To meet high demand for housing, govt mulls first-ever rental policy
Realising that promotion of ownership housing is not enough to meet the huge demand for residential space in urban areas, the Centre - in a distinct policy shift - is planning to back rental housing in India. Living in international citiesdelhi Updated: Aug 17, 2012 01:06 IST
Realising that promotion of ownership housing is not enough to meet the huge demand for residential space in urban areas, the Centre - in a distinct policy shift - is planning to back rental housing in India.
India's shortage in housing, as on 2007, was 24.71 million. Taking this into account, the housing and urban poverty alleviation ministry, is mulling to bring in a rental housing policy for people who cannot afford to buy a house.The proposed policy will not only target those belonging to economically weaker sections but also members of the sizeable middle-class population who cannot afford to buy houses.
There is also a huge demand for affordable rental accommodation among urban migrants who move cities due to employment concerns.
The ministry has set up a 19-member task force, headed by Value and Budget Housing Corporation Private Limited chairman Jaithirth Rao, to analyse the causes for scant availability of rental property and recommend policy intervention for creation of such stocks.
It will submit its report in December.
"A need was felt to bring in a legal and regulatory framework for promoting rental housing. At present, it is not a priority despite the huge demand," housing minister Kumari Selja said.
As of now, India does not have a rental housing policy despite it being a popular concept across the globe.
According to published reports, 40% to 80% of the people take up rental housing in cities such as Bangkok, Berlin and New York.
In Delhi, 26% of the population lives on rental accommodation.
The ministry is mulling over various strategies to make the rental housing policy workable.
"For instance, the government can give incentives and rope in private sector companies to create rental housing stock and manage it as well. Alternatively, once rental housing stock has been created, the government can rope in private players to manage it," said a ministry official.
Ministry officials say that to encourage investment, private individuals can be lured through rebates on property tax or maximising returns on investment in rental housing.
The taskforce will also suggest strategies to increase the rental housing stock through various tax and non-tax incentives.