MADHYA PRADESH RENTAL HOUSING POLICY 2021 - (DRAFT) - Atal Bihari Vajpayee Institute of Good
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MADHYA PRADESH RENTAL
HOUSING POLICY 2021
(DRAFT)
SUBMITTED TO
URBAN DEVELOPMENT AND HOUSING DEPARTMENT
GOVERNMENT OF MADHYA PRADESH
BY
CENTRE FOR URBAN GOVERNANCE
Atal Bihari Vajpayee Institute of Good
Governance and Policy AnalysisAtal Bihari Vajpayee Institute of Good Governance and Policy Analysis (AIGGPA) is an
academic think tank of the Government of Madhya Pradesh vested with the responsibility of
advising the State government to enact on issues concerning overall welfare and ensuring
wellbeing of the society.
Established in March 2019, the Centre for Urban Governance, the newest centre at the
AIGGPA, has drafted the Rental Housing Policy for Madhya Pradesh, after wide consultations
for the Department of Urban Development & Housing, GoMP.This daft policy document has
been prepared by the Centre for Urban Governance, Atal Bihari Vajpayee Institute of Good
Governance and Policy Analysis (AIGGPA) for the state government to facilitate and give an
impetus to the rental market across the state.
The UD&HD has already taken up the task to bring forth the Model Tenancy Act by inviting
public opinion for necessary amendments and its implementation in the state. The Centre for
Urban Governance, AIGGPA has also given its proposals/recommendations for necessary
modifications in the Model Tenancy Act, which may further be adopted as the Madhya
Pradesh Tenancy Act 2020/2021.
Contributions & Acknowledgements
The study was conducted and drafted under the guidance of Shri Manish Rastogi, Director
General, AIGGPA.
Shri Girish Sharma, Director-cum-Principal Advisor, Centre for Urban Governance (CUG),
AIGGPA, led the effort with the able support and project co-ordination of Ms. Mausmi Hajela,
Advisor, AIGGPA. The team included Ms. Saloni Khandelwal and Ms. Ira Jain, Research
Associates, Centre for Urban Governance, AIGGPA.
Shri Anshul Puriya, Advisor,CUG, AIGGPA, extended technical and logistic support.
Consulting was given by Dr. Uttam. K. Roy, Associate Professor, Department of Architecture
and Planning, Indian Institute of Technology (IIT), Roorkee, Consultant, CUG, AIGGPA with
team members Ms. Saptami Sarkar, Ms. Dikchha Tiwari, Dr. Rewati Raman and Ms.
Ushnata Dutta, Research Associates, IIT, Roorkee.
CUG, AIGGPA is grateful for the comments and inputs from officers of the Directorate of
Urban Administration and Development (UADD) GoMP, Ms. Ruchika Chauhan, Additional
Commissioner, UADD, Ms. Meenakshi Singh, Additional Commissioner, UADD,Shri Neelesh
Dubey, Deputy Director, UADD and Shri. G.S. Saluja, Suprintending Engineer, UADD.
CUG, AIGGPA gratefully acknowledges the valuable contribution through consultations and
support by:
• Prof.Souvanic Roy, Professor, Department of Architecture, Town and regional Planning,
IIEST, Shibpur
• Prof.K.K.Pandey, Professor, Urban Management and Coordinator, Centre for Urban
Studies, IIPA, New Delhi
• Shri A.K.Sen, JGM(Eco.), HSMI, HUDCO, Delhi
• Prof. Binayak Choudhury, Professor, Department of Urban and regional Planning, SPA
Bhopal,
• Shri Amogh Gupta, Senior Architect, Chairman, SPA, Delhi
• Prof. Debolina Kundu, Senior Professor, NIUA,Delhi
• Dr. Upasana Mahanta, Professor (JGLS), Director of the Office of Student Life & Cultural
Engagement and Executive Director, Centre for Women, Law & Social Change, O.P. Jindal
Global University, Gurugram
• Shri Swastik Harish, Lead, Urban Practitioners' Programme, IIHS, Bangalore
• Shri Deepanshu Mohan, Associate Professor of Economics & Director, Centre for New
Economics Study, O.P. Jindal Global University, Gurugram
• Shri Shantanu Saxena, Lawyer, Legal Advisor, CREDAI, and
• Shri Ayush Dev Bajpai, Advocate, Bhopal
iTABLE OF CONTENTS
ABBREVIATIONS .................................................................................................................................................................... III
1. INTRODUCTION .............................................................................................................................................................. 1
2. NEED FOR THE RENTAL HOUSING POLICY, 2021 ..................................................................................................... 2
3. POLICY VISION AND OBJECTIVES .............................................................................................................................. 3
4. DEFINITIONS................................................................................................................................................................... 3
5. MPRHP POLICY FRAMEWORK ..................................................................................................................................... 5
6. GUIDING PRINCIPALS ................................................................................................................................................... 5
7. INCLUSIVE TARGET GROUPS AND STAKEHOLDERS .............................................................................................. 6
8. RENTAL HOUSING OPTIONS ........................................................................................................................................ 9
9. DEMAND AND SUPPLY SIDE INTERVENTIONS ........................................................................................................ 10
10. GENERAL PROVISIONS ............................................................................................................................................... 13
11. ROLES AND STRATEGIC ACTION PLAN ................................................................................................................... 16
12. SPECIAL FEATURES OF THE MPRHP .................................................................................................................. 22
13. MONITORING AND REVIEW OF MPRHP.............................................................................................................. 25
iiABBREVIATIONS
AIGGPA : Atal Bihari Vajpayee Institute of Good Governance and Policy Analysis
ALMO : Arm’s Length Management Organisation
ARHCs : Affordable Rental Housing Complexes
BPL : Below Poverty Line
BTR : Build to Rent
CSR : Corporate Social Responsibility
CUG : Centre for Urban Governance
EWS : Economically Weaker Section
FSI : Floor Space Index
FAR : Floor Area Ratio
HFC : Housing Finance Company
HIG : High Income Group
IIT : Indian Institute of Technology
IT : Information Technology
ITeS : Information Technology Enabled Services
JnNURM : Jawaharlal Nehru National Urban Renewal Mission
LIG : Lower Income Group
MIG : Medium Income Group
MoHUA : Ministry of Housing and Urban Affairs
MoHUPA : Ministry of Housing and Urban Poverty Alleviation
MPRHP : Madhya Pradesh Rental Housing Policy
MTA : Model Tenancy Act
NGO : Non-Government Organisation
PMAY : Pradhan Mantri Awas Yojana
PMAY-U : Pradhan Mantri Awas Yojana- Urban
PPP : Public Private Partnership
PPPP : PublicPrivatePeoplePartnership
PRH : Public Rental Housing
PSL : Priority Sector Lending
PSU : Public sector Undertaking
REIT : Real Estate Investment Trust
RREIT : Residential Real Estate Investment Trust
iiiRRMCs : Residential Rental Management Companies
RWA : Residential Welfare Association
SPV : Special Purpose Vehicle
SRH : Social Rental Housing
TDR : TransferableDevelopment Rights
TOD : Transit Oriented Development
UD&HD : Urban Development and Housing Department
ULBs : Urban Local Bodies
ivMadhyaPradesh Rental Housing Policy2021
1. INTRODUCTION
1.1. Housing is a process in human life, not a destination always. People often start this journey
with a rental home. There may be two reasons for which rented home is preferred. First, the
affordability and second, the deliberate choice due to transitional stages of life requiring a
short duration stay.
