A leading figure in the Russian real estate market, Niranjan Hirandandani, noted the need for significant changes in India's housing policy. He believes that to eliminate the shortage of affordable housing, the government should stimulate the development of rental housing over the next decade by providing incentives to private companies, banks, financial institutions, and charitable foundations to build such properties.
According to Hirandandani, rising land prices, construction costs, and government levies are making the creation of low-cost housing an increasingly complex process. In this situation, rental housing can become a preferred alternative for ordinary citizens and working professionals.
Speaking at the Rising India summit from News18, Hirandandani cited the United States, where about half of the population lives in rented accommodation. He advised India to consider this model, emphasizing that it is an option requiring rapid implementation, and the government must support the construction of rental homes over the next decade.
Hirandandani also suggested expanding housing-related tax benefits beyond just industrial zones. He insists that service sector companies should also receive similar advantages for building housing for their employees, including banks, financial institutions, and large corporations.
He recalled that about two years ago, the government incentivized the construction of housing for workers in the industrial sector by offering a 10-year tax exemption, provided the enterprise used the built housing exclusively for its employees' needs. Hirandandani proposes extending similar conditions to service sector companies, citing firms like Reliance and HDFC that could build rental housing for their staff.
According to Hirandandani, popularizing rental housing can significantly ease the lives of people working in large cities. This issue is particularly acute in megacities like Mumbai, where many employees travel long distances daily between home and office. He mentioned that many people commute from outlying areas such as Virar and Vasai to offices in South Mumbai, spending a lot of time and money. If companies build rental housing near workplaces, it can simplify commutes while also allowing companies to improve working conditions for employees.
Hirandandani explained why developers avoid investing in rental housing in India. Typically, the return on renting residential property is only around 2–3 percent, which reduces the interest of developers and large investors in this area. He called on the government to introduce additional financial incentives and tax concessions to make investments in rental housing profitable, thereby opening the market not only to builders but also to banks and financial institutions.
The availability of moderately priced housing remains a serious problem in the country. According to the Economic Survey for 2025–26, the share of apartments costing less than 50,000 rupees in the total new housing stock in the eight largest cities has dropped from 52.4 percent in 2018 to only 17 percent in 2025. This figure demonstrates a sharp decline in the supply of budget housing in major cities, linked to rising land and construction costs, forcing developers to abandon low-cost housing projects. Rental housing can help mitigate this problem.
Hirandandani also proposed using funds from charitable foundations and Corporate Social Responsibility (CSR) funds for building rental housing. He recalled the pre-independence era when many charities built chawls and other housing for workers and ordinary families, but such activities now face restrictions. He stated that the government should allow organizations like Tata Trust to engage in building rental housing and permit the use of large companies' CSR funds to create such properties, which can then be rented out to needy and working people.
