Home / Politics / Policy /  Only 28% of Urban India lives in rented houses: Economic Survey

New Delhi: A mere 28% of India’s city dwellers live in a rented house, which is a steep decline from the scenario in 1961 when a majority of them (54%) used to live in a rented house instead of owning one, according to a longitudinal analysis of India’s housing pattern undertaken by the Economic Survey 2017-18. (See Chart 1)

While India is in the middle of a “Housing for All" mission, which aims to build 3 million houses in urban areas alone, the survey flags the cost of over-reliance on house ownership at the expense of other models of dwelling.

While reliance on renting as a practice has declined, there has been a dramatic rise in the number of houses lying vacant in cities across the country.

According to the survey’s analysis of census figures, 12% of the total housing stock in urban India remains vacant. Mumbai has 500,000 vacant houses, followed by Delhi which has 300,000 vacant houses. (See Chart 2)

Clearly, there are deep systemic problems in the rental market and addressing them is important for solving India’s enormous housing challenge, the analysis pointed out.

Tying the issue of housing with impediments to migration and economic activity, the analysis observes that rental housing is important for both horizontal and vertical mobility as it allows people to access suitable housing without actually having to buy it.

“Across the income spectrum, rental housing is an important foothold into a city for new arrivals, until they are able to, or choose to, purchase their own homes. For rural migrants, in particular, whose financial portfolios may already be tied up in land and livestock, it is access to shelter that is more important than investing in another lumpy asset that is subject to local market risk," the survey said. However, rent control, unclear property rights and difficulties with contract enforcement along with India’s encouragement of home ownership through socioeconomic policies have resulted in the present scenario.

India’s housing requirements are “complex" and a broader set of policies are needed than just building new houses and encouraging ownership, said the survey.

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