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Group Rental Housing*
Posted On: 2020-09-02 Author : R.S. Garg

The issue I propose to bring to focus in this paper is about the housing needs of the people who require houses on temporary basis, the reasons for such requirements, how currently their housing demands are met and what can be done to meet the existing shortage or any increase in such requirement in future. These are homogeneous group of people who needs housing on individual basis either for self or for their family but purely on temporary basis. Their requirement may be for few weeks, months or few years. Considering that their requirement is temporary, ownership housing is not suitable to them and necessarily they have to look for some sort of rental housing, which is suitable, affordable and is near to the place of their engagement.

Who are these people ?
Students: For purposes of higher education or for getting coaching for preparations for competitive examinations for such education or for getting coaching for competitive examinations for services such as Union or State civil services, banking services, railway services etc. students move from their native place to the place where they get admission. In certain cases, particularly in the case of college admissions, hostel facilities are provided and they stay in the hostels. It is, however, observed that in many cases with the increase in demand for such courses, the number of seats have been increased without corresponding increase in the hostel facilities. This has created demand for housing suitable for these students. Their number is increasing by the day.

Currently, this demand is being met by the owners of the houses in the vicinity of such colleges or coaching centres, which is also suitable to the students as they save on time and travel expenses. These house owners usually spares one or two rooms in their own house itself and accommodate students therein. In this manner, house owners also get some additional income. In some cases, a complete housing unit has been constructed or re-designed to meet this requirement.

However, there is no planned exercise to meet this requirement. There is totally unplanned and haphazard growth of dwelling units in certain areas where the demand is high leading to increase in congestion and demand for high rentals.

Patients/ their attendants /hospital staff : Patients load in hospitals of the country is increasing despite increase in the number of hospitals. Many a time it is also not possible to provide bed to the patient and therefore he is to be treated as out-door patient. In some of the illness, his daily presence in the hospital is required for treatment, but his stay in the hospital is not required for the whole day. Many times patients visits from far off places and it is not possible for them to visit daily from their native place and therefore they have to find place to stay near to the hospital.

Many a times hospitals do not have facilities for the attendant/s or some time the facility is available only for one attendant and the patient is accompanied by more than one attendant. They, therefore, also require temporary residential facilities near to the hospitals.

Many hospitals do have provision for housing doctors, nurses and other health workers within the compound of the hospital. However with the increase in patient load, there is increase in the strength of doctors, nurses and other health workers but there is no corresponding increase in the area of hospital to accommodate more health workers within the hospital compound. it is observed that the same has become highly inadequate.

Many a time we come across the patients or their attendants squattered in the corridors of the hospitals or in the open outside the hospitals or on roads near such hospitals. People living in the vicinity of the hospitals have also now started providing accommodation on temporary basis by sparing one or two rooms within their house.

Doctors /nurses /hospital staff also is always in search of accommodation in the vicinity of the hospital to save on time and expenses. Currently, they also take on lease available units within the vicinity normally at very high rent. One may come across number of hospital/nursing staff getting accommodated in one or two rooms to save on cost. At some places, owners have constructed/ tied up with the hospitals to provide such accommodation for their staff. Here again, there is no consideration for this additional requirement. As a result, we find lot of congestion and over crowding near to the hospitals.

Construction workers: We find gatherings of construction workers such as mansion, carpenter, painter, electricians, plumbers, labourer etc. at prominent market places or on chowk in every city in the country daily in the morning. They appear in large numbers at the fixed sites every day morning for work and disperse by noon or so. Either they get the work or remain unemployed for the day.

They are sort of migratory labour who come for work to the cities with or without their families. They stay with their acquaintances who might have come earlier and acquired some sort of accommodation on rent or spent their night on foot path or in shelter homes or near to the temples or at railway station or bus stand etc. At times, in the absence of work they have to go without food. Many a times and in the absence of work they resort to petty crimes.

They are daily wage earners. They come to cities during the period they do not have work at their native places. Many a time some member of the family come to cities to support their families who normally stays behind at the native place. They need temporary accommodation. Shelter homes are the best option for them. However, the same are either not available or if available are not adequate.

Domestic Helps : Domestic helps such as maids, car cleaners, watchman or security guards, electricians, plumbers, sanitary workers, washerman stays near to each pockets in the city. Normally they stay with their families where both husband and wife work in the neighbourhood. They stay in Kacchi Colonies near to their place of work or public park or in the street with in the cities. We do not find any provision for them even in planned colonies.

They also constitute a large group in cities and need low cost accommodation on permanent or temporary basis near to their place of work.

Single Working women/Men : Many young educated persons in search of employment or on getting employment come to cities. Normally they come alone and need single accommodation. Similarly many a times on transfer people come to other cities but for some reason do not wish to transfer their families.

Their numbers are also increasing by the day. At some places we find there are working women’s/men’s hostels. However, their number is highly inadequate. They are in need for single room accommodations with facilities of breakfast, dinner etc. They can afford to pay slightly higher rentals and form a different class.

Industrial workers : Large work force is also employed in our industries be it small or large industries. These industries are scattered all over the cities. The workers travel from one corner of the city to the other to reach their place of work. There is no provision for their housing nor the industry owner can afford to provide them housing near to the place of work or even within the city.

The position in the planned industrial areas are not different. Either there is no provision for housing for such industrial workers or where some provisions have been made the same is highly inadequate. Consequently, many a time workers are forced to stay within the factory premises with no facilities whatsoever and expose themselves to various kinds of risk. Hence, there is need for adequate housing at subsidized rates near to the location of industries/ industrial estates.

