Ministry readies first rent policy to tide over urban housing shortage
The housing and urban poverty alleviation ministry is anchoring India’s first draft national rental housing policy.india Updated: Jun 05, 2016 10:20 IST
Private residential rent management agencies are set to get government patronage to enter the largely unorganised housing market in the country, which is now dominated by individual, small-time agents.
Such agencies are common abroad and these bring efficiency in operation, maintenance and management of large-scale rental housing schemes in cities and towns.
The housing and urban poverty alleviation ministry, which is anchoring India’s first draft national rental housing policy, wants state governments to promote such agencies to bring professionalism and transparency in the sector.
Union housing minister M Venkaiah Naidu approved the policy last week. “We will soon move the cabinet to get the policy formally cleared by the government. Once cabinet clears it, we will send it to the states that will be free to frame their own rules based on the policy,” a ministry official said.
Aimed at addressing the growing housing shortage in the country, the policy will cater to two target groups — the urban poor such as migrant labourers and homeless through government-backed social rental schemes as well as working individuals in the middle- and high-income groups through institutional and public programmes.
To promote rental housing, the policy proposes direct and indirect tax benefit to both home-owners and tenants. For instance, for social rental housing (SRH) properties, the policy proposes rationalising tax for a predefined period that may vary between five and 10 years. Besides, urban local bodies will have to treat SRH properties that run hostels as residential accommodations for the purpose of calculating property tax and levying utility charges for water, electricity and garbage disposal.
To attract private players to develop rental housing properties, incentives such as higher FAR is being proposed. “These benefits will encourage more and more people to come forward to develop rental properties,” the ministry official said.
The policy proposes incentives for tenants, especially those belonging to the low-income group, by providing them vouchers that could be used by the urban poor to top up the rent they are paying to move into a habitable space. The state governments will transfer a certain amount of subsidy to this segment to meet housing costs.