Separate fund to push poor-oriented rental housing stock

 The Centre, which is preparing the National Rental Housing Policy, is contemplating an exclusive fund to promote rental housing scheme.

The fund will be created at both central as well as state level, said an official in the Ministry of Housing and Urban Poverty Alleviation. According to the proposal, the Ministry will provide 75 % of the construction cost of rental units while remaining 25 % is to be borne by states, urban local bodies and non-government organisations. 

The creation of special fund would help address the financial requirements of the scheme, said the official.

The rental housing policy is aimed at providing temporary shelters like dormitories, one-room accommodation to migrants and homeless people for short periods till they acquire their own house in cities.

The very idea of the scheme is to prevent mushrooming of slums that have so long provided informal housing to those who cannot afford to buy or rent homes in urban areas.

“Rental housing could be in the form of dormitories for migrant labour or 300 sq feet rooms in case of families. These shelters are to be vacated within five years by which time migrants were expected to buy their own home or rent one at market rates,” said the official. However the five-year tenure will not be applicable to destitute and homeless people.

The Ministry of Housing, which has already received comments from various states about its draft policy, said the proposal also includes creation of special purpose vehicles and rental management agencies for maintaining the rental stock, constructing rental accommodation on public private partnership (PPP) model of investment.

Before finalising the policy, the Ministry will again consult with states, international lending agencies, industry bodies and experts, said the official.

The NDA government last year launched Housing for All scheme with the aim of providing shelter to all by 2022 in the country. According to 2012 estimates, the country is facing 18.78 million units of housing shortage and 95 % of this shortage is in the low-income category.

The government is of the view that providing affordable accommodation to the poor, who do not have savings to buy a house, would be a viable alternative, said the official.