Rent Scams & the role of PSB HRA Allowances

The role of PSBs and HRA in escalating rents and feeding greed.

Sector 9 used to be a lovely locality in CBD Belapur (rather unilaterally renamed Swami Vivekanand Nagar by the authorities).

At one time it offered a relaxed, green setting for row houses that spelt relaxed living.

Things went officially downhill when residents and greedy civic/political authorities decided to allot higher FSIs (2x) for a fee, thereby legalizing en-masse what was hitherto considered a shady practice.

Residents reconstructed en-masse creating ground + 2 structures in a locality that was previously marked by uniformity and civility of rules -- conforming to the rule of keeping at least 7 feet distance between the back wall and the compound wall.

Now you have situations where houses have usurped all the free space that was available in the back yard and side plots and constructed edge to edge.

So people in one house can't open their curtains because they will literally look into the bed room of the house behind -- and vice-versa.

And yet the first person to create this situation in the mutual tango of discomfort will grudge the other party for extending his backyard :D

But I digress. What does that have to do with escalating rents. Well both touch on the greed of people that comes to the fore in these situations.

Belapur (the offical complex side) is home to regional headquarters of large Public Sector Banks (PSBs).

State Bank of India in particular has a massive operation here spread across multiple buildings, and its employees deputed on transfer to GITC Belapur are naturally in need of safe accomodation for their families. Sector 9 qualifies.

Here's the kicker. SBI has a generous House Rent Allowance (HRA), which by nature is not paid to the employee -- but directly to the home owner from whom the employee is renting the apartment.

So the employee has no interest in negotiating rents as long as he gets something close to office, clean and convenient.

The home owners know this, the property agent (brokers) knows this.

That's the reason behind the escalation in rents of a 650 sq foot row house which should normally have cost ~15-17k per month even accounting for inflation, now being retailed at 22 to 25k. Pure greed (of the home owners). A 900 sq foot apartment here has an asking price of 35,000 which is absolultely crazy. But since it fits the HRA allowance of a certain band of SBI employees, and the home owners know there is a captive market -- they ask and get the price -- for a home that does not in reality deserve more than 22k - 25 k rent.

It's a real shame -- because it has made the rental market unaffordable for many people, it drains the national exchequer (the employee doesn't care -- doesn't have a say, the bank management doesn't have a clue, the greedy home owners make a hay-day).

What's even worse is these same home owners are extremely reluctant to carry out any home repairs / maintenance, leading to the growth of hazards for long term residents. Broken sewage pipes seeping into the ground remain unfixed -- owners burnish their 'educated' background but refuse these basic civic courtesies. Despite multiple reminders they throw off the requests to carry out maintenance with a -- we will look into it -- but in the end, instead of carrying out a proper fix will carry out a eyewash -- like a post monsoon coat of paint before the next tenant comes in to hide the massive rain seepage issue.