area and controlled construction cost, while on the other hand, a significant cross-subsidy will constitute an essential feature of the financial model.
The cross-subsidy will be planned in urban / peri-urban areas for the low-income group. For the medium income group, the houses will be allotted on cost basis, without any profit. The model of cross-subsidy cannot be created in rural areas and housing units there will have to be allotted on cost basis which will, however, be significantly less than urban centres / peri-urban areas.
NAPHDA will have the overarching role of a Partner and Client. Besides provision of developed land for most projects, it will also oversee the design of the low / medium cost houses and ensure the quality of construction.
This business model has been conceived as under:
Land: In most cases, procurement, town planning and infrastructure development of land will be the responsibility of NAPHDA. It will acquire land commercially and also seek allotment of Government lands, where possible. In some cases, land offered as donation and / or equity in a Joint Venture may also be used.
Land Use in Urban / Peri-Urban Housing Colonies: The land use plan of housing colonies will comply with established standards of infrastructure / town planning for housing schemes. Substantial area will be reserved for construction of housing units for low and medium income members. An appropriate percentage of land will be apportioned to the high-end housing units, about 5% to commercial areas and 2-5% to amenities.
Design of Residential Apartments in Urban / Peri-Urban Areas: NAPHDA will provide the design of low and medium cost apartments. However, the design and architecture of high-end apartment buildings will be decided in consultation with the respective investor, to whom assigned. Nevertheless, the limits of covered area laid down by NAPHDA will be followed.
There may be some variations in the abovementioned business, e.g. construction and handing over of low-cost houses as a Corporate Social Responsibility by corporate entities or provision of developed / un-developed land by some investor as equity. Such proposals will be duly considered as per the feasibility and financial model of respective project.