Navigator Insights

Rental housing: An option for housing the poor

This article is part of series of blogs related to housing in development countries. It elaborates on one of the five models for successful delivery of housing that were presented in the previous blog “5 institutional models for successful housing in Asia”.

In most places, homeownership has come to be seen as the most secure and most desired housing option. It is often associated with source of pride, happiness and stability. Governments’ have made significant efforts in promoting ownership, however, there still remains a significant gap between demand and supply. Considering the challenge of providing accessible and affordable housing, one needs to take on board multiple options.

 

The overall share of rentals in Asian cities is estimated at between 20-30 per cent of the housing market, which accounts to millions of people. In fact there is an increase in the tenant population. Rental housing may be only a partial answer to urban housing problems, but it is an important housing option — especially for the urban poor, and particularly in situations where people need to be close to where jobs are, are not ready or able to buy or build houses of their own.

Although a significant proportion of urban dwellers are tenants, the number of governments’ giving effective support to rental housing development is small. This is attributed to governments’ efforts to promote homeownership. When privately owned, the bulk of rental housing accommodates low-income households through informal, flexible lease arrangements, which entail lower rents but weaker security of tenure and probably lower quality public amenities (Quick Guide for Policy Makers, UNESCAP and UNHABITAT).

 

Some cities, like Bangkok, have seen innovative rental housing where low-income communities have evolved practical arrangements with landowners to enable them to live within reasonable distance from their place of work. Under this scheme the poor look out for owners who keep land plots vacant as they wait for these to gain further in value before developing them. The poor offer the landowners rent for lease. Landowners find this arrangement works well as a defence against third party invasion.

The next blog will focus more than the misconceptions about renting versus homeownership.

Image courtesy of Aman Mehta