The increasing pressure on public finances and the need to support the housing programmes and other development projects seems to have led to a universal trend with the private sector involvement getting more preference in the creation of housing amenities. The involvement of this sector has played an increasingly important role in raising the housing stock. For instance, the private sector’s contribution in the total investment for housing was found to be 73.6 percent in the Third five Year Plan and this has increased over the years and it was as high as 92 percent in the Seventh Plan.
However, the type of houses produced by the private sector is very costly and is beyond the reach of the poor, and in recent times, an increasing proportion of the middle-income households are finding those houses quite unaffordable. Due to the continuing appreciation in Real Estate Cochin
and its prominent areas are now out of bounds for people with small and marginal incomes.
A large proportion of the houses in the private sector are actually built by the efforts of the house owners themselves. Here too, the section, which gains access to housing through legal means, is confined mainly to the middle and upper income groups. For the poor, most of the housing is provided by the illegal informal private sector. The illegal informal sector manages to bring the cost of housing within the affordable limits of the poor, as land is either acquired free of cost, or is available at a low cost due to the undesirable conditions at certain localities.
The tent like housing structures are put-up by the people themselves, mostly from waste materials like polythene sheets, mats, dry twigs, gunnysacks, etc., or from recycled tin sheets, broken bricks, mud, mortar plaster, clay roof tiles, thatched coconut leaves, etc. Though the government visualizes an important role for the private sector in increasing the stock of housing, no sincere effort has been made in the past to encourage the private sector to invest in housing. However, the recently announced National Housing Policy has incorporated various measures for better participation of the private sector in the various housing activities.