Knight Frank India (KFI) and Royal Institution of Chartered Surveyors (RICS) have said that ‘one size fits all’ approach may not necessarily work in Rental Housing markets, where one successful model can be easily replicated to another. The policymakers need to understand the intricacies of their cities’ Rental Housing (both formal and informal) and know how to formulate effective and flexible policies to regulate and promote the success of this housing segment.
In the jointly penned report titled ‘Brick By Brick- Development of Renting Housing in India,’ KFI and RICS have said that Rental Housing is only a partial solution to urban housing problems, but nonetheless an essential one - which is integral to well-functioning cities and an essential component of inhabitant’s livelihoods. They have released report on Saturday weeks after the Centre in the economic package has declared that it would look at promoting the creation of Rental Housing for migrant workers so that such difficulties can be avoided in the future. The Finance Minister also spoke of looking at the Public-Private Partnership (PPP) model to achieve this. This is the central focus, considering the recent COVID pandemic which has wreaked havoc on industry and people, especially migrant workers.
As per Census 2011, over 21 million (27.5%) urban households live in rented accommodations. The corresponding figure in 1961 was 54%, albeit on a much lower base. The Rental Housing market is therefore projected to grow at a faster rate than the rate of urbanization over the next 20 years.
KFI CMD Shishir Baijal said, "Rental Housing will have to be understood in the same spirit as other infrastructural development such as highways, roads, industrial parks. Most importantly, there is a need to make the creation of Rental Housing a viable option for participants for this to succeed.’’
Further, Rental Housing markets are ‘influenced by’ and ‘respond to’ local economic and political conditions and regulatory frameworks and can vary between cities.
RICS MD (South Asia) Nimish Gupta observed that it is necessary to integrate adequate support mechanisms to get Rental Housing into the housing policy, specifically for the low-income group (LIG)/economically weaker section (EWS) segment with the view to increase the range of affordable housing options. ‘’Rental Housing market would also require policy, regulatory and legal streamlining so as to incentivise more landlords to bring their properties in Rental Housing market place,’’ he said.
According to the report, this also presents an opportunity to channelize vast tracts of under-utilised government-owned land parcels in urban areas for mass Rental Housing projects. Development machinery of government comprising of housing boards can reinvent themselves as asset owning and managing companies of the future.
KFI Executive Director Gulam Zia said when land pooling schemes are operationalized, a portion of the land is held back for urban infrastructure development. ‘’Some portion of this land needs to be allocated for development of Rental Housing. In absence of any significant land cost, the viability of Rental Housing projects would significantly improve, thus facilitating creation of a marketplace for such ventures which is not dependent on government subsidy,’’ he viewed.