Page 58 - SHELTER

POLICY REVIEW
been assumed for the financial
viability analysis.
Incentives for ARHC
concessionaires include
allowance of 50 percent
additional Floor Area Ratio
(FAR) without any additional
cost. Earnings and profits from
ARHCs will be exempt from
income tax and GST. Municipal
service charges and property
tax will be levied at par with
residential properties which are
not rented out. All ARHCs are
to be out of purview of existing
rental acts and be governed
as per the provision of model
tenancy act (MTA), discussed in
the next section. Convergence
is sought to be achieved with
other government missions
such as Smart Cities, AMRUT,
Swachh Bharat Mission, NULM,
Ujjwala, Ujala, Make in India,
Atal Innovation Mission and
Skill India Mission.
ARHCS – A FEW
SUGGESTIONS
A few points need to be kept
in mind for ensuring greater
efficacy of this scheme. First,
given the wide set of targeted
beneficiaries comprising EWS,
LIG households including
migrants and students, catering
to the interests of the urban
households below the poverty
line needs to prioritised. It is
suggested that ARHC should
reserve a specific number of
units in each ARHC for urban
7 https://www.taxpolicycenter.org/briefing-book/what-low-income-housing-tax-credit-and-how-does-it-work
56 HUDCO-HSMI Publication
poor households at a lower
rent than what is payable
by the other beneficiary
households. Financial viability
of the ARHCs have to be
ensured at rents affordable
for such households through
other funding mechanisms. In
a well-functioning market set-
up, mechanisms such as ‘rental
vouchers’ in use in USA and
Canada, targeting the urban poor
can be implemented. ‘Rental
vouchers’ schemes which are MODEL TENANCY ACT
essentially subsidies provided (MTA)
to poor renters for renting in
formal housing markets, will
increase the supply of rental
housing and incentivise owners
of vacant houses to rent out and
make formal housing accessible
to the urban poor. As the rental
market matures further with
institutional suppliers of rental
housing including ARHCs
coming into the picture, supply
side schemes such as Low Income
Housing Tax Credit (LIHTC) of
the USA can be explored. LIHTC
scheme essentially provides tax
incentives to developers and
investors of affordable rental
housing in the form of redeemable
tax credits and is issued by USA
government. Second, checks
should be carried out at regular
intervals to ascertain continued
eligibility of households to
continue as beneficiaries of the
scheme. Third, any supply side
effort such as ARHCs needs to
be supplemented with measures
which improve livelihood
and education outcomes
of beneficiary households.
Provisioning of schools and
skilling centres as a part of the
ARHC will go a long way in
improving long term welfare of
these households. Last but not
the least and most importantly,
all ARHCs should be located
close to existing employment
centres of the beneficiary
households.
Lack of transparency in rental
markets coupled with poor
institutional support are a major
factor hindering universal access
to housing in Indian cities.
About one-tenth of urban houses
were vacant as per Census 2011.
Registered rental leases are
typically regulated either by the
state rent control laws or the
Transfer of Property Act, 1882.
Often, archaic rent control laws
have ended up being misused
resulting in a rental housing
market which functions outside
of the existing rental regulations.
In case of middle- and higher-
income households, rental
arrangements between landlords
and tenants are usually in the
form of unregistered ‘leave
and license’ agreements of
duration up to 11 months,
which are outside the purview
of the aforementioned rental
regulations. Indigenous methods
such as pagdi circumvent these
regulations.
As
discussed