Measuring Housing Affordability Using Residual Income Method for Million-plus Cities in India

Abstract

Housing affordability is an ever-growing concern in rapidly urbanizing countries like India. The need for affordable housing can hardly be overemphasis in India. Government has many policies and programs running for fulfilling the requirement. But it is essential to define affordability standards for the success of any such policies and programs. The Ratio Method, which is currently used as the base for determining affordable housing, doesn’t have the flexibility to match the varied scale and standards across Indian cities. This paper is based on Michel E stone’s residual income’ method to measure housing affordability for India’s million-plus city. It gives a new approach for measuring housing affordability based on the minimum living cost for survival. It uses Poverty Line data (2014) and NSSO economic survey data (2012) for defining the minimum standard of living in the city. Stakeholders can use the city-specific measurement for affordable housing generated from this paper in affordable housing policies and programs.