Affordable housing has become one of the biggest challenges in India today. Millions of people struggle to buy or rent homes that fit their budget, especially in large cities where the cost of living is high. While there is a growing demand for luxury homes, the need for affordable housing for middle- and low-income families remains a pressing concern.
At the India Today Conclave South 2025, Sanjay Dutt, Managing Director and CEO of Tata Realty & Infrastructure Ltd, shared his insights on how India can make housing more accessible and affordable. His observations covered the main challenges in the real estate sector, the factors driving housing demand, and practical steps that can make affordable housing a reality.
Main Challenges in Affordable Housing
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High Taxes and Expensive Land
One of the biggest hurdles for affordable housing in India is the high cost of taxes and land. According to Sanjay Dutt, nearly 50% of the property cost goes to taxes. On top of that, the cost of land contributes 50% to 85% of the total project cost, especially in major cities.
These high costs make it difficult for developers to build homes at prices that are affordable for middle-class families. Dutt emphasized that reducing taxes and making land cheaper is essential if India wants to build more affordable homes.
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Underutilized Government Land
Many government authorities, such as railway authorities, defense organizations, municipal corporations, and old trusts, own large portions of land in cities. However, a significant part of this land remains unused or poorly maintained.
Sanjay Dutt suggested that the government should unlock and monetize these lands to support affordable housing projects. Making land cheaper and available for private developers could encourage the construction of more homes for middle- and low-income groups.
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Poor Transport and Connectivity
Building affordable homes far from city centers is not always effective. If residents cannot easily commute to work or access basic services, these homes lose their value. Dutt highlighted that road and public transport connectivity is crucial. Affordable housing should be located in areas that are well-connected to workplaces, schools, hospitals, and other essential services.
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What Drives Housing Demand in India
According to Sanjay Dutt, the availability of jobs is the main factor driving the demand for housing. In the past two years, India has absorbed nearly 80 million square feet of commercial space in the top eight cities, with the southern region accounting for about 60% of this demand.
Industries like IT, e-commerce, telecom, banking, financial services, and healthcare are growing rapidly. These sectors require a large workforce, which in turn increases the need for residential spaces close to work. Cities with strong job growth naturally see higher demand for housing.
Dutt also noted that some cities, like Coimbatore, have a high percentage of local workforce. Over 70% of workers in Coimbatore are local, unlike cities where most employees are migrants. This local workforce can benefit directly from affordable housing initiatives in such areas.
Affordability and Market Trends
While incomes in India are steadily rising, housing prices often increase faster than what many people can afford. One reason is speculative investment in real estate. Investors buy properties to lease them at high prices, which raises overall costs and makes homes unaffordable for ordinary buyers.
Dutt warned that such trends are unsustainable. Eventually, the market may face a slowdown or correction, but over time, housing prices tend to rise again.
Another key factor driving up costs is the scarcity of clean and approved land. Developers now spend heavily on acquiring land, getting approvals, and improving infrastructure within projects. Additionally, rising expectations of modern amenities in housing, such as resort-like facilities or better community spaces, further increase the cost.
Solutions to Make Housing More Affordable
Sanjay Dutt offered several practical suggestions for making housing more accessible and affordable in India:
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Faster Government Approvals and Clearances
Delays in approvals for real estate projects increase costs significantly. Dutt suggested that the government should aim to approve projects within three months, including environmental clearances.
He also recommended a “deemed approval” system, where if the government does not respond to an application within a certain period, it is automatically approved. This would reduce bureaucratic delays and lower the cost of construction.
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Use of Modern Construction Techniques
Construction technology can play a major role in reducing costs and speeding up project completion. Techniques like precast construction and other modern methods can cut the project cycle from five years to two and a half years. This means homes can be built faster and sold at more affordable prices.
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Standardized Policies Across States
Countries like Singapore and Dubai are easier to manage for developers because they have standard rules and a single authority. In India, each state has different regulations, making construction and approvals more complex.
Dutt suggested standardizing policies and regulations across states. This could simplify processes for developers and reduce costs, ultimately making housing more affordable for buyers.
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Better Land Management and Monetization
Government-owned land that is unused should be monetized and made available for housing projects. If land costs decrease and private developers get support, more affordable housing projects can be initiated across cities.
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Location and Connectivity
Affordable housing should be planned in areas that are well-connected to workplaces, schools, hospitals, and markets. This ensures that residents can lead a convenient life without facing long commutes or travel difficulties.
Learning from Global Models
Sanjay Dutt noted that countries like Singapore and Dubai have successfully implemented affordable housing policies. While India is larger and more complex, certain strategies can be adapted:
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One-window approvals to reduce bureaucratic delays
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Standardized regulations across different states
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Efficient use of government land for housing
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Incentives for private developers to build affordable homes
While India cannot directly replicate these models due to its size and diversity, learning from them can help create practical solutions for the Indian context.
Conclusion
Affordable housing in India is achievable, but it requires a comprehensive approach. High taxes, expensive land, bureaucratic delays, and poor connectivity are major challenges. At the same time, the growing demand for jobs, rising incomes, and modern lifestyle expectations influence housing prices.
By taking steps such as reducing taxes, unlocking government land, improving transport, speeding up approvals, and using modern construction technologies, India can move closer to providing affordable homes for millions of people.
Sanjay Dutt’s insights show that a combination of government support, private sector participation, and smart planning can make affordable housing a reality. If implemented effectively, these measures can ensure that more people can own or rent homes without financial strain, contributing to a stronger and more inclusive urban India.