1.2. Classically, family-based and ownership-based housing has been the mainstream housing
provision in India post-independence except for few practices with the improvement trusts
in the cities and thereafter in the development authorities. The general state of affairs of
rental housing and the terms of rental contracts suffered due to archaic rental acts in the
states. As a result, rental housing became a second choice thereby affecting the housing
availability for common people. This needs a change.
1.3. Considering the need, in2005, the centrally sponsored program, JnNURM envisaged the
reform in the rental act as a major urban reform. The National Urban Rental Housing Policy
2015 (Draft) was formulated to give way to the formulation of state Rental Housing Acts.
Thereafter the Ministry of Housing and Urban Affairs (MoHUA) released the draft Model
Tenancy Act (MTA), 2019, which aimed to regulate rental housing by a market-oriented
approach while balancing the interests of landowner and tenant at the same time. It aims to
generate, regulate, and address rental housing's current problems, enabling state
governments to frame appropriate Acts. While the previous Rent Control Act, 1948, and
subsequent State-wise Urban Rent Control Actshad various loopholes that resulted in many
issues, straining landlord and tenant relationships and landlords dredging to give their
property on rent, the new MTA aim to bridge this gap.
1.4. For the state of Madhya Pradesh, the existing Madhya Pradesh Parisar Kirayedari
Adhiniyam, 2010 provides the broad framework of the tenancy and its handling. The
Government of Madhya Pradesh, as one of the forward-looking governments, wishes to
bring forth both the Rental Housing Policy and the Tenancy Act in the year 2020/21. This
policy lays the foundation for the provisioning of rental housing in Madhya Pradesh.
1.5. The Madhya Pradesh Rental Housing Policy (MPRHP), 2021, focuses on inclusive access
to rental housing for all social groups. For this, it adopts a multipronged approach including
legal and regulatory measures, the involvement of Private Sector, Cooperative, Non-
Governmental Sector, Industrial Sector (for labor housing), and the Services/Institutional
Sector (for employee housing), to promote rental housing. The Policy seeks to promote
various types of partnerships for the promotion of rental housing.
12. NEED FOR THE RENTAL HOUSING POLICY, 2021
2.1. The need for a comprehensive Rental Housing Policy has arisen due to the lack of
affordable housing for all sections of the society despite vacant inventories in the private as
well as government pool. The need for affordable housing has increased by the shifting
socio-economic landscape such as rising middle class, a large population in urban areas
migrating to cities for livelihood, and households living below the poverty line in urban areas
who cannot afford to buy homes. As per government reports, the urban housing shortage is
estimated at 18.78 million units in India.
2.2. The population of M.P. increased from 6.03 crores in 2001 to 7.26 crores in 2011. The
expected population growth rate of MP over the period 2011-2030 is 27% which is more
than the growth rate of the country (26%). As per census 2011 there are around 10,21,484
vacant houses in Madhya Pradesh and on the other hand there are around 1,46,435
houseless population in the state.
2.3. With the rapidly growing effect of the pull factors of urban spaces of Madhya Pradesh, the
shift from rural to the urban population has raised the demand for housing, and the existing
housing lot is either insufficient or is not affordable by all. This creates a scope for an
alternative option, i.e., rental housing.
2.4. The crucial question is not that the poor households have a demand for ownership, but
whether ownership housing is accessible to them. Rental housing today is an integral part
of the housing tenure systems in cities, towns and villages. It is integral to the stages of a
common man’s upward mobility from rented house to ownership housing. Renting a house
happens to be a pragmatic and deliberate choice due to choices of migration, mobility, and
flexibility in managing household finances at different stages of life.
2.5. Hence, affordable housing must be supported by affordable rental homes so that more
people can be absorbed into the housing ecosystem. With infrastructure status being
accorded to affordable housing, the promotion of rental housing can be an opportunity to
boost the real estate sector for the government as well as private players in Madhya
Pradesh.
2.6. The stakeholders for a rental housing policy i.e., the landlords, tenants, and investors must
be enabled to develop and use rental housing in a flexible way to satisfy their respective
needs and maximize asset values. The flexibility factor makes rental housing an integral
part of well-functioning housing markets. Thus, it becomes an important task for
policymakers to understand the intricacies of the rental housing scenario (both formal and
informal) and formulate effective, flexible policies to regulate and promote such housing.
23. POLICY VISION AND OBJECTIVES
3.1. The Rental Housing Policy envisages the following vision:
Provide a roadmap for the state of Madhya Pradesh for creating an ecosystem of variety of rental
housing which are inclusive, equitable & accessible for all to reduce homelessness and to enhance
investment in real-estate through a transparent and accountable system of governance.
3.2. To achieve such vision, The Rental Housing Policy envisions the following objectives:
3.2.1. Create an enabling environment to provide adequate and inclusive rental housing in cities
and regions of Madhya Pradesh.
