For the last three years, affordable housing has been the focus of the government. As buying a house is still out of reach of the majority, affordable rental homes are the need of the hour so as to meet the huge demand of housing in the country. The new rental policy by the government is likely to be launched and is in the consultation stage now.
A huge influx of people has been seen by the metro cities, which are coming from the Tier 2 cities in search of employment. The rapid urbanisation is causing the shortage of houses in the country that are being required by the LIG and EWS categories. 18.78 million Units is the estimation of the urban housing shortage according to the government reports. Affordable rental homes needs to support the affordable housing in order to absorb more people into the housing ecosystem.
According to Ramesh Nair – CEO and Country Head, JLL India, rental housing schemes are important for the social welfare and needs onto to be focussed by the government. The rental projects are held in the affordable housing institutionally for formats such as senior living (long lease), student housing and executive rental housing in growth centres.
The government in many countries like Australia and China, provides land as well as the incentives for affordable rental houses. Due to the lack of any kind of rental policy, the Indian cities continue to grapple with these challenges.
According to the Real Estate Management Institute (REMI) there are few challenges before affordable rental housing in India. One of these is maintenance and upkeep of houses as the chances of the tenants to pay the rent or not is uncertain. The high land cost is not a very attractive proposition. Tenancy and Rental Laws are the key factor as there is a need to revamp the existing tenant laws because the people are nervous about rental housing models. The emotional need to buy rather than rent is dominant in the Indian realty sector.
Whereas the build-to-rent model has been picked up the other markets around the world for affordable housing requirement. Due to this model, the various countries are building housing to take control of the building and also are renting it to the lower income families. This can be utilised, when the government incentivises the private sector. The model requires the participation from both the private and the government.
Catering the growing demand for rental homes have given rise to many start-ups in India, which offer low-cost rental homes to migrated population mainly working professionals and students. This trend is picking up in Mumbai, Bengaluru and Delhi-NCR as well.
According to Getamber Anand, CREDAI Chairman, the success rate of the affordable rental home depends on the government aid or some kind of tax benefits. It appears that the built-to-rent model can only be successful when the government helps the builders by the incentives as it is not plausible for them to construct to rent. Hence government needs to encourage private participation through tax benefits to meet the goal of Housing for All by 2022.
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