India’s demography presents us with great opportunity to build a sustainable and equitable economic growth. While India is the third largest global economy, our housing infrastructure, however, has not kept pace with the rising growth. Large scale migration during COVID-19 crisis brought into sharp focus the poor living condition of millions of migrant labourers across India.
Recognizing the urgent need to provide better living conditions for our people in India, Rental Housing Association of India (RHAI) has submitted a detailed recommendation to the Ministry of Housing to create a sustainable ecosystem and improve the living conditions of people in India. To this effect, a white paper was released in a webinar conducted by Guesture-Primus Partners and Invest India. Among the many suggestions made by the association to the Central and State Government, giving ‘Infrastructure’ status to rental housing industry was one of the key
recommendations. RHAI has also recommended creating a viable ecosystem that encourages building of rental housing for employees or for socially vulnerable section of the society under CSR and formulation of Residential Real Estate Investment Trust (RREIT).
In a detailed recommendation to each of the stakeholders including, Central, State, Corporates and Educational institutes, the body has suggested the setting up of Social Rental Housing, Need Based Rental Housing and Market Based Rental Housing schemes catering to diverse sections of the society. This also includes an online portal for all rental housing properties, facilitating mandatory online registration and providing incentives to corporates, industries, businesses and educational institutes that facilitates quality housing to their migrant workforce /employees and students, respectively.
Talking about the RHAI’s recommendations, Sriram Chitturi, Founding President of RHAI and Founder of Guesture, a co-living start-up, said, “Government’s vision of development of vibrant rental housing market in India, especially catering to poor sections of society, needs combined efforts by various stakeholders including Central & State Government, Private Sector and Local communities. It is important to establish an encouraging policy & regulatory environment conducive for investments in rental housing by private players. Policy interventions in land acquisition, approval processes and taxation are much needed to expedite development of rental housing, which will act as a catalyst by creating a multiplier effect on job creation. We have submitted the recommendations to the Ministry of Housing and are also in the process of submitting our recommendations to other stakeholders in the Industry.”
The percentage of households living in rental has witnessed a sharp increase, from 10.5% in 2001 to 11.1% in 2011. Out of the 7.1 million households living in rented houses in India between 2001 and 2011, almost 90% of the increase was contributed by the urban factor. In spite of the burgeoning growth and demand for rental housing, majority of the hired houses have no written contracts implying widely prevalent unorganized nature of the residential rental housing industry in India.
In view of the challenges plaguing the ecosystem, it is important that policies that appropriately support the rental housing sector, participation of private players and more aware citizenry becomes important and necessary. RHAI’s recommendations are in this direction.
|1.||Enactment of Rental Regulation Act in place of existing Rent Control Act.||Mid Term|
|2.||Constitute the State Rent Regulator/Authority (as envisaged in the Model Tenancy Act 2019)||Mid Term|
|3.||Encourage continuous creation & increase in supply of Rental Housing facilities by the Private Sector, using government/private lands, leading to the availability of good quality, affordable Rental Housing facilities in all the three categories||Short Term|
|4.||Undertake appropriate reforms to make Social Rental Housing viable & Earmark/reserve certain percentage of newly to be built flats/land within large housing projects for Social Rental Housing||Short Term|
|5.||Define/promote/formulate policies to create Residential Rental Management Companies (RRMC), which operate/manage rental housing facilities professionally||Short Term|
|6.||Build capacity of various stakeholders in planning, implementation and management of Rental Housing schemes||Short Term|
CENTRAL GOVERNMENT – MINISTRY OF FINANCE
|1.||To accord infrastructure status to rental housing developers||Short Term|
|2.||To define rental housing developers, operators & aggregators under the GST and bring them under the GST Net at the lowest slab rates.||Short Term|
|3.||Formulate Residential Real Estate Investment Trust (RREITs).||Mid Term|
|4.||Banks and Housing Finance Institutions (HFIs) may promote innovative financial instruments to finance Rental Housing Schemes.||Short–MidTerm|
|5.||Facilitate income tax concessions for institutional owners that create Rental Housing.||Short Term|
|6.||Encouraging building of rental housing either for own employees or for other socially vulnerable section of the society under Corporate Social responsibility (CSR), by allowing 100% deduction of the capital expenditure incurred.||Short–MidTerm|
|7.||Create a separate category of depreciation for Hostels and Dormitories.||Short Term|
MINISTRY OF HOUSING AND URBAN AFFAIRS
|1.||Monitor Implementation of all the above-mentioned recommendations with respective authorities||Short – Long Term|
|2.||Develop economically viable rental housing models (such as Rent-to-Own Scheme, Shared Ownership Scheme, PPPModel, Rental Voucher Scheme, Rental Allowance Scheme etc.)||Short Term|
|3.||Extendfiscalandnon-fiscal concessions for rental housing including that for PPP in rental housing.||Mid Term|
|4.||Recognizeandawardbest/innovativepracticesadoptedbytheStates/private sector/implementing agencies for their contributions on rental housing sector and disseminate related success stories.
||Short – Mid Term|
|5||Legislate the National Urban Rental Housing Policy||Short Term|