The economic fallout of COVID-19

Rent control amidst pandemic

With the social and economic impacts of COVID-19 and the subsequent lockdown more discernible than before, there is a clarion call made to landlords by tenants to ‘forgive’ rent for a month or two — especially for poor migrant families, who do not have other housing options or savings. Government, civil society, academia, and migrants themselves are urging landlords to stop evictions as it would exacerbate the pandemic. It does not help matters that policymakers do not know who these landlords actually are, since the vast majority of rent arrangements in India are informal and unrecorded.


As of now, governments are ‘ordering’ or requesting landlords to excuse rent and stop evictions on the basis of the Disaster Management (DM) Act of 2005. This, however, is a very roundabout way, as this Act does not have any provisions for demanding continuation of rental housing arrangements. The focus has to shift away from the DM Act to rent control acts that actually aim to regulate rental housing. This is where some medium to long-term thinking on rent control laws in States, as well as the Central government’s Model Tenancy Act, 2019, could be useful.

Regardless of how it sounds, landlords have a right to evict tenants as per any agreement they may have mutually. At the same time, tenancies are not unregulated by law — all tenancies should be administered by the state’s rent control laws.

Interests of landlords & tenants

Typical rent control laws have historically favoured tenants, in extremis in fact — the logic being driven by a popular conception of landlords as petty capitalists exploiting poor, vulnerable tenants. This is only partly true. Research has shown that landlords, especially in the rental housing market in poor parts of our cities, are as poor and vulnerable as their tenants. Consumption data for poor households in urban areas indicate a uniform lack of savings or access to social and economic safety nets — for both landlords and tenants. In other words, landlords themselves, by and large, cannot afford a no-rent month.

So, we are faced with a terrible quandary — there is no legal obligation for landlords to excuse rent or not evict tenants in the current pandemic, and this is also a situation that they themselves cannot afford. This predicament is further compounded by the informality in the rental housing market — we do not even know how many people are giving out their houses on rent, for how much, how long, or under what terms and conditions.

The Hindu podcast | Will India be able to manage the economic impact of COVID-19?

Consider two things: first, we have to make the rent Act applicable across more and more tenancies. This means that all tenancies, including those informal in nature, must get registered under the Act. This is the only way we will know who actually the landlords and tenants are, and where these houses are. Here, we also see the proposed MTA playing a key role in emphasising the registration of rent agreements through to-be-established rent authorities in every State. This is doable, and all States should pursue it. Tamil Nadu has already launched such an authority that manages a portal for simplified registration.

Second, the rent Acts, as well as the Model Tenancy Act, need a force majeure clause for emergencies such as the pandemic. In times of dire stress, there is a strong case for passing an order to prevent evictions. When passed under a rent law, for registered tenancies, it will carry a far stronger legal sanction than under a disaster law.

We still need to consider that landlords may not be able to afford a rent-free month — they need the rent for their own survival. For this, a mobilisation of housing, welfare and disaster funds is required to make up for this loss of rent. Funds could also be crowd-sourced, acquired from corporate social interests, and grants from international and national donor organisations. The advantage of having registered tenancies would then be evident — because the government would be able to channel funds directly into the accounts of landlords and tenants.

The writers work at the Indian Institute for Human Settlements. Views are personal

Our code of editorial values

This article is closed for comments.
Please Email the Editor

Printable version | Jun 15, 2021 7:18:26 AM |

In This Package
Can the economy survive the second COVID-19 wave?
Keep the wheels of economic recovery turning
Financial boom at a time of economic stagnation
The dangers of misplaced optimism
Do recent indicators hint at a real economic revival?
Long haul ahead: On demand-supportive fiscal policies
An agriculture-led revival as flawed claim
Financing economic recovery
Rebuild India’s confidence, revive the economy
Export blocks: On India’s trade amid the pandemic
Helping supply chains recover
China, better prepared for the post-COVID world
How public health boosts an economy
Backing the ‘angels in white coats’
Flawed stimulus is justice denied
One for the poor: On Centre’s corona package
Lockdown syndrome: On virus-induced economic crisis
Are India’s labour laws too restrictive?
Stop the return to laissez-faire
States cannot be left to the Centre’s mercy
A plan to revive a broken economy
Getting cash transfers out of a JAM
Slower growth and a tighter fiscal
A war-like state and a bond to the rescue
Everyone wants a good stimulus
You are reading
Rent control amidst pandemic
Will India be able to manage the economic impact of COVID-19? | The Hindu Parley podcast
Will COVID-19 affect the course of globalisation?
Is the global economy headed for recession?
Why has the rupee fallen against the dollar?
Watch | Impact of COVID-19 on the global economy
What can India do to overcome the global slowdown?
Coronavirus | Why has the stock market been so volatile?
Viral economies: On coronavirus impact
Trade in tatters: On the global slump
Monetary policy can’t combat the COVID-19 impact
Blunting the economic impact of a pandemic
Government doing exact opposite of what’s needed to revive economy: Jayati Ghosh
Coronavirus | Why has Kerala sought a relaxation of Fiscal Responsibility and Budget Management rules?
Next Story