3.2.2. Address the challenges faced by various stakeholders in dealing with rental housing by
providing a comprehensive, accessible and enabling legal framework (the owners, tenants,
developers, investors, departments, and agencies).
3.2.3. Facilitate the reduction of homelessness by supplying more affordable rental housing for the
poor and different social groups.
3.2.4. Attract investments in the rental housing sector and ensure the resultant increase of
employment in the affordable housing sector, thereby boosting real estate in Madhya
Pradesh.
3.2.5. Provide an enabling organizational and administrative framework to achieve transparency
and accountability in rental housing.
4. DEFINITIONS1
4.1. “Formal rental housing” means rental housing based on an agreement entered into
between the owner and the tenant, which is registered with the competent authority under
the law for the time being in force;
4.2. “Informal rental housing” means rental housing that is not based on an agreement entered
into between the owner and the tenant, and is not registered with the competent authority
under the law for the time being in force;
4.3. ‘‘Market Driven/Private Rental Housing’’ means rental housing provided by individual
owners or institutions/entities or private rental housing operators (such as hostel owners)
wherein owners finance the construction and management of rental housing, independent
of government assistance;
4.4. “Need-Based Rental Housing” means rental housing based on the need/requirement of
different groups (such as students, teachers, working women/men, nurses, construction
workers, migrants) who have a source of income but find it difficult to afford the rent
towards rental housing;
1The
definitions mentioned except for short duration stay have been referred from the National Rental Housing Policy 2015 by
MoHUA
34.5. “Owner” means a person who, for the time being, is receiving, or is entitled to receive, the
rent of any residential rental premises, whether on his own account or on account of or on
behalf of, or for the benefit of, any other person, or as a trustee, guardian or receiver of any
person/institution who would so receive the rent or be entitled to receive the rent, if the
premises were let to a tenant, and shall include his successor-interest;
4.6. “Public Rental Housing” means social rental housing that is owned by the Government,
local authority or its entities;
4.7. “Property Manager” means a person or company who is employed by the owner to manage
the residential rental premises and who represents the owner in his dealings with the
tenant;
4.8. “Rental Housing” means a property occupied by someone other than the owner, for which
the tenant pays a periodic mutually agreed rent or compensation to the owner;
4.9. “Residential Rental Premises” means any building or part of a building which is or is
intended to be let separately for the purpose of residence of the tenant and includes- (a)
any fixtures and fittings in such premises for the beneficial enjoyment thereof of the tenant;
and (b) the garden, grounds, parking, garage, out-houses, etc. let out along-with the
premises to the tenant;
Explanation: - For the purposes of this definition it is clarified that the definition of
‘residential rental premises’ does not include hotels, lodging houses, dharamshalas or inn
etc. “Shelter” means a covered structure that provides protection from the weather or
danger for lodging of persons on a temporary basis with basic minimum civic facilities such
as water, sanitation, electricity etc.
4.10. “Social Rental Housing (SRH)” means rental housing in which the rent is set at a level
below the market rates to make it affordable for poor people (Economically Weaker Section
&Low-Income Group). It may be owned and managed by the Government, local authorities,
public sector undertakings, non-profit organizations, private or any others charitable
institutions;
4.11. "Short duration stay" means a building or part of a building where lodging with or without
board or other services is provided in exchange of monetary consideration for a minimum
duration of 15 days to 6 months with or without any rent agreements;
4.12. “Incentives” means a payment or concession to stimulate greater output or investment in
rental housing, which may be fiscal and/or non-fiscal incentives (such as grants, low-
interest loans, tax abatements etc.) that promote housing to be accessible to those that
cannot afford market rents;
4.13. “Tenant” means a person who has entered into a rental housing agreement, for any
residential rental premises, with the owner, in lieu of rent payable towards the same. For
4MPRHP, meaning of tenants also include persons requiring any short duration stays (like
boarding house, paying guests, shelter home etc. for fifteen days to six months) in home or
part of it as a basic shelter with or without rental agreements;
4.14. “Below Poverty Line (BPL)” means a person holding a BPL card issued by the State
Government from time to time;
4.15. “Economically Weaker Section (EWS) means households having an annual income up to
Rs. 3,00,000 (Rupees Three Lakhs);
4.16. “Low Income Group (LIG)” means households having an annual income above Rs.3,00,000
(Rupees Three Lakhs) and up to Rs. 6,00,000 (Rupees Six Lakhs) *. *States/UTs shall
have the flexibility to redefine the annual income criteria as per local conditions in
consultation with the Centre.
5. MPRHP POLICY FRAMEWORK
5.1. MPRHP aims to present the intent, principles, provisions, expectations and strategic options in a
sequential manner. The policy presents the following sections covering the provisions and its
outcome
• Guiding principles
• Inclusive target groups and stakeholders
• Rental housing options-
• Demand-side and supply-side interventions
• General provisions
• Roles, Responsibilities and Strategic action plan
• Special feature of the policy
6. GUIDING PRINCIPALS
The MPRHP is based on the following guiding principles complaint with the overall vision of the
state of Madhya Pradesh.
6.1. Inclusiveness: Covering the rental housing need of all sections of people and addressing
the stakeholder’s interests to create such rental housing stocks.
6.2. Transparency and accountability: Inclusion and integration of reform and technological
tools in governance at all levels to maintain transparency and accountability in all
transactions by the stakeholders seamlessly.
6.3. Ease of accessibility by all: Accessibility of people to the rental housing market, its
information, governing authority and enjoying the share of social and financial returns out of
the transactions.
6.4. Institutional, policy and scheme convergence: Horizontal and vertical convergence of
schemes and other policies by the state, central and local government to enhance the
5access to rental housing in a quicker time without hassles of dealing with multiple
departments. MPRHP aims to a collaborative arrangement between govt, private and other
bodies to make meaningful outcomes and fulfilling policy mandates.
6.5. Enhancing the image of the government: MPRHP aims to bring minimal home to even
the socially excluded groups towards strengthening the image of the government in the true
sense.
6.6. Setting up new benchmarks in rental housing: MPRHP conceptualizes multiple
elements of innovations first time in India in a systematic manner and sets the benchmark
for next few decades of rental housing market.
