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6/10/13 More rental homes the next big thing in housing? - Hindustan Times

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Monday, June 10, 2013

Moushumi Das Gupta, Hindustan Times

New Delhi , June 10, 2013

First Published: 02:45 IST(10/6/2013)

Last Updated: 03:39 IST(10/6/2013) Print

More rental homes the next big thing in housing?

To facilitate those who cant afford to buy a house, a government appointed panel has recommended a separate

law for regulating residential rental housing in India and tax benefits to encourage private developers to set up

rental housing projects. India does not have a rental housing policy as of now though some states like Himachal

Pradesh have enacted their own legislation to address rent related disputes. Delhi, on the other hand is yet to

notify its Rent Control Act. Globally, however, it is a popular concept.

According to published reports, between 40% to 80% of residents in cities such as Bangkok, Berlin and New

York live in rental housing.

But in India, of the 18.78 million new houses built between 2007-12 for renting, a whopping 11.09 million

houses are still lying vacant or locked up, indicating how opaque laws deter owners to rent out their house.

The 19-member panel headed by Jaithirth Rao, chairman, Value and Budget Housing Corporation Private

Limited was set up by Housing and Urban Poverty Alleviation ministry last year to analyse the causes of non-

availability of sufficient housing for rental purpose and recommend policy interventions for creation of rental

housing stocks.

In its report, it has not only recommended setting up of a Residential Rental Housing Act specifically for the

rental housing sector on the lines of the Model Residential Tenancy Act 2011 but also separate law for

residential and commercial rental properties.

The panel also wants that instead of standard prices that are presently regulated by a rent controller or court, the

rent price -- reflecting the present market rates -- should be based on contractual agreement between the

landlord and the renter. Arbitrary increase in rent prices should be discouraged.

It has also called for setting up of a special fast track rental housing tribunal for speedy resolution of all rentrelated disputes and according "infrastructure" status for large rental housing projects. Tax benefits can also be

given to rental management companies to help them operate smoothly.

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