Rent crisis grips India as landlords bend rules, employ tricks and threats

House rents, stagnant since the pandemic, started zooming from mid-2023 by up to 50%, and are still surging. Even after a year, house rents haven't stabilised, and landlords are shortening agreement duration and issuing eviction threats for further unusual rent hikes. This has added to anxiety and agony among tenants.

Indoor plants, family pictures and food in the fridge await us. In our urban lives, we don't live at home as much as we come back to it. The idea of having a place to go back to provides a sense of stability. But what happens if we are forced to shift frequently because of rent hikes, short notice periods and threats and tricks by landlords? A sense of chaos ensues. What follows is constant dread and panic. All these come amid a surge in house rents across India that shows no signs of stabilising.

House rents, which remained frozen in the pandemic period, started shooting up across cities in India in mid-2023 by 40-50%. The conventional rate of annual hike is 5-10%. Even after a year since rents started zooming, they haven't stabilised. What has been added to that chapter is landlords employing tricks, like shortening lease agreements, and issuing eviction threats to extract the most from tenants.

For Adarsh, 29, who has called Bangalore home for nearly a decade, the crisis knocked at his door last month. His broker informed him that his landlord was seeking a hike in the house rent two months ahead of the end of the agreement period. Adarsh agreed to discuss it, confident it would be an 8-10% increase. His head swooned upon being told that the rent would shoot up from Rs 30,000 to 53,000, an increase of 77%. He was told he could either pay up or find another place. He quietly packed up his bags and found paying-guest accommodation.

Rishika Kapoor, 22, a sales professional in Noida, dreads her landlord's calls. This started after she was messaged two weeks ago to vacate her flat if she couldn't pay an increased rent. This was two months before her rent lease was to expire.

For Sanket Nayak, 32, a screenwriter who lived in Goregaon West, Mumbai, the rent was increased from 22,000 to 35,000 one day. This was a 59% increase and Sanket was forced to leave the flat.

LACK OF HOUSING UNITS IN HOTSPOTS FUEL CRISIS

This is not just limited to Adarsh, Rishika and Sanket. It is a story of many who live in Bengaluru, Delhi, Hyderabad, Mumbai and Noida.

This is also a story of an old pressure-tactic used to push people into a panic mode and then to extract as much rent as possible. This is done multiple times for different tenants to get to the peak cost of the rented property, real estate brokers told India Today Digital.

These tactics have become increasingly common since rents started surging since mid-2023, as the world opened up and employees started returning to office locations.

The additional cost that tenants are paying is an ever-present sense of instability for those living in metropolitan cities. What you call 'home' could be gone any second.

The rent crisis is fuelled by the lack of housing units in the residential hotspots in cities.

There was a shortage of 18.8 million housing units in urban India in 2012, which affected a quarter of urban households. The crisis was acute for poorer households.

The shortage of housing units in urban areas in 2018 had risen by 54% to 29 million by 2018, according to a report by think tank ICRIER.

India Today Digital spoke to several people who live in these cities and brokers to understand the rent hike crisis and its intensity across the metropolitan cities in India.

WHAT IS THE RENT CRISIS IN INDIA AND WHEN DID IT START?

House rents stagnated from 2020 to 2022 when employers allowed work from home (WFH) as the Covid pandemic raged across the world. As employers called back staffers to work on site, rents went up. As the newly opened world saw revenge travel, revenge shopping and partying, it seems revenge rent-seeking also became a phenomenon with landlords trying to make up for the lost period.

Rental values in seven Indian cities, including Bengaluru, Delhi NCR, Hyderabad, Mumbai Metropolitan Area (MMR), have skyrocketed by as much as 72% between 2021 and the first half of 2024, outpacing the growth in capital values, according to an ANAROCK Research report.

THE SKYROCKETING RENTS IN RENTAL HOTSPOTS

SOURCE: Anarock Research Report

In Delhi-NCR too, rents have shot up following the same trend. Rentals on Gurugram's Sohna Road have increased by 40%, while those in Noida sector 150 have rocketed by 56% between 2021 and the first half of 2024, according to the Confederation of Real Estate Developers Associations of India's October report. The CREDAI is a body representing around 12,000 real estate developers in the national capital region.

The pressure is also on high-end apartments. For example, a colleague living in Delhi's Commonwealth Games Village was paying Rs 1.20 lakh a month for a fully-furnished four-bed flat.

He has now renewed the three-year contract for a monthly rent of Rs 1.66 lakh, a hike of almost 40%.

