Rental housing share in cities shrinks

A quarter of India’s urban population lives in informal housing, including slums

Tens of thousands of people migrating to Indian cities each day cannot find adequate housing, as rental markets shrink despite millions of homes remaining vacant, government data shows.

The share of rental housing in cities has fallen by nearly half over the past five decades, according to the government’s annual economic survey released this week.

Rent control, unclear property rights, and a focus on building homes for ownership rather than renting are at the root of the problem, it said.

“Policies related to housing need to recognise that India has an increasingly fluid population [and] that across the income spectrum, rental housing is an important foothold into a city for new arrivals,” the survey said.

A quarter of India’s urban population lives in informal housing, including slums, due to the critical shortage of affordable accommodation, according to the social consultancy firm FSG in Mumbai.

That number is likely to increase with migration from the countryside to cities, as people seek better job prospects.

A government plan to provide housing for all by 2022 is meant to create 20 million new urban housing units and 30 million rural homes.

But most states are behind target, and analysts say the programme will not solve homelessness.

Finalising the national urban rental housing policy may help resolve the issue, as the current draft offers more protection from hostile tenants and gives them more incentive to rent, said Anuj Puri, chairman of ANarock Property Consultants.

“The lack of a clear regulatory framework has resulted in many house owners preferring to keep their houses vacant rather than renting them out,” Puri told the Thomson Reuters Foundation.