6.7. Addressing present as well as future: The policy must provide the development roadmap
of rental housing market for next few decades with or without few situational revisions.
Thus, it addresses the present need and builds for future generations.
6.8. Boosting private as well as public housing: MPRHP wishes to boost the variety of
public, private and joint ventures beyond the conventional construct of domains of public
and private investments.
7. INCLUSIVE TARGET GROUPS AND STAKEHOLDERS
7.1. The MPRHP, in terms of planning and designing its initiatives, aims to adopt a holistic
approach where housing acts as a vehicle for poverty reduction, social empowerment,
community interaction, and access to health, education and recreational facilities. The five
elements viz., the people, community, local activities, place, and resources are made to the
interface by planning. Keeping these in view, the approach has been made inclusive to
include every section of the society with different needs, affordability, and economic and
social status, and the following target groups are focused upon:
7.1.1. Houseless Population: As per 2011 census, in Madhya Pradesh, the houseless population
accounts for 1,46,435 numbers, which is quite high and needs housing. Rental housing is a
better housing compared to ownership housing considering less and uncertain sources of
income of these houseless people.
7.1.2. BPL, EWS and LIG Population: These groups need to be given access to affordable rental
housing options as a stepping stone to the housing market leading to ownership-based
houses.
7.1.3. PSU/Government Employees: People employed by PSUs or Government Department (both
Central and State), but not provided with accommodation. Characterized as economically
better off than other migrants, this segment depends on low-cost rental housing in the open
market and prefers ownership housing after retirement and can hence be categorized as
potential tenants and aspiring home buyers.
67.1.4. Tenants due to life constraints:
• Slum-dwellers
• Migratory workers, in search of employment
• Working families who have no access to credit because they have low or non-existent credit
records owing to insufficient or irregular income
• Destitute
• Aged Population
• Natural and manmade disaster-affected population
• Socially and economically vulnerable people like deserted women, children etc.
• Defaulted borrowers
7.1.5. Tenants requiring short-duration stay/ Need driven tenants
• Students and exam aspirants
• Single working women or men
• Construction workers
• Relocation due to changed office locations
• Transgender requiring short duration stay
• Hostellers
• Co-living or shared living with or without common facilities
• Patients and patient’s family
• Paying guests
• Single parents
• Long duration tourists/visitors
7.1.6. Tenants by choice:
• Young couples and singles who want to remain mobile and prefer rental home
• Middle- and upper-income professionals who do not desire homeownership
• Students requiring rental accommodation for long term
• Empty nesters who want to downsize after their children have grown
• All other persons who, for work or personal reasons, prefer a shorter-term residence
• Others as identified by the State/ULBs
The MPRHP, aims to address the diverse need of all these target groups in bringing a variety of
housing and shelter options in cities and regions in a systematic market-driven step. However, it is
possible to integrate multiple rental housing options for the above categories in same and similar
housing projects and investments.
77.2. Stakeholders
The policy attempts to address the stakeholder's expectations in a more inclusive and equitable way.
7.2.1. The main stakeholders of the policy are as follows:
• Tenants: Citizens requiring rental shelter of any form for any duration in any stage of their life
• Landlords: Individuals and organisations offering rental house of any scale and to any of the
tenant's group
• Investors and developers aspiring to develop and manage rental housing of any form
• Regulators: Government and competent authorities regulating the rental market and
ensuring the policy mandates
7.3. Preserving Social and Economic interest of Stakeholders
In order to cater to the interest of every target/interest groups and to increase accessibility to housing
for all, the Madhya Pradesh Rental Housing Policy has included the following important provisions:
7.3.1. Making the target groups highly inclusive to bring in every social and economic section in the
framework of tenancy by providing them with suitable and need-driven/market-driven
governmental/non-governmental housing options as per their requirements and affordability.
7.3.2. Serving the needs of tenants requiring short duration stay. This exigency is newly introduced
in this Policy.It shall include the students and examination aspirants, single working women
or men, construction workers, migrants, transgender, hostellers, co-living or shared living with
or without common facilities, patients and patient’s family, paying guests, single parents,
long-duration tourists/visitors-all requiring short duration stay. Accommodating people during
transitory periods of their lives and facilitating housing options that substantially cater to their
needs without various financial commitments, gives a substantive impetus to the Policy.
7.3.3. The MPRHP preserves the social and economic interests of various groups in the following
manner:
Social Interests Economic Interests
✓ Improving productivity: Facilitating ✓ Built to rent: Central and state government
housing options closer to the place of incentives through tax benefits encourage private
work through location-driven rental participation in building affordable rental houses.
housing options having the potential to ✓ Bringing down the property prices: Developers
improve productivity and promote usually incur three major costs - land cost,
entrepreneurship. construction cost, and approval costs. Since land
✓ Enhancing social security: Every costs and construction cannot be reduced directly,
section having accessibility to housing, the competent authority has better leeway in
irrespective of their affordability, reducing the approval costs, bringing down the
increase has their social security cost to developers, and lowering the prices to
secured. home buyers. By making the FSI norms friendlier
8✓ Holistic approach: Including tenants and pragmatic and by lowering the approval costs,
due to constraints on one end and the Government brings down the property prices.
tenants due to choice on the other, ✓ Redevelopment of property: Incentivize the
throw a contrary yet holistic viewpoint. developers to utilize the vacant census houses
✓ Regulates controlled urban growth: besides investing more in the residential
Housing tenants increase population infrastructures and undeveloped urban land for
densities, reducing urban sprawl, and efficient residential development. Also, incentivize
cutting some of the demand for the developers to bring the old properties under
expensive infrastructure in peri-urban the current market rate as well.
areas. ✓ Rationalizing subsidies: Ensure that subsidy
✓ Reduces unlawful capture: An programs are of an appropriate and affordable
adequate supply of reasonably priced scale, well-targeted, measurable, transparent and
rental accommodation reduces the non-distorting to housing markets
temptation of poor families to mount ✓ Creation of institutional owners: Encourage the
land invasions or buy plots in illegal creation of institutional owners such as REITs,
subdivisions. Corporate firms, Not-for-profit entities, Municipal
✓ Reduces pressure on public Housing Companies, PSUs etc.
infrastructure: Eases the operation of ✓ Incentivize the rental agents: Encourage the rental
public transport, given that more people agents to register the tenancy agreement and
are concentrated in a small area and cater to the housing need of the target groups by
most tenants choose to live near bus or providing them attractive incentives.
train routes.
