HDFC Chairman Calls for Affordable Housing

HDFC chairman Deepak Parekh urged the nation’s mortgage lenders to make housing affordable and available in urban areas to help tackle the issue of urbanisation in our country. He said that India has always under invested in cities and more particularly in transport networks and affordable housing.

In the chairman’s statement of HDFC’s annual report for 2009-10, he said that though cities are centres of innovation, ideas, knowledge and wealth creation, all cities are strained by lack of physical infrastructure in India. He reminded that 28% of India’s population or 300 million people live in urban areas. He highlighted a recent study by McKinsey Global Institute, which estimated that 70% of new jobs and 85% of India’s total tax revenue will emanate from cities by 2030.

Focusing more on building globally-competitive cities, he said “citizens have to be passionate about the cities they live in. This can be inculcated only if there is a sense of ownership of public goods and civic pride.” He said that urban transformation requires bold initiatives and mentioned that china is the most significant example of city transformation in the recent times.

Talking about building living communities, he said “how can one envisage building globally-competitive cities when progressively a large segment of society keeps getting priced out of the housing market? The term ‘affordable housing’ gets wielded so effortlessly, but it continues to be a misnomer.” He also stated that real estate prices had corrected to realistic levels for short period of time but they rose again sharply as soon as the economic conditions improved.

Referring to large-scale urban influx, he said that there is a need to build infrastructure in terms of housing, connectivity and mobility of masses to tackle the issue. According to him, there is a need to quickly create at least two dozen satellite cities around tier-I and -II cities in India. He also said that “No Indian city today has a 20-year visionary transportation plan and there is an acute shortage of professionals at the urban governance level.”

Click here for full version of the HDFC chairman Deepak Parekh’s statement from HDFC’s annual report 2009-10.

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