Prominent real estate developer Niranjan Hiranandani has called for a significant shift in India's housing policy, urging the government to incentivize rental housing for the next decade. Speaking at News18's Rising Bharat Summit, Hiranandani emphasized the critical role private companies, banks, financial institutions, and charitable trusts could play in constructing much-needed accommodation for working professionals.
Hiranandani highlighted that traditional affordable housing models are increasingly difficult to implement due to escalating land prices, construction costs, and government charges. He proposed rental housing as a pragmatic and immediate solution to combat the country's worsening housing affordability crisis.
Learning from Global Models
Citing the United States, where approximately 50% of the population resides in rental housing, Hiranandani stressed the urgency of adopting similar strategies. He warned that continued reliance on homeownership-centric affordable housing models is unsustainable and that a swift government response is essential.
“The richest country in the world, the United States of America, has 50% of people living in rental housing. That seems to be the only alternative, and we need to incentivize it quickly,” Hiranandani stated.
Expanding Incentives Beyond Industry
The real estate magnate suggested extending existing industrial housing incentives to service sector companies. Currently, industries providing accommodation for their workers can receive tax benefits over a 10-year period for qualifying expenditure. Hiranandani argued that similar concessions should be offered to large corporate employers in the services sector, including banks and financial institutions.
“We have already incentivised industrial housing two years ago. So if an industry gives housing for their labour they get a write-off in the next 10 years in order to produce that housing, provided it's used for it,” he explained. “That can be provided for the purposes of service also; Reliance can do it, HDFC can do it. Any company can do it.”
Such a move, he believes, would also alleviate the burden of long commutes, particularly in metropolitan areas like Mumbai, where many employees travel significant distances to their workplaces.
Addressing Investment Barriers
Hiranandani acknowledged that low returns on residential rental properties, often between 2% and 3%, deter developers and institutional investors. He proposed that tax concessions could enhance the economic viability of rental housing projects, thereby attracting crucial capital from institutions that currently find the segment financially unattractive.
His proposal comes amidst a shrinking supply of affordable housing in India's major cities. The Economic Survey 2025-26 noted a drastic fall in the share of homes priced below Rs 50 lakh in new supply across the eight largest cities, from 52.4% in 2018 to just 17% in 2025.
Reviving Charitable Contributions
Furthermore, Hiranandani urged policymakers to reinstate the role of charitable institutions in providing affordable rental accommodation. Recalling Mumbai's historical context, where trusts developed chawls for working-class families, he advocated for allowing charitable organizations, including large entities like Tata Trusts, to utilize their resources and CSR funds to build rental homes today.
Hiranandani concluded that while India's housing affordability challenge is complex, it can be effectively addressed through targeted incentives and increased private sector and philanthropic participation.