8. RENTAL HOUSING OPTIONS
8.1. The diversity of the target groups having wide variation in their requirements make
opportunities for different rental housing options as follows:
8.1.1. Institutional/Employees Rental Housing: It includes the rental housing for the government
officials and MIG and HIG tenants whose affordability may vary with the market
fluctuations.To be specific, this category belongs to the employees of
Central/State/ULBs/PSUs/NGOs/Corporate houses/industries/private sector institutions.
8.1.2. Social Rental Housing: It includes rental housing for the socially and economically weaker
sections, which includes the BPL, LIG, EWS groups, tenants by constraints, and the
homeless population, helping them with the affordable housing options, considering their
economic and social condition at the time of renting.
8.1.3. Need-Based Rental Housing: It includes housing options for the tenants requiring a short
duration stay, tenants who choose to rent a house out of ‘choice’ rather than compulsion, and
tenants whose needs can be catered only by a variety of rental housing in different locations
of the city. Here, based on their needs and priorities, housing options are made available for
9them.
8.1.4. Location-based or ZonedRental Housing: It includes the rental housing which are
strategically planned in a location to serve a particular segment. Often this comes as an
outcome of city scale land use zoning and controls. Low-income households where less rent
in a preferable location can be incorporated. This will improve the physical, social and mental
well-being of the tenants. The company guest houses, service apartments also come under
this category. Location-based rental housing zones can include any or all of the above
categories.
8.1.5. Minimal shelter for the people with life constraints. This accommodation includes shelter
home, dormitories, rented shop cum home, shared accommodations like night shelters etc.
These homes address the need of the people in slum areas, migrants, working families with
no access to credit, Destitute, Aged Population, disaster-affected population, deserted
women, children, Defaulted borrowers etc. The conventional provider of this category of
rental home is government. However, MPRHP encourages competent bodies to collaborate
with corporates and NGOs with social mandates to contribute in this sector.
8.1.6. Short-duration stay/ Need driven tenants ranging from fifteen days to six months:This
accommodation includes paying guests, boarding lodges, guest houses, service apartments,
hostels, shared/co-living spaces as well. These options cater to students and exam aspirants,
Single working women or men, Construction workers, relocated employees, transgender
requiring short duration stay, Hostellers, Co-living or shared living with or without common
facilities, patients and patient’s family, paying guests, single parents, long-duration
tourists/visitors.
9. DEMAND AND SUPPLY SIDE INTERVENTIONS
The policy aims to indicate the demand-side interventions to enable the tenants to access variety of
rental homes and supply-side interventions to enable the landlords and developers to provide and
mandate rental housing in a sustainable manner.
9.1. The demand and supply-side participants:
Demand Side Supply Side
Includes three major segments from the tenants’ Includes following participants from landlords
perspective: ‘perspective:
✓ Permanent— households settled but unable ✓ Individual landlords –unorganized individual
to buy a house landlords who provide rental housing to
✓ Transient—households/individuals migrating households and individuals
from other parts for the purpose of ✓ Institutional landlords—large companies
employment/education/others andlooking for which provide organized rental housing to
temporary abode (migrants and students) households and individuals
10✓ Captive—households which live in tenements ✓ Hostels/Dormitories—large and small
provided by the employer (governments, providers who offer shared stay primarily to
parastatals and corporates). individuals
✓ Corporate/Captive housing— employers who
provide housing to staff (MoHUPA 2013).
9.2. Facilitating Demand
The following demand-side interventions are envisaged to enable people of all categories and
with all rental housing needs access and avail the benefit of rental housing
9.2.1. Establishing the diverse target groups for rental housing as well as the diverse rental
housing options in subsequent schemes and deliberations of the governments
9.2.2. Title Ownership to property: ensuring that title rights to own and freely exchange houses are
established by law and enforced
9.2.3. Offering innovative housing finance to insecure tenants: Creating healthy and competitive
lending institutions and fostering innovative arrangements for providing greater access to
housing finance in micro modules for the rental housing sector. Linking existing credit subsidy
and guarantee schemes on housing finance in an integrative manner for rental housing is
highly encouraged as well.
9.2.4. Transparency and accountability in recognizing tenants: Recognizing tenants through a
transparent Tenancy Act to ensure accountability on the part of both landlords and tenants.
Rental housing development is required to be compatible with the provisions of RERA and
relevant state policy to ensure the interest of the people.
9.2.5. Rationalizing subsidies: ensuring that subsidy programs do not distort the housing market
and are of an appropriate and affordable scale, well-targeted, measurable, and non-
discriminatory.
9.2.6. REITs, Corporate firms, Not-for-profit entities, Local Housing Companies, PSUs etc. are to be
promoted
9.2.7. Development of competent rent court: The development of competent rent courts by the state
will ensure boththe tenants’ and landlords' right. To ensure greater coverage and speedy
disposal of cases, retired judges may be appointed.
9.2.8. Advance inquiry and requisition of short duration stays and need-based rental housing
through the proposed digital platform to ensure seamless information sharing and
management of Rental housing to be put in place.
9.2.9. Notice period of a considerable time before asking the tenant to vacate the house to enable
him / her explore alternate options within the affordability
9.2.10. Develop and enable Housing Choice Rental Voucher model for MP for dependable tenant
population in select cities in the first stage on a pilot basis. Institutional support may be
11sought to research, develop and steer the first level of such innovative scheme.
9.2.11. Creation of provision for eliminating any form of discriminations while renting by making the
transactions and information-sharing in a transparent way
9.2.12. Setting up of Reference Rent Index to avoid manipulation and speculations. This can be
initiated first for major cities and thereafter other areas as per the need. Such RRI can be
developed by Rent authority created under the proposed new Tenancy Act or similar
organization identified by the state government.
