India’s urban affordable housing shortage could reach 30 million units by 2030: Report

NEw new delhi: bharat faces an urban affordable living accommodations shortage of 9.4 gazillion—a breach that could swell to 30 million units by 2030 unless urgent reforms are undertaken, a new report by the National Real Estate Development Council (NAREDCO) and real estate consultancy Knight Frank India released on Friday said.The report—India Affordable Housing: Tackling Urban Housing Deficit Through Supply-Side Reforms—said that despite flagship government schemes such as the Pradhan Mantri Awas Yojana, supply has sharply declined. Affordable homes priced below ₹5 million accounted for 52.4% of new launches in 2018, which decreased to 17% in 2025 across the top eight cities.“The EMI-to-income ratio for Economically Weaker Section (EWS) households has climbed from 43% in 2020 to 60% in 2025, while for middle-income households it rose from 28% to 40%,” the report said, adding that rising house prices and fluctuating lending rates are squeezing low-income buyers out of the market.The report also flagged high land costs, weak private equity participation, inadequate urban infrastructure, and cumbersome approval processes as the biggest barriers to scaling up supply. Between 2011 and 2024, affordable housing attracted only $1.9 billion in private equity inflows, less than 8% of total investment in the residential sector, the report said.Also Read: Gurugram’s affordable housing projects face residents’ ire as missing 24-metre road becomes symbol of deeper crisis“Affordable housing is not only a social priority but also an economic necessity. As India urbanises rapidly, the imbalance between supply and demand in this segment poses significant risks to inclusive growth. While policy support on the demand side has been commendable, there is a pressing need to address supply-side barriers. Encouraging private sector participation through innovative financing, faster approvals, and land availability will be critical to bridging the gap and ensuring that every Indian has access to dignified housing,” chairman and managing director of Knight Frank India Shishir Baijal said.The report recommended solutions like repurposing vacant government/Public Sector Undertaking (PSU) land for mass housing, expanding free floor space index (FSI), providing subsidised construction finance, and offering stronger tax incentives to developers. It also called for expanding the affordable housing fund to channel low-cost credit directly to builders to attract institutional investment.“As per our assessment, increasing the base or the free FSI by 50% would raise the supply by 50% and reduce the overall cost of construction of a dwelling by 24%,” the report said.Also Read: Delhi Development Authority’s ageing complexes: Homes crumbling under weight of dreamsSpeaking at a panel discussion after the report launch, joint secretary of ministry of housing and urban affairs (MoHUA) Kuldeep Narayan said that uncapping the FSI was not a silver bullet solution to the affordable housing shortage. Instead, state-level norms that mandate developers to build affordable housing beyond a particular size of projects on-site or within the vicinity of such projects work better.“The shelter fee component under such norms, which the developer has to pay for not building affordable housing, is the key factor. For me, a good shelter fee is when 40% of the builders construct affordable housing and 60% give shelter fee,” Narayan said.“Another model could be transferable development rights (TDR) for affordable housing. Often it is the opportunity cost and not the actual cost of building affordable housing that becomes a constraint,” he added.