The world has become caught up with the idea of homeownership. India is no exception to this trend: in 2011, the rate of homeownership in India was 87%, the 7th highest in the world (Census of India, 2011). For decades, homeownership has become synonymous with success, stability and status. However, as a nation of 1.2 billion people experiencing rapid urbanization, the demand for affordable housing is increasingly outstripping the supply of homes, causing house prices to skyrocket. With India’s urban population expected to grow by 10 million a year until 2050, it seems we may need to reevaluate homeownership as a national ambition and ask: in this modern age, is buying really the best choice?
This is a problem replicated across the globe. In the UK, for example, house prices are now almost seven times people’s incomes, and house prices in London have risen by 222% since 1999 (Shelter, 2016). In order to keep up with current demand, it has been estimated that 250,000 new homes are needed to be built each year (Barker Review, 2004).This target has never been met. Instead, the government has focused on initiatives which have made it easier for people to borrow and build up deposits to afford increasingly expensive properties. These schemes have done little to address the underlying supply shortage of homes, and have left people on ordinary incomes unable to afford to buy or rent for the long-term. It is clear that a different approach is desperately needed.
The prioritisation of homeownership by successive governments needs to be discarded as an unfeasible and outdated policy. Fortunately, the need to move away from the idea of homeownership has been coupled with a cultural shift that in the way we want to live. While some of us may still fantasize about walk-in closets, expansive living rooms and ample storage when we think about our dream homes, oversized houses are becoming less and less desirable.
Unlike previous generations, who were content with living in the same house for thirty years or more, the younger generation are willing to move wherever the best employment opportunities arise. They want the freedom to live and work wherever is best at the time, and the freedom to move on without the ties of homeownership. For these young individuals on the move, rental housing provides the flexibility and convenience to fit in with their nomadic lifestyle.
Strengthening the shift towards smaller, more convenient homes has been a shift in demographics. People are increasingly choosing to live alone and having their first child later in life. This narrowing of the family form has already had significant effects on household sizes, with the average house shrinking by 17% over the last fifty years.
What do these changing demands and preferences mean for the future of housing? As housing becomes increasingly unaffordable in cities and homeownership is becoming less and less important to a generation demanding flexible, affordable accommodation, the shift from buying to renting is set to become the next evolution in the way we live.
New renting options couldn’t be more different from the inflexible, low quality rental agreements that previously dominated this sector of the market, however. Self-styled as a “disruptive alternative to the way people live”, Welive, for example, offers flexible, co-living spaces with a built-in sense of community. The project is the sister brand of the hugely successful co-working company, Wework, which has spread its innovative concept of collaborative, community-based workspaces worldwide. Welive’s flexible contracts enable tenants to stay on a month-to-month basis, shaking up the rigidity of the current rental sector, What really distinguishes Welive from the current rental housing market, however, is its commitment to community. The co-living space offers campus-like perks such as housekeeping, yoga and even free beer, that manages to successfully strike the balance between student housing and hotels. This new-style living doesn’t come cheap, however: a place in Welive’s central New York branch will set you back £980 per month.
Chototel is responding to these same consumer preferences, but at an unprecedented price point. Chototel is using “smart home” technology to make housing more affordable and better to suited to what we really need. Chototel is building “super-budget” hotels, with rents starting at just $2a night. Guests can stay for as long or a little as they like, and rooms include all the necessary home comforts along with access to uninterrupted utilities. All this is made possible through the use of innovative IoT technology, which has automated many of the tasks previously reliant on staff. Guests can check-in and out using their Smartphones, as well as monitor and pay for utilities on a real-time basis. Chototel is also committed to fostering a sense of community for its residents: it’s pilot project, based near Mumbai, India will include a community kitchen, a crèche and a children’s play area.
With unprecedented population growth, urbanisation and changes to the way we live, homeownership will inevitably give way to renting as the most suitable housing option. This new style of renting is scarcely recognisable from its inflexible predecessor, however. As people increasingly value convenience and comfort, rental providers are now competing on quality and flexibility to satisfy the housing demands of the next generation.