Reasons Why India Needs A Vibrant Rent Housing Market

Here is a brief explanation of the reasons why Indian cities like Delhi, NCR need a vibrant rental market:

The government freezes a fraction of the housing units in the Indian rental market. This means that the government has fixed fares which are very cheap from the market rate. According to the rules, rent is often not revised from time to time, even if the value of money is dropped rapidly over the years. So the tenants who live in rent-controlled apartments, giving petite rent compared to other residents.

In the rented property in Noida, residents are less likely to go to other rooms, even if they are otherwise in their interest to do so. The reason for this is that if they go to a different part of the city, they may have to pay an insufficient high rent, it will spoil the labor markets. For a perfect match between jobs and skills, there should be more labor mobility.

Figures show that the rented properties in Delhi does not do a good job for matching empty houses with homeless. When affordable housing is rare, the government is likely to spend more on the construction of affordable homes for the poor. However, it is inefficient when many homes remain empty. It puts a lot of pressure on the public finance of the Government of India but does not take proportional benefits when rent control is present; then the rent is likely to be high in the homes not being covered under the rent control system. Why? Rental control reduces the supply of residential units of rent as it is no longer very beneficial to rent homes, it is also likely that such houses will be encroached upon.

It is possible that the tenants will prove to be reluctant to leave when the rent is more expensive, the intercity migration will be less. In most developed countries, rent control was either abolished, or the second-generation rent controls were lightweight. It has so far happened in India, However, in most countries, rent control was introduced during the first or second world war. As the laws are not amended from time to time, the migration has declined in many Indian cities since the 40s.

Apart from this, when there is no alternative to hiring rented property in Noida, then it is unlikely that people will invest a lot in the housing themselves, making the house more expensive. In fact, rent control is an important reason why there is not so much incompatibility between personal income and home prices.

When rent control happens, so there will be a huge unaccountable market in the rented accommodation. Since such markets are outside the scope of the law, landlords are unlikely to be law-abiding citizens.

Tenants are likely to be wrongly done by landlords, and the disadvantaged market on attraction attracts a particular type of owner, who does not care much about laws governing society. Often, there is an uneasy relationship between landlords and tenants. Landlords of rented properties in Delhi do not have the possibility of upgrading their buildings because there is no benefit to it.

Homeowners are likely to rebuild their homes to make sure that utilities work properly on it. When the lease agreement can be determined, the landlord can separate the tenants according to the price they are willing to pay.