"I first rented this place in 2018 at Rs 80,000. At the end of six years this month, the rent escalated to Rs 120,000. That is an increase of Rs 40,000 in six years. Now in just one stroke, the rent has shot up by Rs 46,000. That's an unheard of hike of 38%, but that's how it is at CWG Village this year. The rates have zoomed," he said.

The situation is no different in Kolkata, a city that is known for its low cost-of-living.

A property dealer in the West Bengal capital said 11-month lease agreements are usually followed in the city. However, landlords are increasing the rent by up to 15%, from the usual 10%, year-on-year in some posh localities like Jadavpur.

"In most parts of the city, the rent is being increased periodically every year by up to 15%," the dealer from North Kolkata told India Today Digital.

FROM THE LANDLORD'S HAT: TRICKS, THREATS AND TACTICS

The pressure tactics are many.

One is to ask tenants to vacate the flat. The other is to offer them shorter leases of around 7 months, against the standard 11 months or 2 years.

Then, there are brokers who help landlords broker a better deal and give short notices to tenants.

Another tactic is a clause in the lease wherein a tenant can only supposedly hold the flat till it is kept in a "proper condition". This could be subjective and landlords can use this clause to ask a tenant to vacate the apartment.

Not many people take landlords to the courts or the police. As this is even more time-consuming and people fear how it might unfold.

The best option is to pay the landlord or vacate the flat.

HOW PEOPLE IN CITIES DEAL WITH THE RENT HIKE CRISIS

"My landlord just dropped a message that he wants to increase the rent for the flat, and that he was getting tenants who were willing to pay more for it. He told us, either you can pay or leave," Rishika, a 22-year-old Noida-based sales professional, told India Today Digital.

Her mind felt like a computer where "many tabs of worry had been opened simultaneously".

"What was I supposed to do? I have no relatives in Noida or Delhi. Where would I go? I work a 10-11 hour shift sales job. Where will I find the time to look for a flat? My parents will get really worried. How will I shift all my things?," she said.

For Rhea, 23, who is from Bangalore and shifted to Gurugram to work for a finance start-up, it was navigating too many things together.

"I have been told twice to vacate my flat in the last seven months. These people are really clever. At one point, my landlord took the advance but didn't send the lease document and then, 10 days later, said he didn't want to give the flat to bachelors any more," she said.

All this takes a toll on mental and physical health. Rhea was forced to return to her family in Bengaluru because as her health deteriorated.

"Living here has been stressful enough. I developed a health condition. I have had a fear of being homeless and it disturbed my sleep pattern. I am back home with my family right now, and dreading that I will have to return," says Rhea.

This panic situation did not come because the law does not protect tenants. It is because the law is not followed.

LAW PROTECTS TENANTS. THEN WHAT IS THE ISSUE?

Under law, tenants stand protected.

The rent-control and tenancy laws stipulate that rents for non-commercial buildings can't be increased by more than 10% a year (or on lease expiry).

However, flat owners circumvent the laws by drawing up new agreements that see hikes way beyond what has been mandated.

"Landlords have made their properties like a sales pitch. It works, you know. They hike it to get the maximum value. They care about making that much money. Most people do anyway," Vikram Bhargava, a real estate broker, who works in Delhi NCR told India Today Digital.

Sneha, a Bangalore-based real estate agent, says the only way out is getting longer leases and holding landlords legally accountable. "They should not be allowed to make that kind of increase," she said.

Coming from a real estate agent, the suggestion sounds like a doublespeak, as brokers are mostly hand-in-glove with landlords in fleecing tenants.

There's a paradox too. The rate at which rents are increasing outpaces the appreciation of the property's price itself.

For example, rental values in Kolkata's EM Bypass area saw a 46% jump, but the capital value grew by just 15%, according to the Anarock report. In Chennai's Pallavaram, rentals surged by 40% while properties appreciated by a modest 18%, it suggested.

Not just that, most tenants are seeing an increase in rents, the rate of which is much higher than their annual increments.

"I hope someday my salary increases at the rate my rent does," wrote a Reddit user from Hyderabad on the social media platform.

As tenants suffer due to high house rents that show no signs of stabilising, landlords are employing several tricks like shortening of lease agreements, inserting subjective clauses and issuing eviction threats to fleece helpless tenants because of a scarcity of housing units in most metro cities. There seems to be no end in sight to the misery of those who don't possess houses in cities where they work.