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Affordable Rental Housing Scheme (ARHC): State Of Play – IMPRI Impact And Policy Research Institute

Affordable Rental Housing Scheme (ARHC): State of Play

Mansi Garg


The Affordable Rental Housing Complexes (ARHC) scheme was introduced in July 2020 by the Ministry of Housing and Urban Affairs, Government of India, as a part of the Pradhan Mantri Awas Yojana—Urban (PMAY-U). The reverse migration brought on by the COVID pandemic-induced lockdown is what brought attention to ARHC’s mission to provide rental homes for the urban poor and migrants. The PMAY-U mission phase and the ARHC plan both end in March 2022. This article evaluates the present condition of the plan’s implementation—its evolving modalities, stakeholder participation, and current status—given its significance as India’s first national rental housing scheme with only a few months left to call for bids and award projects.


According to the 2011 Census, nearly 45 crore people moved to various regions of the country in search of jobs. Workers in industrial industries, residential and commercial enterprises, the health sector, service providers, the hotel industry, and other similar sectors, as well as urban migrants, all play a significant part in the urban economy. They go from small towns or rural regions in search of greater job prospects in cities.

They frequently make concessions to their standard of living in order to send remittances to the family they left behind in their home countries. To avoid paying rent, they frequently reside in slums, illegal colonies, or peri-urban regions. To save money, they endanger their lives by spending a lot of time on the roadways while riding or walking to their jobs. Additionally, due to the sacrifice made in terms of hygiene, relaxation, and recovery circumstances, it leads to drudgery, anxiety, psychological collapse, and health issues.

The COVID-19 epidemic has caused a significant urban poor and worker reverse migration in the nation. Concerns concerning economic activity have been raised by this huge emigration from cities. Due to this circumstance, the issue of immigration and the impoverished has come to light and is now being addressed.

The Directive Principles of State Policy entrenched in the Indian Constitution recognize housing as one of the fundamental needs of existence. In all categories of urban migrants, a sizable fraction may already own a home or a plot of land where they now reside. In metropolitan regions, they might not be interested in buying a home outright; instead, they would search for a safer, more cheap rental property to save money. Their productivity may increase if rental housing choices were made available closer to their place of employment. In order to achieve inclusive urban growth, rental housing must be encouraged.


With industries, trade associations, manufacturing firms, educational/health institutions, development authorities, housing boards, and the central/state public sector, a sizable part of idle land is available but unutilized.

Organizations (Public Sector Units) and similar entities. It might be difficult to find adequate land in the city close to the locations where people work and study. Such sites provide enormous opportunities for the building of ARHCs for the owners. Due to limitations imposed by municipal planning and Development Control Regulations (DCR), entities are unable to use available property for providing dwelling amenities to migrants. To allow the use of this potential, an ecosystem must be established by appropriate policy measures by the Government of India (GoI), States/UTs/Urban Local Bodies (ULBs), and Parastatals, as well as through proper regulations and incentives.

Urban migrants and the impoverished may be eligible to rent unoccupied homes built for the Economically Weaker Section (EWS) and Low-Income Group (LIG) through Central Government-funded initiatives. States, UTs, ULBs, and parastatals that have built housing complexes with their own money may choose to use their empty housing stock by turning it into reasonably priced rental housing.

The Indian government wants to advance economic activity after COVID-19 by implementing its “Aatma Nirbhar Bharat” vision. Therefore, MoHUA has started Affordable Rental Housing Complexes (ARHCs) for urban migrants and the poor in conjunction with relevant Central Ministries, States/UTs, and other partners from the private and public sectors. This project, which is being implemented for the first time in the nation, would enhance their quality of life and remove the need for them to continue living in slums, informal settlements, peri-urban regions, etc.

