Rental housing is predominantly an urban phenomenon and it is more of a feature in the large urban areas.  Rental housing is a preferred option for new migrants, transient households and households who cannot afford to own a house in Kerala.  

The percentage of such households is likely to be higher especially in larger urban areas.  This hypothesis holds good for Indian cities.  With increasing urbanization, these cities have attracted a large percentage of floating population.  Further, the increasing cost of ownership housing outstripping the increases in incomes has made housing less affordable over time.  The scarcity of institutional finance for housing has made the situation even tougher on this count.  The conglomeration of these forces would imply that a larger and larger proportion of households in urban areas would opt for rental housing.  Due to the continuing appreciation in Real Estate in Kerala , buying land in the prominent urban areas is a difficult proposition.

The evidence from Indian cities however runs contrary to expectations. Over the period 1961-81 the percentage of households living in rental housing has declined in a majority of the urban areas.  Further the decline has been sharper in the case of larger urban areas than that of the smaller cities.  The percentage of tenant households declined in all the twelve metropolitan cities in India.  The decline ranged from five per cent for (Kolkota and Hyderabad) to 27 percent (for Lucknow).

The explanation for the decline in the size of rental housing has to be found either on the demand or supply side factors.  An attempt has been made in this study to do the same in the case of one metropolitan city of India namely Delhi.  Even though the explanation would vary from city to city some generalization can definitely be drawn from the case of Delhi.