Rent tops new housing policy agenda

The draft National Housing Policy, to be tabled in front of all the state housing councils in September, will focus on changes in rent control laws and on concerted drive towards conversion of slums to low cost dwelling units.

"There are about 16 million dwelling units, which are locked up, and if they are released then the lack of housing facilities for slum dwellers can be solved. The National Housing Policy will take a close look at solving such issues through major policy changes," P S Rana, chairman and managing director of Housing and Urban Development Corporation (HUDCO), said at the 9th Asian Real Estate Conference here today.

The draft policy will also address the problems of landlords and tenants. "We may see an excess supply, if the land and houses of large realty owners are opened up," Rana said.

"With changes in the tenancy tenure and guarantee to landlords that they will get back their houses as and when they need it back, will encourage more such owners to release their excess holdings in markets, bringing in more supply," he added.

The housing policy will also focus on making the rental income tax free as this will be an incentive for landlords to add to the supply. Rana hinted that the policy could look at providing other incentives to encourage investment in social housing schemes based on rents.

Stressing on the needs of customers who were not credit-worthy, Rana said the policy would look at providing proper back up and tax incentives to match those available to the credit-worthy people.

Another focus area will be incentivising the investments made by employers for residential facilities for employees.

"Increasing rental and capital values have the highest multiplier effect on the inflation rate and this can be counteracted with increasing supply and the big employers can play an important role. Tax incentives for the companies can help in stabilising," Rana said.

At present, the advances for buying houses is around Rs 20,000 to 25,000 crore and is likely to increase to Rs 70,000-75,000 crore in the next two to three years.

"With such a large flow towards the housing sector, the inflationary pressure should be regulated to address the lower-end users also," Prof Suber Saha, director, School of Planning and Architecture added.