The real estate industry is exploring ways to expand rental housing. At a conference organised by the National Real Estate Development Council here on Friday, developers and government representatives spoke about challenges and opportunities in widening rental housing.
Just 10 per cent of households in India stay in rented houses. In urban areas, an estimated 28 per cent stay in rented accommodation. In many developed countries, the proportion of rented houses is much higher. For instance, in Germany, 60 per cent stay in rented houses.
“Rental housing can be an effective tool for addressing shelter needs,” said V P Baligar, chairman and managing director of Hudco. He said owning a house was becoming increasingly unaffordable and unattainable. Lower transaction costs in rental housing benefit not just tenants, but also landlords with a steady source of income, according to Baligar.
Rental option is more affordable than owning a house for economically weaker sections and lower-income groups. Similarly, for migrant workers or students, rented accommodation was the best option, experts said.
Challenges in developing rental housing include low yield of three to five per cent, scarcity of land and its high pricing, restrictive and negative Rent Control Acts and archaic municipal laws.
A K Mishra, secretary, ministry of housing and urban poverty alleviation, called land availability a big challenge. He said the government over the last seven years had provided 1.5 million houses. “But the recent situation had changed the scenario because land has become more expensive and its availability is much less,” he said.
