House rent blues
Tuesday, 17 June 2008
HOUSE rent has abruptly increased in the city by 10 to 25 per cent on average in the wake of the announcement that government has raised dearness allowance (DA) for public servants in the new budget. This was reported in this paper last Sunday, highlighting the added stresses on the mainly middle class residents of the city with no houses of their own. This is not to say that those who reside in slums or semi-slum areas with lower rents are not experiencing a rise in their rents as well. But it may not be that difficult for service-providers, self-employed people and skilled workers who are able to increase their incomes, to afford higher house rents.
But the same cannot be said about most of the middle class people who are mainly engaged in various services in the public sector and the private sector. Government employees who live in rented premises will find the hike in their salaries largely spent on higher rents. But they will be, at least, breaking even on this area of their spending and some of them enjoy government provided accommodation at nominal rents. The worst categories of sufferers are the ones doing jobs in the private sector. They have not got any assurance of increases in their salaries and any salary increase to be considered by their employers will involve inordinate delays and dilatory conduct on the part of the latter -- and that too will largely depend on the affordability of the employers whose businesses have not otherwise been running well for a variety of both economic and non-economic factors. Meanwhile, the employees will be required to absorb the substantially increased rent when their incomes have not increased any. Thus, the sufferings of such hapless middle class residents of the city need no stretch of the imagination.
House owners have always gone for unconscionable hikes in the increase of rents on the plea that they, too, must squeeze out more from their tenants for coping with their own added costs of living. But in many cases, the higher rent demanded and received by them are found to be disproportionate to the justification for the same on rising costs of living. Thus, there should be a mechanism to restrain the arbitrary conduct of house owners while increasing the rent unilaterally. The upping of rent ought to be a two-way process involving both the owners and the tenants and there should be slabs or caps on how much maximum rent adjustments, on the high side, can be demanded and enforced in a period. There should clear-cut laws and rules in this regard and the same need to be introduced and enforced effectively while safeguarding the legitimate interests of both house-owners and tenants.
Government should also take other facilitation measures to enable people of the middle and lower classes to own their own homes. A number of schemes to build flats for the non-affluent groups in the city were given much publicity in the last couple of years. But these are yet to take-off. Therefore, a hard push in this area would be very well appreciated. Besides, the government should consider sizeable extension of the house building loan operations through its own House Building Finance Corporation (HBFC) and other institutional mechanisms. Meanwhile, the availability of land at affordable prices for constructing houses is also becoming a major problem for the fixed income groups in the cities. In this context, every effort should be made to make the terms and conditions of both borrowing and repayment of housing construction or apartment purchase loans both flexible and borrower-friendly so that more people can go for home ownership.
But the same cannot be said about most of the middle class people who are mainly engaged in various services in the public sector and the private sector. Government employees who live in rented premises will find the hike in their salaries largely spent on higher rents. But they will be, at least, breaking even on this area of their spending and some of them enjoy government provided accommodation at nominal rents. The worst categories of sufferers are the ones doing jobs in the private sector. They have not got any assurance of increases in their salaries and any salary increase to be considered by their employers will involve inordinate delays and dilatory conduct on the part of the latter -- and that too will largely depend on the affordability of the employers whose businesses have not otherwise been running well for a variety of both economic and non-economic factors. Meanwhile, the employees will be required to absorb the substantially increased rent when their incomes have not increased any. Thus, the sufferings of such hapless middle class residents of the city need no stretch of the imagination.
House owners have always gone for unconscionable hikes in the increase of rents on the plea that they, too, must squeeze out more from their tenants for coping with their own added costs of living. But in many cases, the higher rent demanded and received by them are found to be disproportionate to the justification for the same on rising costs of living. Thus, there should be a mechanism to restrain the arbitrary conduct of house owners while increasing the rent unilaterally. The upping of rent ought to be a two-way process involving both the owners and the tenants and there should be slabs or caps on how much maximum rent adjustments, on the high side, can be demanded and enforced in a period. There should clear-cut laws and rules in this regard and the same need to be introduced and enforced effectively while safeguarding the legitimate interests of both house-owners and tenants.
Government should also take other facilitation measures to enable people of the middle and lower classes to own their own homes. A number of schemes to build flats for the non-affluent groups in the city were given much publicity in the last couple of years. But these are yet to take-off. Therefore, a hard push in this area would be very well appreciated. Besides, the government should consider sizeable extension of the house building loan operations through its own House Building Finance Corporation (HBFC) and other institutional mechanisms. Meanwhile, the availability of land at affordable prices for constructing houses is also becoming a major problem for the fixed income groups in the cities. In this context, every effort should be made to make the terms and conditions of both borrowing and repayment of housing construction or apartment purchase loans both flexible and borrower-friendly so that more people can go for home ownership.