Responding to worker housing needs, many manufacturing companies across India are building low cost houding for blue collar workers to reduce labour attrition and improve living standards. Manufacturing companies such as TVS Group, Toyota Kirloskar Motor, and SKF India are establishing these housing colonies in key manufacturing hubs such as Pimpri-Chinchwad in Pune, Bhiwandi on Mumbai’s outskirts, and Bidadi in Bangalore. These initiatives should increase worker loyalty and reduce down time as workers live in better, healthier accommodation. This housing is also much in demand given the national dearth of affordable housing, the “Royal Institution of Chartered Surveyors (RICS) sayd 26 million homes are required by 2012 to meet the housing shortage in India.”

Several low-cost housing clusters targeted at bluecollar workers, some of them set up by their companies, are emerging. These are simple habitable units built in most cases around their factories. These group-housing initiatives reduce attrition rates especially in labour-intensive businesses, and make employees more productive on the factory floor. Where companies establish them, they could also potentially reduce strife, the kind of troubles that Maruti recently ran into.

Such group-housing projects are mushrooming around the industrial belts of Pimpri-Chinchwad in Pune, Bhiwandi on Mumbai’s outskirts, and Bidadi in Bangalore.

Toyota Kirloskar Motor is planning to buy 15 acres near its factory in Bidadi for such a project. When TOI contacted Shekar Viswanathan, deputy MD of the company, he said, “Initial studies have been done, but I would reserve any further comments till we make an official announcement.”

Employees working for bearings and lubrication systems manufacturer SKF India have formed SKF House Building Co-operative Society that is selling plots on a 20-acre land parcel in Bidadi. “The society used a developer for land acquisition and to get all the approvals. We are allotting 300 sites at Rs 397 per sft primarily targeting setters/ operators working in the factory,” said Devendra Rao, president of the society.

The housing society is selling plots in three dimensions — 30×40, 30×50 and 40×60 — at Rs 4.76 lakh, Rs 6 lakh and Rs 9 lakh.

Janaadhar Shubha, pilot project of Ramesh Ramanathan-promoted Janaadhar Constructions, is developing a township on an 11.5-acre plot on the Attibele-Anekal Road targeted at the blue-collar segment.

TVS Group is said to be coming up with low-rise apartments on a 22-acre plot in Oragadam on the outskirts of Chennai, according to sources privy to the development. TOI could not reach the company for comments. Sources said a 1 BHK apartment would vary between 430 and 580 sft, priced between Rs 8.5 and 12 lakh.

Despite such launches, affordable housing projects catering to low-income groups are few and far between. The Royal Institution of Chartered Surveyors (RICS) sayd 26 million homes are required by 2012 to meet the housing shortage in India. And if this backlog were maintained, a minimum of 30 million additional homes would be required by 2020.

Karun Varma, MD of Bangalore and Kochi at real estate consultancy Jones Lang La-Salle India, says companies feel compelled to introduce such schemes, as firms, especially in the manufacturing sector, have found it a challenge to stay close to the labour pool. “Just like walk to work options and other retention benefits, such schemes can increase corporate loyalty.”

This trend is contrary to what is happening at the senior executive level, where firms are moving away from perquisites to a cost-to-company (CTC) structure. Big corporates are unlocking capital by selling their residential assets for executives. Many executives also like the idea of having the freedom to stay where they want. “But frims venturing into low-cost homes have a greater pull factor assuring workers good corporate governance,” says Rajeev Bairathi, director-investment advisory at DTZ India.

“There are no fly-bynight operators or other intermediaries. This makes it one of the compelling factors to buy these homes. Besides, some companies provide interest subsides.”