9.2.13. Promote rental-to-own schemes through innovative packages
9.2.14. Provide financial concession to the low-income tenants having high housing cost to income
ratio only in the selective cases. However, MPRHP aims to develop the capacity of the
people to be self-reliant in owning a home.
9.2.15. Integrate the housing allowances of corporates with the rental agreements to ensure
occupancy and stop speculations.
9.3. Provisioning Supply
9.3.1. Providing infrastructure for residential land development: coordinating with the agencies
responsible for residential infrastructure to focus on servicing existing and undeveloped
urban land for efficient residential development. Allow incentives in the land development of
rental housing.
9.3.2. Creating and regulating land and housing development: balancing the costs and benefits of
regulations that influence urban land and housing markets, especially land use and building
and removing regulations that unnecessarily hinder housing supply.
9.3.3. Streamlining the building industry: creating greater competition in the building industry,
removing constraints to the development and use of local building materials, and reducing
trade barriers that apply to housing inputs.
9.3.4. Provide the viability gap funding to the competent developers of rental housing in the initial
phase to develop social rental housing for migrants. A mechanism of reward-oriented
incentives based on the performance of developers by using tradable FAR must be
encouraged by the competent authority.
9.3.5. Making a regulatory framework for initiating a ceiling for maximum limit to owned housing
under any individual ownership and vesting the additional housing units to the government to
reallocate the same as rental housing units to the needy households. This will bring a
balance between the vacant housing and homelessness besides controlling the market
speculation and distortions.
9.3.6. Create space for temporary rentals, short durations stays and subletting. The policy also
encourages the home-shop arrangements in the residential and mixed-use zones as
12permissible by the prevailing development/statutory plan of the city or the regions.
9.3.7. Bring forth the large pool of vacant houses under government and private ownership under
the rental housing programme.
9.3.8. Bring more market-oriented and flexible land use planning regime to promote rental housing
projects in viable locations. Use of FAR portability and FAR banks can be a great tool for the
planning and development authority in keeping balance of built units and infrastructure
holding capacity.
10. GENERAL PROVISIONS
10.1. The following are the recommended POLICY PROVISIONS/POLICY VERTICALS –
• Provide transparent and accessible Legal Framework
• Prioritize Poor and Social Groups for access to rental housing
• Attract investments in Rental Housing
• Strengthen Organizational and Administrative Framework
10.2. Provide transparent and accessible legal framework
10.2.1. Bring forth the Madhya Pradesh Model Tenancy Act 2020 (Draft)
10.2.2. Hierarchy of judicial tribunal: Setting up the jurisdiction for the Rent Court followed by that of
the Appellate Rent Authority
10.2.3. Registration of Tenancy Agreement with the Rent Authority
10.2.4. Registration of rental agents with the Rent authority
10.2.5. The development of competent rent courts by the state to ensure tenants’ and landlords' right
and secure greater coverage and speedy disposal of cases
10.2.6. Do away with the overlapping of commercial and rental leasing laws and ensure that the
property remains under the state until the end of the leasing contract
10.2.7. bring the of the property for the tenants by ensuring that rights to own and freely exchange
houses are established by law and enforced
10.2.8. Convergence of tax systems related to rental and ownership-based housing to streamline
transactions.
10.3. Prioritize poor and social groups for access to rental housing
10.3.1. Transparent identification of Social Rental Housing (SRH) groups covering BPL, LIG, EWS
and helping them with the affordable housing options through proper enrollments of
beneficiaries
10.3.2. Making a regulatory framework for initiating a ceiling for maximum limit to owned housing
under any individual ownership and vesting the additional housing units to the
government to reallocate the same as rental housing units to the needy households.
10.3.3. Provide financial concession to the low-income tenants having high housing cost to
13income ratio only in the selective cases.
10.3.4. Encourage building mass rental housing for socially vulnerable sections under Corporate
Social Responsibility (CSR)
10.3.5. Reserve a certain percentage of newly build flats/units and of FSI/land within large housing
projects at affordable rent especially for SRH (of a certain size and scale) in master plans as
well as in housing projects
10.3.6. Provide incentives to the landlords like exemption from stamp duty, registration charge, etc.
to smoothen 11 months’ rent agreement besides boosting Social Rental Housing (SRH)
projects
10.3.7. Encourage Public-Private Partnership (PPP), Special Purpose Vehicle (SPVs), Residential
Rental Management Companies (RRMCs) to design programs/schemes for creation of
Social/Need-based Rental Housing
10.3.8. Grant exemption from property tax for a predefined period (say for 5 to 10 years) to Social
Rental Housing properties
10.3.9. Make affordable shelter available to women and transgenders working in the informal sector
10.3.10. Advice Municipal Housing Companies to create social/need-based rental housing stocks
and undertake the construction of affordable rental housing to promote socially diverse
neighborhoods
10.4. Attract investments in rental housing
10.4.1. Create healthy and competitive lending institutions, and foster innovative arrangements for
providing greater access to housing finance in micro modules for the rental housing sector
10.4.2. Encourage REITs, Corporate firms, Not-for-profit entities, Municipal Housing Companies,
PSUs etc. for maximum utilization of their investments towards social/need-based rental
housing
10.4.3. EncouragePublic-Private Partnership (PPP), Special Purpose Vehicle (SPVs), Residential
Rental Management Companies (RRMCs) to earmark their budgets
10.4.4. Identify funding sources along with dovetailing of CSR and other funds (LabourCess funds)
etc. for creation of social/need-based rental housing
10.4.5. Create greater competition in the building industry by removing constraints to the
development, using local building materials, and reducing trade barriers that apply to housing
inputs
10.4.6. Provide the viability gap funding to the competent developers in the initial phase to develop
social rental housing for migrants
10.4.7. Provide income tax relief in proportion to investments in newly built rental housing given for
rent for a definite tenure
1410.4.8. Promote Residential Rental Management Companies (RRMC) to bring efficiency especially
in operation, maintenance and management of large-scale rental housing projects/schemes
10.4.9. Provide concessions and incentives to investors and builders to invest more on low-income
rental housing to promote affordable housing for LIG/EWS
10.4.10. Provide concession on lands (sometimes free of cost) under certain circumstances to the
developers as a part of government equity contribution to complete the mass housing project
