Daily Current Affairs for UPSC IAS
UPSC Current Affairs: Rent issues & Affordable Housing
UPSC Syllabus: Prelims: Social Justice | Mains – GS Paper II – Social Justice
Context: Amid ongoing hardship, the problem of non-payment of rent especially by families belonging to the lower strata of society has emerged. Non-payment of rent can be directly associated with loss of income during the present hardship which is been faced by people who mostly works in the informal sector of the economy or who are employed on daily wages. Rent crisis hurts the Informal workers disproportionately because unlike formal work force they don’t have regular income source and they are neither provided with accommodation like public sector employees.
The Problem of Rent for informal workers
- The Article highlights that in any kind of crisis, the issue of rent does not get as much attention as food and income support do.
- Domestic workers in Jaipur, Rajasthan, have begun reporting to the Rajasthan Mahila Kamgar Union (RMKU) that landlords are not in favour of waiving off rent this time as compared to last year.
- Surveys have revealed that:
- Rent of such sections of the society (mostly working in the informal sector) formed 40 per cent of average expenses during first lockdown.
- Rent is a majority component of debt post the lockdowns, and
- Rent has been a key component of the vulnerability of urban workers.
- Above mentioned aspects of rent crisis is not only the problem of domestic workers but inability to pay rent was one of the main reasons cited by migrants in their decision to leave cities and walk along highways last year.
Order from Ministry of Home Affairs
- Where ever the workers, including the migrants, are living in rented accommodation, the landlords of those properties shall not demand payment of rent for the period of one month.
Problems with the Order from MHA
- The order was vague as it did not clarify whether the landlord should defer or delay rent collection or waive off the completely for certain period of time.
- It offered no relief or alternate compensation to the landlords.
- It offered relief only for one month whereas loss of job for many in the informal sector was for more than one month.
- Most landlords relied on rental income for their own sustenance, hence some of them did not waive off rent even in the last year’s lockdown.
- Most of the Rents were unenforceable due to lack of proper Rent Agreements.
- In most cases, it was the tenants who had to negotiate with their landlords and request for leniency.
Hardships faced by Informal Workers to pay Rent
- Some landlords waived off rent for a month or two while others agreed to defer the rent. A few made no compromises and expected the rent to be paid on time, sometimes employing threats and coercion.
- Domestic workers had to make difficult trade-offs, redirecting money reserved for necessary expenses such as food, school fees, and life savings to be able to pay rent and retain a roof over their heads.
- With pending rent and school fees worsening with no money coming in, many domestic workers had to borrow from informal moneylenders. This further led them into debt trap as these informal money lenders charge very high rate of interest.
- Even in cases where the rent was deferred, it led to a piling up of debts for domestic workers who took more than a few months to get even a part of their jobs back.
- Some domestic workers borrowed from their employers, on the condition of paying it off with their work over the next few months, which meant a further paucity in income.
- So, in this context it is imperative to learn lessons from the migrant crisis of last year to protect the rental housing of informal workers early, effectively, and expansively.
Rent is important especially for permanent migrants who have settled in urban cities
- Rent is an important part of lives for such families in the informal sector who have settled for a substantial period of time in any city and do not consider themselves as migrant.
- For such families, returning back to their villages is not an option because of their investment in the city. Also because their children study in schools.
- Further, such families lack necessary skills for agricultural employment and have lost social contact in their villages.
- These families can be still be considered migrant as they are excluded from state government programmes as they are not registered in their state due to lack of ration cards.
- Thus, for such families, whose main bread earners work in the informal sectors for decades, Rent must be seen as a key part of the urban social safety net, as critical as food and wage.
- A moratorium should be announced with a clearer enforcement mechanism and a clear distinction between deferment and rent waivers.
- Landlords should be offered means to access partial compensation for lost rent from the state shifting the onus onto them rather than on workers.
- Cash transfers being conceptualised by many State governments must treat “rent” on a par with food and income support.
- The amount of cash transfer for rent support can be estimated on the basis of the rental market conditions.
- States can also aid workers through limited waivers on utility expenses such as waiving off electricity bills, water charges etc.
