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Ritesh Singh, a migrant worker from Chapra, Bihar, has been working in Gujarat for the past 4-5 years. He began working at the young age of 20 and has since been the sole bread earner for his family.
“I regularly send money home to support them. With my low wages, good accommodation is a luxury in the city which I can’t afford. That’s why I live at the worksite, even though the conditions there are often poor,” said Ritesh, reflecting the struggles many migrant workers face in securing decent housing.
Ritesh’s situation is not unique. Millions of migrant workers across India, particularly those in urban areas, struggle with inadequate housing due to low wages and the high cost of living.
Dr Joan Clos, Executive Director of the United Nations Human Settlements Programme (UN-HABITAT), also highlighted this issue. “Rental housing has remained a neglected area of national housing policy, which has instead focused, often exclusively, on promoting home ownership.
Consequently, rental housing has been overlooked, with very few governments implementing any kind of policy to help develop or regulate this form of housing,” said Dr Clos.
Policy Intervention
To address these issues, the Central government launched the Affordable Rental Housing Complexes (ARHCs) scheme in 2020.
Approved by the Union Cabinet on 8 July 2020, under the Pradhan Mantri Awas Yojana–Urban (PMAY–U), the scheme aims to provide affordable housing to urban migrants and the economically disadvantaged.
The scheme targets workers in sectors such as manufacturing, hospitality, healthcare, domestic services and construction, as well as labourers and students who migrate from rural areas or small towns seeking better opportunities in cities.
This scheme is implemented through two models:
Model-1: Utilizing existing government-funded vacant houses, constructed under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) and Rajiv Awas Yojana (RAY), to convert them into ARHCs through Public Private Partnership (PPP) or by public agencies
Model-2: Construction, operation and maintenance of ARHCs by public/private entities on their own available vacant land.
On 31 December 2020, the Ministry of Housing and Urban Affairs issued a circular to all states, directing them to convert vacant and under-construction houses under various Union government schemes into Affordable Rental Housing Complexes (ARHCs). The circular highlighted the following points:
Approximately 1.19 lakh houses constructed under the BSUP and IHSDP schemes of JNNURM and RAY remain vacant in 324 cities, while nearly 0.90 lakh houses are still under construction. These houses can be utilized as rental housing for urban migrants and the EWS/LIG category under the ARHC scheme.
As ARHC is a sub-scheme of PMAY-U, all vacant and under-construction houses under JNNURM and RAY, effective from the Union Cabinet's approval on 08.07.2020, are deemed ARHCs and will be allotted exclusively to ARHC beneficiaries.
States/UTs are urged to convert completed and incomplete JnNURM and RAY houses into ARHCs to maximize benefits for urban migrants and the poor.
Importance of ARHCs for Poor, Migrants
"ARHC is a crucial scheme for migrants and the urban poor," said Mahesh Gajera, Programme Manager for the Aajeevika Bureau.
He explained, "Most housing schemes in India, like the Indira Awas Yojana or Rajiv Awas Yojna or Pradhan Mantri Awas Yojana, all focus on home ownership, but none addresses the need for rental housing, which is vital for migrants."
Gajera added that after COVID-19 brought the challenges of migrants into focus, the government's introduction of ARHC was a welcome and much-needed move.
Vishnu Asari (name changed), a native of Aravalli district in north Gujarat, a works as a driver in Ahmedabad. He lives alone in the city as his wife and parents remain in the village. He wishes to bring his family to Ahmedabad but finds the rent unaffordable.
"ARHCs are good, with 24/7 water, safety, and decent hygiene," Vishnu said. However when he inquired about availability, he was told there is a waiting list of 4,000 people. This indicates that migrants and urban poor are embracing ARHCs .
The Standing Committee also emphasized the significance of Affordable Rental Housing Complexes (ARHCs). In its report, the Committee noted:
Urban migration is an ongoing process, making it impossible to completely eliminate urban homelessness without providing affordable rental options. It views ARHCs as a promising solution and recommends their implementation.