at for a limited period
10.5. Strengthen organizational and administrative framework
10.5.1. Facilitate the introduction of Rent-to-Own scheme both by the public and private sector.
10.5.2. Government at all levels to act as an enabler and facilitator to promote rental housing through
policies and regulations
10.5.3. Encourage the institutional owners such as REITs, Corporate firms, Not-for-profit entities,
Municipal Housing Companies, PSUs etc.towards the construction of rental housing
10.5.4. Enable Housing Choice Rental Voucher for dependable tenant population
10.5.5. PrepareReference Rent Index to avoid manipulation
10.5.6. Coordinate withthe agencies responsible for residential infrastructure to focus on servicing
existing and undeveloped urban land for efficient residential development
10.5.7. Promote Information technology (IT) enabled platforms for accessing information on rental
housing stock and also reduce transaction costs and informality through IT-enabled platforms
10.5.8. Create provision for temporary rentals and subletting
10.5.9. FacilitateHousing and Development Boards to borrow from Central Provident Fund and
NSDL for the purchase of housing units
10.5.10. Reserve certain percentage of newly build flats/units and of FSI/land within large housing
projects at affordable rent especially for SRH (of a certain size and scale) in master /
statutory plans as well as in housing projects
10.5.11. Create provisions to bring all old (of certain age to be decided) rented properties under the
current market rate to avoid the exploitations of the landlords and loss of revenue to the
State.
10.5.12. Increase housing stock through involvement of private sector by providing incentivized
floor space index (FSI) and use of tools like, transfer of development rights (TDR)
10.5.13. Encourage Public-Private-Peoples-Partnership (PPPP) to undertake Integrated Housing
and Township Projects
10.5.14. Interfaces with other policies and schemes: The policy, guidelines and schemes of housing
and relevant services need to be integrated while any of the rental housing is implemented.
1511. ROLES AND STRATEGIC ACTION PLAN
The roles, responsibilities and actions of the Central and State Government along with other
agencies in promoting rentals housing shall be as follows:
11.1. Central Government
The roles, responsibilities and activities of the Central Government which can facilitate the policy
provisions and objectives are given below:
11.1.1. Encourage the creation of Residential Real Estate Investment Trust (RREITs).
11.1.2. Provide incentives to the states/private sector/implementing agencies to develop and
implement innovative practices in the rental housing sector.
11.1.3. Grant and facilitate income tax concessions for mass rental housing.
11.1.4. Provide income tax relief in proportion to investments in newly built rental housing for a
definite tenure
11.1.5. FacilitateHousing and Development Boards to borrow from Central Provident Fund and
NSDL for the purchase of housing
11.1.6. To address the need for affordable housing, the Ministry of Housing & Urban Affairs has
initiated Affordable Rental Housing Complexes (ARHCs), a sub-scheme under Pradhan
Mantri AWAS Yojana- Urban (PMAY-U) to provide ease of living to urban migrants/ poor in
the industrial sector as well as in non-formal urban economy to get access to dignified
affordable rental housing close to their workplace. The initiatives under this scheme may be
replicated under PMAY(U) in Madhya Pradesh.
11.1.7. The expected activities of the central government can be further categorized as:
Administrative Investments and Financial Capacity Building
• Create infrastructure for • Extend fiscal and non-fiscal • Encourage building mass
residential real estate concession for rental rental housing either for
establishments housing including that own employees or for other
• Develop economically viable underPPP socially vulnerable sections
rental housing models (such • Provide monetary of society under Corporate
as Rent-to-Own Scheme, incentives to the Social Responsibility
Shared Ownership Scheme, states/private (CSR), by allowing 100%
PPP Model, Rental Voucher sector/implementing tax deduction of the capital
Scheme, Rental Allowance agencies to develop and expenditure incurred
Scheme etc.) execute innovative • Establish Residential Real
• Develop linkage of Housing practices in the rental Estate Investment Trust
and Development Boards with housing sector (RREITs)
Central Provident Fund / • Grant and facilitate income
NSDLfor purchase of housing tax concessions for
units institutional owners that
create mass rental housing
1611.2. State Government
The roles, responsibilities and activities of the State Government for this policy is vital and pivotal in
addressing the aims and objectives of this policy. The state government shall:
11.2.1. Promote the registration of the agreement between the landlords and the tenants to ensure
transparency in the entire rental processes, where the type of property must be indicated.
11.2.2. Provide incentives to the landlords like exemption from stamp duty, registration charge, etc.
to smoothen 11 months’ rent agreement besides boosting Social Rental Housing (SRH)
projects.
11.2.3. Ensure that the tenants are not served with vacation – notice by the landlords at the time of
national crisis (as in case of disaster/ pandemic/ lockdown/ etc.)
11.2.4. Together with the ULBs, create provisions to bring all the old rented properties of more than
ten years under the current market rate to avoid the exploitations of the landlords and loss of
revenue to the State.
11.2.5. Ensure and promote the registration of the rental agents and incentivize them with
commissions to smoothen the process of rental-registration.
11.2.6. Exempt property tax for Social Rental Housing properties.
11.2.7. Plan out strategies for land monetization and appropriate use of vacant/locked properties in
consultation with various stakeholders through various options/alternatives.
11.2.8. Ensure a strong and transparent dispute redressal architecture to resolve the disputes
between landlords and tenants with a defined hierarchy, namely, - Rent Authority, Rent Court
and Rent Appellate Authority.
11.2.9. Build capacity of various stakeholders in the planning and implementation of housing
projects/schemes with special focus on Rental Housing.
11.2.10. Encourage corporate houses, charity organizations, RWAs, NGOs to initiate rental housing
projects targeting the urban poor and other social groups.
11.2.11. Encourage the formation of cooperative societies, municipal housing companies,
neighborhood associations, not-for-profit entities or other entities that would create, operate,
maintain, and manage rental housing stock.
11.2.12. Determine a fair security deposit amount at the time of renting, using some definite formula
to avoid any disagreement between landlords or tenants.
11.2.13. Increase investment and maintenance fund for government-owned rental units.
11.2.14. Do away with the overlapping of commercial and rental leasing laws and ensure that the
property remains under the state until the end of the leasing contract.
