A better future for rental market
Innovative schemes, use of vacant homes, PPP model recommended in draft Rental Housing Policy
Many people investing their hardearned money in a house hesitate t o rent i t out. Fearing that their tenants would either default on rent payment or not vacate the house, they prefer to sit back instead and wait for prices on the property to appreciate. Low returns on rentals are a problem too, with 1.4% returns on residential property contrasting sharply with 6% to 7% returns on commercial properties.
The draft National Urban Rental Housing Policy report released last month seeks to address all rental market issues. It acknowledges that 11.09 million houses are vacant in urban areas as per Census 2011 and suggests that if these are made available for rental housing, the urban housing shortage issue could be largely sorted out.
Real estate experts are of the view that the gap between vacant housing stock and actual housing requirements needs to be bridged, a task which can be accomplished by drawing up an inventory of empty houses. Amit Bhatt of Embarq India suggests that the government could consider the Singapore model of providing housing to people for a fixed tenure, getting the government to take over the units later to consider their redevelopment potential.
“The new draft policy seeks to address some of the fears landlords have but it remains to be seen how it gets implemented,” says Sunil Tyagi of Zeus Law, a law firm.
The draft proposes rental housing models such as PPP and schemes such as rent to own, shared ownership, rental