Old aged citizens : With the increase in life expectancy and the compulsions for the children to move away from the parents due to their occupation, the number of old aged persons is increasing in the country. They need to be taken care of for their social needs as also for the medical emergencies. The house which they may have constructed and in which they were staying earlier is becoming unsuitable to them. They find it difficult to maintain them. Some time they do not feel secure and find themselves vulnerable. They, therefore, are looking for some place where they can socialize themselves and where they can be taken care of in case of medical emergencies.

Old age home offers some sort of solution to their problems. However, number of such homes are very less in the country. Group Housing Requirement

2. In all the above cases, what we may find is that they need some sort of temporary and group accommodation. Such accommodation depending upon the requirements may be (i) shelter homes say for construction workers or migratory labour (ii) single rooms for hospital staff, students, working men /woman (iii) EWS/LIG type of housing say for industrial workers, domestic help etc. or (iv) community accommodation say for old age persons where all amenities as required by them can be provided.

Difficulties in providing Group housing on rental basis
3. The concept of group housing free or on subsidized rates or on rental basis is not new. As mentioned earlier, we have shelter homes, old age homes, working men’s / women’s hostels, staff housing etc. However, there number is highly inadequate. Also that we have more people in search of such housing such as students, employees on temporary transfers, migratory labour etc. We can say that demand has outpaced the supply in this regard. The reasons for such shortage could be :

a) Non availability/ high cost of land : Land parcels are normally not available within the city and /or near to the schools/colleges/coaching centres, hospitals, work places or industrial sites where we need to construct group rental housing. Further, where land is available, the same is very costly and makes the rental housing a totally unviable proposition. .

b) Building bye-laws : Building bye-laws as applicable in the cities also do not permit such constructions near to the hospitals, existing habitats, near to the schools/ colleges or industrial areas. Even mingling of plots for group rental housing purposes are not permitted. There are height and floor restrictions. The existing infrastructure is termed as inadequate to accommodate more number of people/ residential units in the area.

c) Rent Control laws : People do not construct for renting as they are wary of rent control laws,. Because of such law, eviction of tenants becomes a time consuming and costly process. They find it difficult to evict a tenant because of applicability of rent control laws in cities.

d) Un-remunerative : Return by way of rent on the capital employed in a housing project is negligible and sometime in the negative. Therefore, no one want to invest in such housing projects whether on group housing or individual housing basis. Under Income tax, deduction is available only in respect of interest on borrowed money, 30% of rent towards repairs etc. and municipal taxes. In view of this no one would like to invest his own money. And if money is borrowed, the income from rental will be in the negative. Therefore, there is no incentive to encourage group rental housing.

Measures Announced on May 14, 2020 by FM
Recognising the need for group rental housing, the Hon’ble Finance Minister announced on May 14, 2020 that the Centre will launch an affordable rental housing scheme under PMAY to help migrants and urban poor fund housing. The Centre will convert government funded housing into affordable rental housing complexes under a PPP model. Manufacturing units, industries and institutions will be given incentives to develop affordable housing complexes on their private land. Central Government agencies and state government organisations will also be encouraged to develop housing complexes.

Steps required to promote group rental housing
The statement by the Hon’ble FM underlines the importance of group rental housing and also suggest that the same can be achieved only by efforts from both, state and private sector. There is a recognition of the fact that private land will be needed for such housing and that incentives are required to be given for developing rental housing. Some of the steps required for group rental housing by the state and the private persons are as follows.

a) Steps required for promotion of group rental housing by the State
State can provide group rental housing for industrial workers, construction workers, single working men’s and women’s and old age persons. For industrial workers and their families, low cost housing units with proper amenities can be constructed near to the industrial areas by the State/ local authorities and given on subsidized rent to such workers. Such construction can be even on PPP model. Similarly, for construction workers shelter homes can be constructed by the State in various pockets of the city where normally construction workers gathers daily. State can also construct Working men or women hostel to provide short term residences to such persons. City wise old aged home can also be constructed by the state or local authorities.

The major difficulty in all these cases will be that of security, maintenance and management of such housing complexes. The assignment of security, maintenance and management work to private agencies is one option. However, while that may be explored on a case to case basis, that may not be economically viable in all cases. We should also consider management of such complexes on co-operative basis by the occupants on the lines of self help groups or involve Non Governmental Organisations.

Strict rules also need to be made to evict the occupants after certain specified period or on occurrence of certain specified events. Where private sector is involved in providing such housing, state should assist them in land assembly and by relaxing building bye-laws. Concessions from income tax on the lines available to infrastructure projects should also be made available and their income for the first 15 years or so should be totally exempt from income tax.

(b) Steps required for promotion of group rental housing by the private sector
Alongside the state efforts, private sector should also be involved in a big way in providing group housing to students, hospital staff, patients and their attendants, domestic servants, working men/women etc. For this purpose, the following incentives are required to be given :
i) Income from rent from such housing should be exempt from tax or taxed at lower rates. This will be a big incentive. For this purpose, instead of large complexes, a complex having 10 or 12 residential units should be made eligible.
ii) Relaxation in building bye-laws : As mostly these units will be constructed within the city, building bye-laws should be amended to provide mingling of plots and height and floor restrictions should be removed.
iii) Rent control legislation should not apply to such premises. On the contrary, we should evolve simple rule for evictions.
iv) Finance should be made available on easy terms to encourage people to construct such group housing on their land.

From the forgoing, it is clear that group rental housing is the need of the hour to house millions in our country who do not need housing of their own at the place of their present engagement or need to be housed temporarily for some other reason. Considering the huge requirement, involvement of both state and private sector is needed. Management and maintenance is a major issue for state housing and we need to develop SHG type of concept for public housing. To encourage private sector to invest in group housing, we need to provide them fiscal and other benefits and assure them good return on their investment. In this way, we will be able to meet this huge demand for group rental housing.