Saturday, February 13, 2010


We visited the Andhra Pradesh Housing Board ("APHB") last week in Hyderabad / Kukatpally after it announced the allotment of 1046 flats to the LIG segment - for more info on the project, see

As discussed in earlier posts, the biggest developer for EWS /LIG segments is the state (mainly through municipal corporations and housing boards) and in general, flats built by the state not only are good value (since there is an element of subsidy) but also generates a strong response from actual users. In the case of private developments, there is usually no screening of buyers - both in terms of income or actual users - so often the buyers are investors from higher income segments, not the group in which MHFC is interested.

Coming back to the APHB, we visited the site at Kukatpally which was very central and seemed prima facie attractive (right next to the site was a private development coming up at a rate / sq ft approx double that of the state project). We also met with officials and inferred from discussions that there were several allottees who were finding it difficult to raise financing for precisely the reason that MHFC exists - because the allottees lacked documentation and could not qualify for loans from mainstream banks. We hope to help these allottees and also help buyers on other housing board projects coming up in other cities and towns in Andhra Pradesh (over 5,000 "Siddhi" flats for the urban lower income segments to be offered in 2010). We felt that if we spread the word (that there is an institution like MHFC to support the informal sector) early, then the response to the state projects, while already strong, might be enhanced as more from the informal sector would come forward and apply for an affordable home.

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