A sub-scheme of PMAY-U for urban migrants and the destitute called Affordable Rental Housing Complexes (ARHCs) has also been introduced by MoHUA. In all, 5,478 unoccupied government-funded homes in Chandigarh, Gujarat (Ahmedabad, Rajkot, and Surat), Rajasthan (Chittorgarh), and Jammu have been transformed into ARHCs under Model 1. In Gujarat, Himachal Pradesh, Haryana, Madhya Pradesh, Uttarakhand, and Rajasthan, proposals for converting 7,483 unoccupied homes into ARHCs have been processed. Under Model 2, public and private companies have been given permission to build 80,273 additional ARHC units with a TIG of Rs 178.28 Crore. In the meantime, 22,689 brand-new ARHC apartments are being built in Sriperumbudur, Tamil Nadu.

Features of ARHC

i. Duration and Coverage

a)      In accordance with Census 2011 and Towns Notified Subsequently, Notified Planning Areas, and Areas of Development/Special Area Development/Industrial Development Authorities, ARHCs will be established in all Statutory Towns. After proper notice, States/UTs may consider any project as an ARHC in any other location.

b)      ARHC projects are eligible for consideration and funding for the PMAY (U) Mission period, which runs through March 2022.

ii. Target beneficiaries

a)      Urban migrants/poor from EWS/LIG categories, such as labour, urban poor (street vendors, rickshaw pullers, other service providers, etc.), industrial workers, migrants working with market/trade associations, educational/health institutions, hospitality sector, long-term tourists/visitors, students, or any other people of such category, will be the beneficiaries for ARHCs.

b)      Subject to beneficiaries being from EWS/LIG categories as provided by the Government, preference under the Scheme should be given to individuals belonging to Scheduled Castes/Scheduled Tribes/Other Backward Classes, Widows and working Women, Divyang, and Minorities.

iii. For a minimum of 25 years, all developments funded by ARHCs must be used only for the purpose of providing rental accommodation for the aforementioned target categories.

iv. Entities may provide housing for their own employees as well as meet the needs of nearby Entities. Institutions must be enlisted by the entity to guarantee ongoing tenancy and a steady flow of income. They will collaborate with the aforementioned institutions for this aim or use aggregators to obtain migrant labourers or urban impoverished people. Such organizations may collect rent directly from the tenants’ salaries, fees, or other types of compensation. Additionally, if necessary, these organizations can arrange adequate point-to-point transportation.

v. As part of PMAY-U, a Technology Sub-Mission (TSM) offers a “Technology Innovation Grant” (TIG) to encourage the use of cutting-edge, environmentally friendly, disaster-resistant technology and building materials for more affordable, quicker, and higher-quality home construction. The Ministry would only give TIG of Rs. 1,00,000 per double bedroom unit, Rs. 60,000 for single bedroom unit, and Rs. 20,000 per dormitory bed for projects utilizing specified innovative technology.

vi. States/UTs will keep ARHCs outside the scope of current State Rental Laws in order to protect the interests of stakeholders and prevent disputes or complications. For quick settlement, ARHCs must be controlled by the Model Tenancy Act (The Model Tenancy Act, 2021 is to establish a Rent Authority to regulate renting of premises and protect the interests of landlords and tenants and provide speedy adjudication mechanism for the resolution of disputes and matters connected therewith or incidental thereto.) or a change of their current regulations in line with the MTA.

Other Projects Under ARHCs

ARHCs include other lighthouses projects such as-

  • 6 lighthouse project consists of 1000 houses each with physical and social infrastructure facilities at the different regions of the country such as Indore Rajkot Chennai Ranchi Agartala Lucknow
  • This project will work as live laboratories that will lead to the successful transfer of technologies from lab to field.
  • This project will use innovative technologies for field-level application learning and re
  • NHS will provide ready-to-live houses that will be economically sustainable and of high durability.


Affordable Rental Housing Scheme Houses Model

Type Carpet Area Unit Structure Ratio
Single Bedroom The ratio may vary as per project requirement 1 bedroom, living room, kitchen, bathroom, toilet The ratio may vary as per project requirement
Dormitory Upto 30 square meters Separate bed, side table, shelf, locker, common facilities of kitchen, toilet 33% of the total dwelling unit is permissible
Double Bedroom Upto 10 square meters 2 bedrooms, living room, kitchen, bathroom, toilet 33% of total dwelling unit is permissible

Source: https://rajbhavanmp.in/affordable-rental-housing-scheme/

The Affordable Rental Housing Complexes (ARHC) programme initially sought to convert 83,534 flats built through central government-funded initiatives to serve as housing for migrant workers and the urban poor. According to data currently accessible on the Ministry of Housing and Urban Affairs’ web dashboard, only 5,648 units have been effectively converted into rental housing.