11.2.15. Encourage state co-financing of housing projects.
11.2.16. Finance social rental housing through long term loans and a variety of incentives
1711.2.17. Provide concession on lands (sometimes free of cost) under certain circumstances to the
developers as a part of government equity contribution to complete the mass housing project
fora limited period.
11.2.18. Increase housing stock through the involvement of the private sector by providing
incentivized floor space index (FSI) and use of tools like transfer of development rights (TDR)
11.2.19. Encourage Public-Private-Peoples-Partnership (PPPP) to undertake Integrated Housing
and Township Projects
11.2.20. Encourage the ULBsto give top priority to housing projects for EWS.
11.2.21. Government can provide rental housing at a fixed price in particular areas of a city for the
low-income group.
11.2.22. Landlords who provide rental housing to target groups like transgenders, single women
and men, old couple, students should be incentivized through the policy.
11.2.23. State government may ponder over utilizing construction cess for rental housing.
11.2.24. In summary, the activities of the state government can be further categorized as:
Administrative Legal Financial Capacity Building
• Create an online • Set a hierarchy of • Provide incentives to • Reserve a percentage
portal for transparent executive tribunal the landlords of newly built large
interfaces • Promote • Exempt property tax housing for SRH
• Increase housing registration of rent for SRH • Build capacity of various
stock through the agreement and • Create provisions for stakeholders
involvement of rental agents fixing security deposit • Enable employers to
private sector by through Rent • Invest in social rental offer rental housing to
providing Authority housing through long- their employees
incentivized FSI and • Do away with the term loans • Build capacity of
use TDR overlapping of • Advice ULBs to treat corporate houses and
• Create provisions for commercial and the SRH properties as NGOs to initiate rental
Public-Private- rental leasing laws residential properties housing projects at
Peoples-Partnership • Promote for tax concession cheaper costs
(PPPP) to undertake contribution of • Encourage formation of
Integrated Housing government equity cooperative societies to
and Township in the form of giving manage and maintain
Projects in semi- land on concession rental housing stocks
urban / urban areas to the developers
11.3. URBAN LOCAL BODIES (ULBS)
The roles, responsibilities and activities of the Urban Local Bodies shall be to:
1811.3.1. Implement the state policies on rental housing by assessing the present situations and
analyze and plan for further strategies for its implementation
11.3.2. Identify the target groups, the vacant houses, and properties and total requirements for
social/need-based rental housing with the support of State Government
11.3.3. Fix standard rent for various localities and ensure transparency on the deviation of standard
rent from the market rate
11.3.4. Create provisions to bring old rented properties of more than ten years under the current
market rate
11.3.5. Create an efficient and effective online portal for redressing the dispute between different
parties (landlords, tenants and rent authority)
11.3.6. Promote socially diverse neighborhoods
11.3.7. Simplify the registration of the rent agreement and reduce the informality by rationalizing
transaction costs in rental housing
11.3.8. Construct new municipal rental housing stocks
11.3.9. Create an inventory of land bank in each ULB to assess the need for providing land for rental
housing.
11.3.10. Landbank system can be ULB-led partnership with the land revenue department
11.3.11. Other agencies such as the MP Housing and Infrastructure Development Board, Town and
Country Planning department etc. should work in coordination with the ULB
11.3.12. To discourage vacant accommodations, some tax concessions may be given, like
exemptions in the property tax for the first few years.
11.3.13. In summary, the activities of the ULBs are further categorized as:
Administrative Capacity Building
• Assess the present situations before implementing the • Build capacity of the Housing
State Housing Policies Companies/developers working
• Identify the target groups and vacant houses at the local level to create
• Fix standard rent based on location, if required social/need-based rental housing
• Prioritize strategies to manage rental housing stocks stocks
• Bring old rented properties under current market rate • Advice Housing Companies to
• Develop PPP projects for the creation of rental housing construct affordable rental
stocks housing to promote socially
• Simplify registration process diverse neighborhoods
• Construct new municipal rental housing stocks
11.4. Rent Court and Appellate Rent Authority
The roles, responsibilities and activities of the Rent Court and Appellate Rent Authority shall be
governed as per the proposed Madhya Pradesh Tenancy Act 2021 (draft).
1911.5. Role of State Housing and Infrastructure Development Board and Other Agencies
11.5.1. The role of M.P.State Housing Boards shall be revamped. It needs to be encouraged to focus
on playing a more active role in the provision of rental housing, even if it is through public
private partnerships.
11.5.2. Funds raised through the sale of land transactions by M.P. State Housing Boards must be
ring-fenced, with a defined proportion to be redeployed only for rental housing. For this,
formulating a fiscal and financial framework is needed that would help provide a boost to
rental housing without compromising the basic canons of sound financial principles
11.5.3. Innovative models for rental housing such as those developed in other states may be
adopted
11.5.4. ‘Facilities Management model’, under which a facility management company is given the
contract for the property management function of rental housing stock need to be adopted
11.5.5. ‘Arm’s Length Management Organisation (ALMO) model, which involves an ALMO and an
independent regulator may be adopted
11.5.6. ‘Housing Association model’, which involves the formation of a housing association which is
regulated by the independent regulator may also be adopted
11.6. Role of Private Sector And PPP
11.6.1. Innovative models for provision of Rental Housing
A) Enterprise Model
Registered private companies/enterprises that provides rental housing solutions to low-
and middle-income group customers for short-term stays through formal hostels and
paying guest accommodation can be registered under the Rent Authority.
B) PPP Model
PPP modelis built upon the strengths of both public sectors (in terms of land acquisition,
development permissions and obtaining clearances) and private sector (investment capital,
construction and maintenance).
PPP models can utilize cross-subsidizing the MIG and LIG units by giving some land
outside the project area for commercial activities like IT/ITeS.
C) Private-Private Joint Ventures
Joint ventures private sector companies for rental housing shall be promoted and
incentivised. Such initiatives can be adopted for employee housing, wherein a part of the
housing units developed can be given to employees and some sold in the open market to
earn profits.
D) Maintenance of Rental Housing Schemes
Private players should be encouraged and given maintenance contracts for rental housing
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