Policy Briefs & Reports

The Missing Link: Understanding Rental Housing for Urban Poor

Anindita Mukherjee, Shubhagato Dasgupta, Abhinav Kumar, Aastha Jain, Isha Khurana

Centre for Policy Research

November 11, 2022

More than 30 million urban households in India, including urban poor, depend on the rental housing market for their housing needs, out of which around 70 per cent rely on informal rental arrangements. According to the NSSO 76th round (2017-18), 19 million households, 64 per cent of the total rental housing stock, belong to the economically weaker section. This reaffirms the important role of rental housing in providing housing for urban poor, albeit still remains understudied. This study contributes to the emerging discourse on state of rental housing for urban poor while highlighting the emerging policy direction from the analysis therein.

Drawing from primary data from a household survey of 1800 urban poor households that included landlord and tenants across Bhubaneswar, Coimbatore, and Cochin across slum or non-slum low income neighborhoods; the findings reveal poorer housing condition in slums than those living in non-slum areas. It also shows that the households providing rental services to urban poor are also urban poor and they continue to rely on informal rental practices. This further perpetuates the deficient access to basic civic infrastructure both for the renter and rent provider, further marginalizing the renter. These findings suggest that there is an imminent need to recognize urban poor households as a critical supplier of rental housing stock for the urban poor and to develop comprehensive approaches for incentivizing them to improve the quality of living in renting arrangements. It further highlights the need to involve communities to create quasi legal structures for easier and faster dispute resolution, preferably outside the formal legal structure – cost of compliance to the Model Tenancy Act (MTA) may end up exacerbating poverty among the renters. The report further highlights the importance of policy and planning measures including earmarking land for affordable rental housing near and around high growth areas, servicing areas where poor urban tenants live, among others.

As the fast-urbanising countries debate over the best ways to provide affordable housing at scale in the global south, providing affordable rental housing near places with economic opportunities is emerging as most crucial for fulfilling the vision of ‘Housing for All’. Affordable rent structure, universal access to safe water, sanitation, and connectivity through public transport have the potential to improve the living conditions and quality of life of urban poor enhancing their economic contribution in city making.