Niranjan Hiranandani, Founder and MD of Hiranandani Constructions, which builds residential and industrial townships and commercial office spaces, is calling for building a huge stock of “rental houses” so that people in the lower strata of society can live at affordable rents.
In a conversation with businessline, Hirananadani said that the government should incentivise companies so that companies could build rental houses — perhaps by giving a five-year income-tax exemption on rental incomes. This, he said, should be applicable for houses below a certain size, say, 60 square metres.
Elaborating on the idea, he said that today houses are built with the owner in mind, though many of them are rented. Rental houses, on the other hand, are accommodations that are meant to be rented out, so they are built accordingly.“During the British days, there used to be chowks in Mumbai, which used to rent out houses for (say) ₹10 a month, with common bathrooms and toilets. We need to bring them back,” he said.
A worker or a peon in an office should be able to quickly get a house on rent and live there. “Today, he can’t — he lives in a jhompda (hutment) or something like that,” Dr. Hiranandani, who is also the Chairman of the National Real Estate Development Council, said.
He said that if there were incentives, any company could build rental houses for their workers. Given incentives, “Reliance, Hiranandani, HDFC, banks, and financial institutions can all build rental houses,” he said, stressing that the multiplier effect of this would enable economic growth of 10 per cent.“In the US, which is the richest country in the world, 50 per cent of the people live in rental houses,” Hiranandani said.
Giving an example, he said, “Today you have many factories in Oragadam. There are 25,000 workers there. You can build 25,000 rental rooms.”
But could this not be done without incentives? “Who wants to block the money?” he posed. A builder would want to build houses and sell them. To hold them for rent would be to lock in capital.
Asked if the Council had formally given this suggestion to the government, he said that it had, and the government was “considering” the idea.He said that if building rental houses were to become a movement, “at least $20 billion per year of foreign capital will come into India.”
Hiranandani said that the housing sector is the second largest employment provider after agriculture and provides business to 270 feeder industries — cement and steel, paints, wood, flooring, tiles, and so on.
He feels that in the next year, India’s GDP will grow by 8 per cent, thanks to all the infrastructure development. If India must get to double-digit GDP growth, it has to focus on housing, he said, pointing out that the Government of India’s think-tank, NITI Aayog, had said that when India becomes a $5 trillion economy, housing would account for 20 per cent of GDP. Today, it is 7 per cent.
Trans Harbour link
The Mumbai-Trans Harbour link will open huge parcels of land for real estate development, says Hiranandani.
The link, which is a road, 16.5 km of which is a bridge on the sea (Thane Creek), connects south Mumbai with Navi Mumbai, cutting the travel time from two hours to 20 minutes.
As people can live in Navi Mumbai and work in south Mumbai, there will be opportunities to develop housing in Navi Mumbai, Raigad district, Hiranandani said.
