Should Indian Cities Build Rental-Only Apartments? Lessons from Vienna, New York and Tokyo
Former Railway Board Member MK Gupta proposes dedicated rental apartments near metro stations. (Image Hillside RWA Mumbai)
By SANJAY SINGH
Former Railway Board Member MK Gupta’s proposal for dedicated rental housing near metro and railway stations draws on global models. Vienna, Japan and Britain show how institutional investment, secure tenancies and public land can reshape urban housing.
New Delhi, November 7, 2026 — India’s metropolitan housing crisis is increasingly about location, not merely the number of homes being built. Millions of workers struggle to find affordable accommodation near their workplaces, forcing them into overcrowded settlements, expensive rentals and exhausting commutes.
MK Gupta, a former Railway Board Member, has proposed that Indian cities reserve a proportion of residential development near mass-transit stations exclusively for long-term rental housing. In a LinkedIn post following a visit to New York City, Gupta advocated compact apartments, professionally managed rental buildings, separate parking charges, inflation-linked rent increases and greater security of tenure.
The proposal deserves serious consideration. International experience suggests that rental housing can become a significant component of urban development—but only when backed by sustained public policy, institutional financing and credible tenant protections.
Vienna: Housing as a public responsibility
Vienna offers perhaps the most compelling example of rental housing at scale.
The Austrian capital has approximately 220,000 municipal apartments and another 200,000 cooperative or limited-profit housing units. Together, these represent a substantial share of its housing stock. The city combines public ownership, nonprofit housing providers and regulated rents to maintain affordability across different income groups.
Vienna’s success is not simply about constructing apartment blocks. It reflects decades of public land management, subsidised financing and a commitment to housing as a social necessity rather than exclusively an investment asset.
For India, the lesson is that rental housing cannot depend entirely on private developers seeking maximum returns. Public authorities must help create a permanent stock of affordable rental accommodation.
Japan: Institutional rental housing without the usual complications
Japan’s Urban Renaissance Agency, or UR, manages approximately 700,000 rental apartments across the country.
Its rental system offers an important alternative to conventional private arrangements. Tenants do not need a guarantor, key money or an agent’s commission, and there is no renewal fee. UR provides accommodation for individuals and families through a professionally managed institutional system.
This model directly addresses Gupta’s concerns about India’s cumbersome rental arrangements, particularly repeated short-term agreements and the financial burden of moving into a rented home.
India could develop comparable rental agencies through metropolitan development authorities, public-sector enterprises and institutional investors.
Britain: Build-to-rent as an investment category
The United Kingdom has formally recognised build-to-rent as a distinct category within its planning framework.
Under this model, residential developments remain under common ownership and professional management rather than being divided into individual apartments for sale. British planning guidance also provides for affordable rental homes within such developments.
This is relevant for Mumbai, Bengaluru, Delhi-NCR and Hyderabad, where developers could build rental communities for professionals, migrants and young families.
However, institutional rental housing must not become merely a premium lifestyle product. Affordable units and transparent rent structures need to be part of the planning bargain.
Singapore: A lesson in scale, with a caveat
Singapore demonstrates how sustained state intervention, land assembly and large-scale housing development can transform urban accommodation.
Its Housing and Development Board has delivered housing at extraordinary scale. But Singapore’s public housing system is predominantly based on long-term leasehold ownership, not rental-only accommodation. It is therefore a useful example of public planning and land management, rather than a direct template for Gupta’s proposal.
What India must get right
Gupta’s suggestions are broadly sound, but implementation will determine whether rental housing becomes an affordable alternative or another investment opportunity.
First, development authorities should reserve suitable land near metro stations and suburban railway corridors for rental projects. Transit-oriented housing would reduce commuting costs and improve access to employment.
Second, government agencies should partner with pension funds, insurance companies, housing finance institutions and private developers to create professionally managed rental portfolios.
Third, rent regulation must balance tenant protection with investment viability. Predictable, transparent rent increases and enforceable long-term contracts are preferable to arbitrary controls that discourage construction.
Finally, compact apartments should not mean poor-quality housing. Adequate ventilation, natural light, sanitation, common facilities and access to public services must remain essential.
India also needs to learn from the shortcomings of poorly maintained public housing elsewhere. Construction alone is insufficient; maintenance, financial sustainability and accountable management are equally important.
India’s urban housing policy has traditionally encouraged homeownership, while its rental market remains fragmented and insecure.
A rental-only housing programme near mass-transit stations could provide a missing middle between expensive private apartments and informal settlements.
The objective should not be to replace homeownership. It should be to ensure that owning a house is not a prerequisite for living close to employment, enjoying urban mobility and accessing decent accommodation.
As Gupta rightly suggests, a modern city must offer its residents the freedom to rent securely and affordably.
The question for India’s metropolitan development authorities is no longer whether rental housing deserves attention. It is whether they are prepared to make it a permanent part of urban planning.
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