The government stated in response to a Lok Sabha question on February 2, 2023, that recipients have received a total of 4,470 apartments up to that point.

The cities with completed apartments thus far include Surat, Ahmedabad, and Rajkot (Gujarat), as well as Chandigarh, Jammu, Chittorgarh (Rajasthan), Lalkuan, and Dehradun (Uttarakhand).

Notably, even though over 73% of the more than 83,000 designated apartments are located in Delhi and Maharashtra, not a single one has been turned into rental housing as of yet.

The original approval for the flats to be converted to flats came from the United Progressive Alliance (UPA) government’s Jawaharlal Nehru National Urban Renewal Mission (JnNURM) and Rajiv Awas Yojana (RAY).

Emerging Issues

The ARHC recommendations provide no persuasive justification for why the empty public housing that is to be converted for rental purposes is unoccupied in the first place with regard to housing supply. Three distinct issues with publicly funded EWS and LIG housing have been brought to light by the study that has already been done on public housing in India. In most cities, these developments are situated on the outskirts of the city and have inadequate access to denser populations. The livelihoods of the households migrating from slums into these projects have been severely impacted by this.

Second, because of their remote locations, local government agencies have been unable to provide these villages with public amenities like anganwadis, government schools, and health care facilities, as well as essential services like water and sewage. These have had a detrimental effect on human growth and health, as well as a wider denial of rights to the city.

Third, some public projects have been identified as having subpar design and construction, which has a negative effect on the standard of living.

When moving from inner city slums to nearby public housing, women’s lives were significantly impacted. They not only missed out on domestic work opportunities that were close by, but they also lost time that could have been used for lucrative home-based work because they had to spend more time on mundane tasks like fetching water in these distant public housing projects (Coelho et al., 2013; Menon-Sen, 2006). Last but not least, the cumulative effects of these variables have reproduced the stigma associated with low-income communities (Coelho et al., 2020). As a result, the predicted social mobility from these rehabilitations and formalization procedures has not been realized by relocating slum people to formal public housing.

Way forward

a) The establishment of ARHCs close to urban migrants and the poor’s places of employment will improve their living conditions.

b) It would give States/UTs the chance and structure necessary to transform their own money-built unoccupied housing stocks into ARHCs.

c) Unoccupied housing from Central/State/UT Government-funded properties will be converted into ARHCs for use in commercially viable operations.

d) The continued availability of workers will assist industries.

e) Improved productivity and craftsmanship will lead to eventual financial benefits if migratory workers and the underprivileged have dignified living conditions.

f) This will assist in realizing the goal of “Housing for All” by meeting the demand for rental housing among urban migrants and the impoverished who do not seek ownership.

g) It would foster an atmosphere that would allow Entities to build AHRCs on their own vacant property, which would spur new investment opportunities and encourage entrepreneurship in the rental housing industry.

h) It would foster an environment that would encourage public and private entities to provide their unoccupied property for the entrepreneurial possibility of establishing ARHCs, which would spur more investment.

i) By offering livable housing options to urban migrants and the poor at fair rent, promoting affordable rental housing will ensure inclusive urban development and support efforts to prevent the slums’ future uncontrolled expansion.


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MoHUA launched Affordable Rental Housing Complexes to provide dignified living to urban migrants / poor. (n.d.). https://pib.gov.in/PressReleasePage.aspx?PRID=1807570#:~:text=So%20far%2C%20under%20Model%2D1,various%20stages%20across%20the%20country.

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Mansi Garg is a Research intern, at IMPRI.

Disclaimer: All views expressed in the article belong solely to the author and not necessarily to the organisation. 

Read more Policy Updates at IMPRI: GDP:  Not a Significant Indicator for Inclusive Growth.

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