Innovative finance and development mechnsims for urban rental housing

Abstract

Public policy and discourse on urban housing in India has traditionally focused on ownership housing which alone cannot fill the huge gap for housing in Urban areas. Recognising the need of rental housing, NIUA published a draft rental housing Policy with social rental housing, need based and market-based components. States like Punjab and Haryana have notified rental housing policies. However, at large there is lack of projectisation and implementation of these policies. India is at nascent stage in rental policies and initiatives especially social rental housing which creates a huge research gap in this domain. The implementation and projectisation of Urban Rental housing policy is still lukewarm with only active rental housing projects under ARHC component of PMAY, effectively implemented in Chandigarh. Internationally, there has been a demand for innovative financing mechanisms in public sector projects. Traditional funding mechanisms are incapable of funding development of cities and there is a need to decrease reliance on central and state grants for urban development. Rental housing has seen various supply and demand side innovative interventions internationally. In order to make these projects financially viable in India innovative finance and funding mechanisms like CSR, REIT, could be used as suggested by national policy. The applicability and viability of such mechanisms are explored in the thesis. The thesis aims to explore and demonstrate use of innovative development & finance mechanisms for implementing Urban Rental housing. The study is majorly phased in three components: understanding policy landscape, understanding projectisation, development models and exploring scope of innovations. The comparative policy analysis is done by encoding policy documents and analysing them through NVIVO software. Previous attempts in Rental housing were by MMRDA and Kota that faced challenges due to lack of comprehensive policy framework, unsustainable development models. The thesis attempts to understand projectisation and financial feasibility of rental projects through primary case study of Maloya ARHC project, Chandigarh. The aspects covered are financial viability, implementation framework, development model including construction, operation and maintenance. ii | Innovative Finance and Development Mechanism for Urban Rental Housing The learning of the study is applied on a case of Haryana Rental Housing policy on study area of Gurugram Manesar Urban Complex. Finally, finance and development mechanisms are iterated for implementing Urban rental housing components. The model offers flexibility to private developers and calculates return on investment implemented through a dedicated rental housing model and an inclusionary zoning model