Lackadaisical Implementation
According to the Supreme Court Commissioners, approximately 37 lakh people—1% of India’s urban population—are homeless. A 2019 survey by the Ministry of Housing and Urban Affairs (MoHUA) estimated the urban homeless population at 23.93 lakh, with Maharashtra alone accounting for 21,882 individuals.
Despite this urgent need, Maharashtra, which had 54,145 homes designated for ARHC conversion, has yet to convert a single unit. Delhi faces a similar issue, with 51,595 earmarked homes remaining untouched, as per a Parliament response.
According to the Parliament response, 13 projects under Model 2 of the scheme have been approved across seven states, with a total capacity of 82,273 homes. However, only three projects have been completed so far— all in Tamil Nadu — with a combined capacity of 35,425 homes.
The Standing Committee, in its report tabled in Lok Sabha on 8 December 2023, expressed dissatisfaction with the slow progress of the scheme. The Committee noted:
The Model-1 of the Scheme has a target of converting 75,000 existing government funded vacant houses constructed under JNNURM/RAY into ARHCs and under Model-2, 2,20,000 new ARHC units by Public/Private Entities.
The Committee are dismayed to note that under Model 1, so far only 5,648 units have been converted into ARHCs and a proposal for converting 7,413 existing Government funded vacant houses into ARHC units has been processed. The Ministry has also informed the Committee that under Model -2, so far, 82,273 new ARHC have been approved.
Reason for Slow Progress
One major reason could be the lack of interest from the political class. Members of Parliament (MPs) did not raise a single question on the affordable rental housing scheme in Lok Sabha in the last five years.
According to Gajera, the major issue is that most vacant sites remain unused because they are located far from the city and lack basic amenities like transport and markets. "ARHCs are only effective when they are near workplaces," he said.
Another major problem lies in the tender process and eligibility criteria. "The scheme is designed in a way that benefits developers, excluding NGOs and trusts from participation," Gajera remarked.
He emphasized that ARHCs should be viewed as social housing units that empower residents by providing financial literacy, healthcare, and other essential services.
New Push
In her speech announcing Union Budget 2024, Finance Minister Nirmala Sitharman stated, "Rental housing with dormitory type accommodation for industrial workers will be facilitated in PPP mode with VGF support and commitment from anchor industries." This was followed by the NITI Aayog report on S.A.F.E. Accommodation - Worker Housing for manufacturing growth.
NITI Aayog introduced a whole separate category of the housing called S.A.F.E (Site Adjacent Factory Employee) Accommodation. It includes long term dormitory-style accommodation, exclusively for workers in industries, strategically located near their workplaces.
This accommodation is rented directly to workers or their employers and includes essential amenities such as water, electricity, sanitation facilities, and other basic services like food, laundry, and dispensary facilities.
The Indian government's policy think tank focussed on the importance of housing facilities for migrant workers using China's economic growth as an example. It stated in the report:
While China's success in creating millions of low-skill, labour-intensive jobs is often attributed to Special Economic Zones and FDI incentives, an overlooked factor is affordable housing. Providing workers with employer-built dormitories, often on land given by local governments, improved their real wages and living conditions.
Although the government has acknowledged the need for affordable rental housing and introduced schemes, progress has been slow. To bridge the gap, NGOs and private players have stepped in.
Recently, the Shelter Square Foundation, a new initiative by Aajeevika Bureau, launched a 'Republic Hostel' in Surat, specifically catering to migrant workers in the textile sector.
For migrant workers, a significant portion of their income is spent on rental housing in cities, often forcing them to live in slums, on footpaths, or at work sites where hygiene is poor.
This not only affects their health but also impacts their long-term earning potential. Another major challenge is the difficulty migrants face in securing rental housing due to social and cultural differences with the local population. Single male and female migrants, in particular, face additional barriers in finding accommodation. Affordable rental housing schemes could offer a comprehensive solution to these issues if implemented timely.
As noted in the NITI Aayog report, affordable housing is crucial not just for migrants but for the overall economic growth of the country.