Challenges that impede the growth of affordable housing sector in urban areas:
- Rigid rental laws and high property taxes have led to the decline of formal rental housing and driven the sector into informal housing arrangements. These informal arrangements don’t protect the tenant from illegal evictions and high rents
- Land use regulation is stringent, limiting affordable housingsupply
Ex: Floor space index is very low in India
- Property rights are weak as land records do not guaranteeownership(In India, land titles are presumptive in nature), constraining housing supply.
- Inadequate housing credit to Low Income groups (LIG) because of their weak credit worthiness and low disposable incomes
- Transaction costs, especially stamp duties levied by states on the sale of immovablepropertyare high
- I) Pradhan Mantri Awas Yojana (Housing for All – Urban)
Objective: The Mission addresses urban housing shortage among the EWS/LIG and MIG categories
Beneficiaries: Economically weaker section (EWS), low-income groups (LIGs) and Middle Income Groups (MIGs). The annual income cap is up to Rs 3 lakh for EWS, Rs 3-6 lakh for LIG and Rs 6 -18 lakhs for MIG
In-situ Slum Redevelopment (ISSR):
This vertical will be implemented with a concept “Land as a resource” with private sector participation for providing houses to eligible slum dwellers. Central Assistance of Rs. 1 lakh per house is admissible for all houses built
Credit Linked Subsidy Scheme (CLSS):
Beneficiaries of EWS, LIG and MIG seeking housing loans from Banks,are eligible for an interest subsidy of 6.5%, 4% and 3% respectively
Affordable Housing in Partnership (AHP):
Central Assistance of Rs. 1.5 Lakh per EWS house is provided by the Government of India for houses built by private players. States also extend other concessions such as land at affordable cost, stamp duty exemption etc.A housing project will be eligible for Central Assistance, if at least 35% of the houses in the project are for EWS category
Subsidy for Beneficiary-led individual house construction:
Central Assistance upto Rs. 1.5 lakh per EWS house is provided to eligible families belonging to EWS categories for individual house constructed by themselves
Affordable Rental Housing Complexes (ARHCs) for Migrant Workers/ Urban Poor:
- A sub-scheme under Pradhan Mantri Awas Yojana – Urban (PMAY-U) initiated in the wake of reverse migration of urban migrants, during COVID pandemic, to save cost on housing
Beneficiaries: Beneficiaries for ARHCs are urban migrants/ poor from EWS/LIG categories comprising of street vendors, rickshaw pullers and other service providers, industrial workers along with migrants working with market/ trade associations, educational/ health institutions, hospitality sector, long term tourists/ visitors, students or any other category.
The ARHC scheme will be implemented through two models:
- i) Utilizing existing Government funded vacant houses to convert into ARHCs through Public Private Partnership or by Public Agencies
ii)Construction, Operation and Maintenance of ARHCs by Public/ Private Entities on their own vacant land
- II) Draft Model tenancy ACT 2020:
The Ministry of Housing and Urban Affairs has prepared a ‘Draft Model Tenancy Act, 2020(MTA)’ with the objective of balancing the interests and rights of landlords and tenantsto create a more efficient and transparent Rental market in Housing sector.
(It is a draft act because land and urban development is a state subject)
- All premises (residential or commercial) shall be rented only after a written agreement on mutually agreed terms (No more informal arrangements)
- MTA caps the security deposit payable by the tenant to a maximum of two (2) months in the case of residential premises and to a maximum of six (6) months in the case of non-residential premises.
- No landlordshall withhold any essential supply or service in the premises occupied by the tenant
- Restriction on Sub-Letting by tenant
- Rent Authority: An officer of the rank of deputy collector or higher will act as rent authority to adjudicate any issue arising out of a rental disagreement
- Rent court and Tribunal: Additional District Magistrate or an officer of equivalent rank shall be the Rent Court for the purposes of this Act, within his jurisdiction. District Judge to be appointed as Rent Tribunal in each district
Conclusion: Directive Principles of State Policy encourages the State to secure, among others, a decent standard of living for all. This goal cannot be achieved without providing adequate and affordable Housing to the marginal section of the society. Urban safety nets must bring together food, income and rent so that no person should be forced to live destitute life because of any kind of hardships.