More rental homes the next big thing in housing?
To facilitate those who can’t afford to buy a house, a government appointed panel has recommended a separate law for regulating residential rental housing in India and tax benefits to encourage private developers to set up rental housing projects.delhi Updated: Jun 10, 2013 03:39 IST
To facilitate those who can’t afford to buy a house, a government appointed panel has recommended a separate law for regulating residential rental housing in India and tax benefits to encourage private developers to set up rental housing projects.
India does not have a rental housing policy as of now though some states like Himachal Pradesh have enacted their own legislation to address rent related disputes. Delhi, on the other hand is yet to notify its Rent Control Act. Globally, however, it is a popular concept.
According to published reports, between 40% to 80% of residents in cities such as Bangkok, Berlin and New York live in rental housing.
But in India, of the 18.78 million new houses built between 2007-12 for renting, a whopping 11.09 million houses are still lying vacant or locked up, indicating how opaque laws deter owners to rent out their house.
The 19-member panel headed by Jaithirth Rao, chairman, Value and Budget Housing Corporation Private Limited was set up by Housing and Urban Poverty Alleviation ministry last year to analyse the causes of non-availability of sufficient housing for rental purpose and recommend policy interventions for creation of rental housing stocks.
In its report, it has not only recommended setting up of a Residential Rental Housing Act specifically for the rental housing sector on the lines of the Model Residential Tenancy Act 2011 but also separate law for residential and commercial rental properties.
The panel also wants that instead of standard prices that are presently regulated by a rent controller or court, the rent price -- reflecting the present market rates -- should be based on contractual agreement between the landlord and the renter. Arbitrary increase in rent prices should be discouraged.
It has also called for setting up of a special fast track rental housing tribunal for speedy resolution of all rent related disputes and according "infrastructure" status for large rental housing projects. Tax benefits can also be given to rental management companies to help them operate smoothly.