The Affordable Rental Housing Complexes (ARHC) scheme is a central government initiative aimed at providing low-cost rental accommodation to urban migrants and the urban poor. Launched in July 2020 as a sub-scheme under Pradhan Mantri Awas Yojana-Urban (PMAY-U), it was triggered in part by the mass reverse migration of workers seen during the COVID-19 pandemic. The scheme targets those from Economically Weaker Section (EWS) and Low-Income Group (LIG) categories: daily wage labourers, street vendors, rickshaw pullers, industrial workers, students and others who migrate to cities for work but cannot afford market-rate housing.
How it works
ARHCs are implemented through two models. Under Model 1, existing government-funded vacant housing stock is converted into rental complexes through a public-private partnership. A private agency, called a Concessionaire, takes over the property, repairs it and rents it out to eligible tenants. Under Model 2, public or private entities construct new rental complexes on their own vacant land.
Each complex must have a minimum of 40 dwelling units. These can be single-bedroom units of up to 30 square metres, double-bedroom units of up to 60 square metres, or dormitory beds of up to 10 square metres each. Double-bedroom units cannot exceed one-third of total units in any project. Facilities including water supply, sanitation, electricity and common areas are mandatory.
The scheme runs on a 25-year project period. For government-funded housing, the Concessionaire returns the property to the Urban Local Body (ULB) in livable condition at the end of the term. For privately built complexes, the entity may either continue for another cycle or repurpose the land.
Rent, eligibility and allotment
Rent under Model 1 is fixed by the local authority based on a market survey. Under Model 2, the entity sets rent after conducting its own survey. Rents can be revised upward by 8 per cent every two years, capped at a 20 per cent total increase over five years.
Applicants need an Aadhaar card or other government-issued identification. PMAY-U beneficiaries who are migrants and do not own a PMAY house in the same city are also eligible. Priority in allotment is given to Scheduled Castes, Scheduled Tribes, Other Backward Classes, widows, working women, persons with disabilities, minorities, and transgender individuals, provided they fall within the EWS or LIG income bracket.
Applications can be made through the official portal at www.arhc.mohua.gov.in
Incentives for Developers
To attract private investment, the scheme offers several benefits to Concessionaires and Entities. These include concessional project finance, income tax and GST exemptions on profits from ARHCs, single-window project approvals within 30 days, 50 per cent additional Floor Area Ratio at no cost, and a Technology Innovation Grant for projects using approved new construction technologies.
The scheme has since been absorbed into PMAY-U 2.0, launched in September 2024, under a dedicated Affordable Rental Housing vertical aimed at expanding rental options near employment hubs across Indian cities.
