Affordable housing has remained the focus of the government for the last three years. Since everyone cannot buy a house, affordable rental homes are necessary to meet the huge demand of housing in the country. They can also significantly contribute to ensure housing for all by 2022. Sources say, the government is likely to launch a new rental policy soon, which is already in the consultation stage now.
Why does India need a national rental policy? Metro cities witness a huge influx of people from Tier 2 cities in search of employment. India is also facing rapid urbanisation leading to shortage of houses primarily demanded by the EWS and LIG categories.
As per government reports, the urban housing shortage is estimated at 18.78 million units. Hence, affordable housing has to be supported by affordable rental homes so more people can be absorbed into the housing ecosystem.
“The government should focus on rental housing schemes as it is also an important factor for social welfare. Much as it incentivised, the affordable housing includes rental projects held institutionally for formats such as student housing, senior living (long lease) and executive rental housing in growth centres,” said Ramesh Nair - CEO and Country Head, JLL India.
In countries like China and Australia, the government gives land as well as incentives for affordable rental homes. However, in India due to no rental policy, cities continue to grapple with these challenges.
Shubika Bilkha, director, the Real Estate Management Institute (REMI) highlights four challenges of affordable rental housing in India:
Other markets around the world have gone into a build-to-rent model for affordable housing requirement. “I believe these are the key challenges that affordable rental homes face in India. In other countries, it works as a way to build housing to retain control of the building and also renting out to lower income families. China is taking advantage of this ‘built-to-rent’ model. This can work only when the government incentivises the private sector. What other models are there to absorb more people who cannot or feel cannot enjoy the luxury of affordable housing? This model cannot work without government and private participation,” explains Bilkha.
Private players
Considering the growing demand for rental homes, there are many start-ups in India offering low-cost rental homes to migrated population which mainly includes students and working professionals. This trend is picking up in Delhi-NCR and other places like Bengaluru and Mumbai.
“Affordable rental home cannot be successful till the government incentivises it or there are some kind of tax benefits. It is not really profitable and builders cannot afford to build to rent and it does not make sense till the government supports it,” said CREDAI Chairman Getamber Anand.
It appears that the built-to-rent model can only be successful when the government provides incentives for it and encourages private participation through tax benefits to meet the goal of Housing for All by 2022
Source- ET Realty
Why does India need a national rental policy? Metro cities witness a huge influx of people from Tier 2 cities in search of employment. India is also facing rapid urbanisation leading to shortage of houses primarily demanded by the EWS and LIG categories.
As per government reports, the urban housing shortage is estimated at 18.78 million units. Hence, affordable housing has to be supported by affordable rental homes so more people can be absorbed into the housing ecosystem.
“The government should focus on rental housing schemes as it is also an important factor for social welfare. Much as it incentivised, the affordable housing includes rental projects held institutionally for formats such as student housing, senior living (long lease) and executive rental housing in growth centres,” said Ramesh Nair - CEO and Country Head, JLL India.
In countries like China and Australia, the government gives land as well as incentives for affordable rental homes. However, in India due to no rental policy, cities continue to grapple with these challenges.
Shubika Bilkha, director, the Real Estate Management Institute (REMI) highlights four challenges of affordable rental housing in India:
- Land cost is high so it is not a very attractive proposition
- Maintenance and upkeep of houses - Tenants will be able to pay rent or not is uncertain
- Tenancy and Rental Laws - Revamp of the existing tenant laws as currently people are nervous about rental housing models
- Emotional sentiment – People want to buy rather than rent
Other markets around the world have gone into a build-to-rent model for affordable housing requirement. “I believe these are the key challenges that affordable rental homes face in India. In other countries, it works as a way to build housing to retain control of the building and also renting out to lower income families. China is taking advantage of this ‘built-to-rent’ model. This can work only when the government incentivises the private sector. What other models are there to absorb more people who cannot or feel cannot enjoy the luxury of affordable housing? This model cannot work without government and private participation,” explains Bilkha.
Private players
Considering the growing demand for rental homes, there are many start-ups in India offering low-cost rental homes to migrated population which mainly includes students and working professionals. This trend is picking up in Delhi-NCR and other places like Bengaluru and Mumbai.
“Affordable rental home cannot be successful till the government incentivises it or there are some kind of tax benefits. It is not really profitable and builders cannot afford to build to rent and it does not make sense till the government supports it,” said CREDAI Chairman Getamber Anand.
It appears that the built-to-rent model can only be successful when the government provides incentives for it and encourages private participation through tax benefits to meet the goal of Housing for All by 2022
Source- ET Realty
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