Question

Which of the following is/are supply side intervention(s) to improve housing affordability?

• A. Increase in availability of urban land for housing
• B. Increase in Institutional Housing Finance
• C. Reduction in Floor Area Ratio
• D. Increase in Stamp Duty

Hint:

Supply-side interventions focus on increasing the availability of land and finance to make housing more affordable. Demand-side measures, like increasing stamp duty, often have the opposite effect.

Answer 1

The Correct Option is A, B

Supply-side interventions in housing focus on increasing the availability and affordability of housing through improvements in the production and supply of housing resources.

Step 1: Increase in availability of urban land for housing is a supply-side intervention. Increasing land availability allows for more housing development, which can lead to lower prices and improved affordability.

Step 2: Increase in Institutional Housing Finance also plays a critical role in improving housing affordability. By increasing the financial support for housing development through institutions, more housing projects can be financed, leading to an increase in supply and improved affordability.

Step 3: Reduction in Floor Area Ratio typically does not improve housing affordability. In fact, a reduction in Floor Area Ratio (FAR) can limit the amount of usable space in a building, potentially increasing costs and reducing the number of units that can be developed on a given piece of land.

Step 4: Increase in Stamp Duty is a demand-side intervention, not a supply-side one. Increasing stamp duty raises the cost of purchasing property, which can make housing less affordable, rather than improving affordability.

Thus, the correct answers are (A) Increase in availability of urban land for housing and (B) Increase in Institutional Housing Finance.