This initiative is tackling homelessness and solving the migrant crisis with affordable housing

The coronavirus pandemic is not just a health crisis, but has also led to a crisis of shelter. Due to the sudden disappearance of jobs, many migrant workers could not afford to pay rent, and decided to leave the cities for their places of origin despite travel restrictions.

According to the Ministry of Labour, 1.06 crore workers migrated from cities, many of them on foot, between March-June 2020.

This has added pressure on state governments to provide shelter to returning migrants – in addition to the 1.77 million people already classified as ‘houseless’ according to the 2011 Census. According to organisations like the Indo-Global Social Service Society, this number is far higher.

For the urban homeless, this crisis was magnified by the fact that there is a lack of both affordable accommodation for the economically weaker sections in cities, and unfeasible rental solutions.

“The migrants coming from states like Uttar Pradesh, Bihar and Jharkhand don’t have proper quality living spaces. They have to share restrooms, don’t have privacy and the sanitation conditions are really bad,” Deepak K Viswanathan, Co-founder of HomeStory Social Housing, tells SocialStory.

Many low-income workers also struggle to find suitable credit line facilities at reasonable interest rates.

“Even though credit has become more accessible, it is still difficult to procure a loan of Rs 8-9 lakh. Without credit support facility, it’s very difficult for them to get the loans from private players in the market, who lend at 2-3 percent,” he adds.

This led him to search for affordable housing solutions.

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Providing affordable housing

After completing his engineering degree in 2012, Deepak launched Merestone Properties Pvt Ltd in Coimbatore, Tamil Nadu and dedicated himself to strengthening the company’s resources and core construction skills. The company has developed over one lakh sq ft of residential spaces till now.

He and Yugendran D soon realised that the new accommodations cropping up in cities were either co-living spaces or PG accommodation catering to white-collar workers. However, there were limited options for blue-collar workers.

“Gig economy workers like the Ola/Uber drivers in metropolises like Chennai, Bengaluru, and Mumbai, who come from other cities, find it very difficult to pay rent,” Deepak says.

In 2018, they started HomeStory initiative, which is on a mission to bring dignified living conditions through affordable housing for people at the bottom of the economic pyramid.

The founders met Naga Praksam, who is a mentor at NSRCEL, IIM Bangalore and Partner at Acumen fund, and he advised them to concentrate on building homes costing Rs 5 lakh. This led the founders to focus on R&D through his connections at NIRD (National Institute of Rural Development, Hyderabad).

For the past two years, the team has been working on the design and functional aspects of affordable housing development to make the cost of owning property to as competitive as Rs 5 lakh per unit. They were able to do that by using technology, and working with state governments and stakeholders.  

“Governments have vast unutilised lands in the city spaces. Our model is to work with them to get their unused lands and bring in container housing models as community living. These will act as rental housing for migrant workforces,” Deepak explains.

He adds that HomeStory works as a B2B marketplace for affordable housing where they bring together land owners, companies that employ around 300-400 workers, and credit support lenders on a single platform.

“It has now come to a point that we can execute a one-bedroom villa for Rs 6 lakh. We are now working with financial institutions such as the Life Insurance Corporation of India (LIC), which has agreed to fund people’s home on an instant basis. These kinds of projects are executable if done on large scale,” he says.

HomeStory’s focus is to not just to build affordable housing but create an entire ecosystem of community living – right from ensuring accommodations have transport connectivity to providing recreational activities to make living sustainable.

The company is working with the government of Tamil Nadu in a public-private partnership model (PPP) and is focusing on providing rental housing in Coimbatore and Tiruppur. It aims to build one lakh affordable homes by reducing the cost of construction through technology and scale, and by using a bottom-up approach.

It is in the process of building 750 affordable housing units in Tiruppur, which will be available at an EMI of around Rs 5,000 per month.

“Our rental model is completely focused on the migrant population. They can save a bit of money and live in a dignified manner. Following the onset of the coronavirus pandemic, these migrant populations will live together and not fragmentedly. It’s important to build an ecosystem where they don’t feel left out,” Deepak adds.

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Challenges and the future

Building affordable housing at scale comes with its own set of challenges. Deepak says the main hindrance they faced were while procuring land parcels and government approvals, and to make the housing sustainable.

“This is challenging because we have to work on a wafer-thin margin. But we have to be very wary about the cost of the land and the construction of the building. Even if it is Rs 100-200 per sq ft, the market won’t accept it, or the buyer won’t have enough financial support to afford that house. So we did a lot of R&D in terms of system, design, and materials to be used in construction,” he explains.

HomeStory has been a part of GSF Accelerator’s bootcamp programme in Gurugram, whose aim is to spur innovation and growth through angel and seed funding. Its partnership with LIC will ensure credit support of Rs 1,000 crore over the next three years to buyers from the blue-collar workforce.

The company is looking to generate Rs 150 crore in revenue in 2021, and double that figure by 2022. HomeStory remains self-funded through its parent company.

For the next two years, its focus will be on Tiruppur – a major textile and knitwear hub – and hopes to achieve the target of one lakh affordable homes by 2024. The team also plans to use 3D printing to further drive the costs down, and help the company in executing projects in a minimal timeframe with reduced use of labour.