Panel recommends new law for regulation and promotion of rental housing
A government-appointed committee chaired by Jaithirth Rao, chairman, Value & Budget Housing Corporation, has recommended a new law for regulating rental housing and suggested that tax benefits be given to encourage developers to build rental housing projects. The panel is yet to submit its report.
Key suggestions made by the panel:
- Setting up of fast track tribunals for speedy resolution of all rent-related cases.
- Giving infrastructure status to large rental housing projects to facilitate them to avail of tax holidays, which will lead to lower costs.
- Affordable rental housing should include affordable hostels, dormitories and flats that are smaller than 60 sq m.
Why these recommendations?
In metro cities like Delhi, Mumbai and Bangalore the share of migrant population is as high as around 30-35%. Many people in this category, as well as other residents of these cities, prefer to rent houses instead of buying them owing to high prices of houses. There is also dearth of rental housing as property owners prefer to sell houses instead of renting them. The main reasons behind is low profits on renting (only 5% which is taxable) and eviction of a tenant which is considered cumbersome and time consuming.