– Arvind Jain, Managing Director – Pride Group
Vacant homes across our cities are causing a big stir now – and for good reason. In a country which has not been able to meet the housing needs of the largest part of its population, a massive number of flats standing empty comes across an aberration. The reasoning behind the outrage seems sound. Many Indians cannot yet afford to buy their own homes; these vacant flats should at least be rented out by their owners so that more of the population can find homes within their means.
However, all may not be as it seems at first sight. Homes can be unoccupied for various reasons. For instance, they could be in projects which are complete but stalled because they are been found to be legally non-compliant by the local authorities. In such projects, many of the flats may be ready and also bought up, but they are not legally fit for occupation by anyone.
Many homes that are lying vacant today have been purchased by NRIs who are currently stationed abroad and intend to occupy them on their return to India. They are not interested in renting them out in the interim, because they are worried about not being able to vacate the flat when they need it themselves. In many other cases, unoccupied homes belong to investors who are looking solely at capital appreciation and are not looking at renting them out for the same reason.
In yet other cases, projects may be lying vacant because the areas they are in lack water supply, electricity, connectivity or other forms of support infrastructure. In other words, they are unoccupiable – their owners did not do the necessary due diligence and believed unreliable developers who told them that the necessary infrastructure is on the way.
If units in a project are lying vacant because the project is complete but stalled, the developer must get the project approved at all levels so that it becomes marketable. If a significant amount of vacant homes in a city is held by investors focused only on capital appreciation, the state government can step in and enforce laws to release such supply onto the rental market. Instances where a project is vacant because the locality lacks the necessary utilities or support infrastructure are trickier. He is clearly at fault for launching and marketing his project in such an area in the first place, but there is not much he can do on his own without support from the local municipality.
About The Author:
Arvind Jain is Managing Director of The Pride Group, a world-class property development conglomerate that is changing the cityscapes of Pune, Mumbai and Bangalore. Established in 1996, Pride Group has built and delivered over 10 million sq.ft. of constructed area. Pride Group has recently launched Pride World City, the 400-acre luxury mega-township at Charoli, Pune.