Can smartly designed private all-rental developments be the answer to housing woes? April 10, 2012

Imagine for a moment that a migrant entering a city could apply to one of several private housing rental companies, choose as per availability and simply move with minimum baggage into a serviced, privately managed property that fits her budget. Imagine too, that these private rental developments are scattered across every city, serving major commercial districts and built along mass transit corridors. I’d go one step further and imagine that private managers of rental property see advantage in offering these to low-income and middle-income families, so that the economies of scale make these profitable.

While working on the Jalti Jhopdi project these past ten days, we were discussing the problem of migrant housing during a site visit. The discussion was with a colleague who is not an architect or urban planner, but has worked extensively with communities in Gurgaon. In her opinion, the only solution was for the government to facilitate the setting up of managed rental housing to be made available to migrants for a year (they pay Rs 800-900 for terrible, little hovels at this point!). During this year, it could be possible through a network of NGOs and employer organizations, to equip families with identity papers, a basic understanding of how things work, livelihood for the adults, schooling for the children vocational training, etc so that they can carry on with life with some dignity. Her thought stayed in my head even as I wondered at the complete lack of government response to the unique problems migrants (at all income levels) face, especially in emerging urban centers like Gurgaon.

Yesterday, I read about Ikea starting a private, all-rental housing project for 6000 homes in Portland, Oregon and I felt the dots starting to connect. Five-floor high apartment blocks, car-free neighborhood, new urbanist aesthetic, but all in Ikea’s modular non-fussy style is what they seem to have in mind. The project targets middle class families and is pretty much a no-frills offering.

The Indian property market is certainly missing organized rentals as a logical step to home ownership, mostly because of low returns. Of course, there are barriers and risks to private companies attempting large-scale rentals. But it’s worth thinking about, especially in urban areas with high inflow and outflow of people, in new industrial towns and for low-income populations all over! We return to the need for policy initiatives to encourage this sector. Housing across income groups is a serious issue across India. Innovations to encourage quality rentals would take a lot of stress of a young, mobile working population and do wonders to the character of our urban settlements! Such a provision would make employers really happy and perhaps a partnership between large employers and developers is one way to start these off….

 

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2 thoughts on “Can smartly designed private all-rental developments be the answer to housing woes? April 10, 2012

  1. the answer is, Yes! BUT, for that to happen, it will take a herculean effort to break the politician-builder nexus. Right now in India, builders profits enormously by having politicians provide land for development and sale through acquisitions by development authorities and policies through legislation. And to keep their populist image the politicians refuse to amend the archaic rental laws which do not encourage the private market to respond to the tremendous demand for rental housing. I would recommend that the present development process of acquire, develop and sell be amended to acquire, develop, and maintain as per municipal guidelines. This would really make the developers rethink their strategies and would make they would ensure that civic amenities are provided and maintained as their profits would depend on these. Something like industrial townships but with more mix of uses.

    • i agree. everyone talks of a politician-builder nexus, yet i see organized developers at loggerheads with politicians at the same time…its a complex issue, but there is enough demand for all models to flourish at the same time! i am sure the builder-politician nexus can find a way to profit fro rentals as well :)

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