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Affordable Rental Housing Complexes Scheme and Private Rental Housing in Indian Cities
Intended or not, projects under the Affordable Rental Housing Complexes scheme will compete with private rental housing options in Indian cities. Examining the scheme guidelines and using data from the National Sample Survey Office, this article establishes the dimensions of this competition, and the chances of ARHC projects to participate in the `1.2 lakh crore rental housing market in urban India. ARHC projects could have better quality/rent ratios as compared to private rental housing. However, their profit-centred models will face locational and management disadvantages, and also reduce tenure security, leading to lack of demand and limited outcomes.
The author would like to gratefully acknowledge the comments and inputs of the reviewer.
The 76th round (2018) of the National Sample Survey Office’s (NSSO) reports that about 91 million people in 31 million households (33% of all urban households) in India live in hired accommodations (NSSO 2019). The absence of any significant supply of government or organised private sector rental housing (Harish 2016) implies that this market is dominated by private individual landlords. By most accounts, these are formal and informal owners of extra land, rooms, building floors and flats, as well as operators of paying guest and other short- to medium-term accommodation providers. In 2020, the reverse migration caused by the COVID-19 pandemic-induced lockdown forced the attention of policy and civil society back to the question of rental housing. Civil society groups, unions and academic institutions reported that with dwindling employment prospects, the ability to pay rent on time emerged as a critical issue for migrants and the urban poor alike (Chowdhury et al 2020; SWAN 2020).
In response, the Government of India speedily launched a programme on rental housing, called the Affordable Rental Housing Complexes (ARHC) scheme, with an aim to supply hundreds of thousands of affordable rental units in urban areas (Government of India 2020). The ARHC scheme allows for two “models” to supply this housing: model 1 repurposes existing ‘‘vacant’’ government-funded housing to rental, while model 2 encourages the participation of private and public sector entities to develop rental housing. Both models require the involvement of a “concessionaire,” who is a contracted project proponent with a profit motive. In model 1, the concessionaire is expected to repair and refurbish existing vacant government-funded housing and provide them on rent for a period of 25 years. In model 2, the concessionaire is expected to contribute their land to develop rental housing. In all cases, there are incentives in the form of tax rebates, as well as the promise of trunk infrastructure.
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