The Telegraph
Thursday , January 3 , 2013
Since 1st March, 1999
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Govt to play benevolent landlord

A woman demands housing rights for the poor at a protest march in Mumbai on Wednesday. (AP)

New Delhi, Jan. 2: Enter, a benevolent landlord who is better known by an impersonal 10-letter word.

After having failed to provide affordable homes in sufficient numbers, the government is planning to rent out houses, especially to migrant populations in cities.

“There is a huge migrant population in almost all cities. It is largely this population which, due to lack of housing, settles down in slums and is forced to live under deplorable conditions. Most of them do not have enough capital to invest in a house,” said National Building Organisation director D.P.S. Negi.

According to figures available, the shortage is about 18 million houses. Of them, 10.55 million are in the category of homes for the economically weaker sections (EWS).

The first project under the government’s rent-a-house scheme was sanctioned last week in Kota, Rajasthan. The project is aimed at reducing the shortage in EWS houses and the standard size the housing and poverty alleviation ministry has prescribed is 25-27sqm.

“We have suggested that a two-room set should be constructed in this space. However, unlike other EWS houses, we do not want the state government to construct the houses in limited budget and thereby compromise on the quality of construction,” said a senior ministry official.

The housing ministry will bear 50 per cent of the construction cost while state governments will have to provide the land and pay the remaining amount.

“One model would be to bid out to a private builder who can foot the bill for the remaining 50 per cent of the construction cost and in return collect rent for a fixed number of years. The other is the state government provides the entire remaining amount. Under both the models, the houses will not be given free of cost, the tenant will have to bear 10 per cent of the cost of construction over the years,” the official said.

The rent and tenure will be fixed by the state government concerned.

The housing ministry has advised that state governments should also give tenants the option of buying the house. “In cases where tenants have been regular with payment of rent for five years, they should be eligible to buy the house at a subsidised rate,” the official said.

“We will be constructing 1,200 houses and they should be ready in the next 14-16 months,” said V.K. Garg of the Rajasthan Urban Infrastructure Finance and Development Corporation.

The eligibility criteria for allotment of houses and the rent have not been fixed yet. But Garg said the rent should be 20-30 per cent of a family’s monthly income. “So we will be fixing a nominal rent, something around Rs 500 per month.”

On August 17, the ministry had set up a task force to “promote rental housing as a viable alternative to address housing shortage”. The task force, headed by Jaithirith Rao, chairman, Value and Budget Housing Corporation Pvt Limited, was given four months to come up with a detailed report. The report is yet to be submitted.