In a building in Colaba constructed in the 1940s, two identical apartments exist under radically different rental arrangements. One family moved into its flat in 2011; another had occupied a similar apartment since it was built. The former’s apartment was restored before being leased and regularly serviced during the tenancy. In the latter, the roof collapsed during a prolonged dispute with the landlord. The difference lay not in the apartments themselves, but in the terms under which they were occupied: one family was a corporate tenant, renting at market-linked rates, measured in lakhs per month, while the other continued to pay rent fixed decades earlier at a mere fraction of the current market price. To understand how these two wildly different situations arose, it is necessary to look back to Bombay in the early twentieth century.
As Bombay became more industrialized, worker migration to the city began to rise. This caused land scarcity, severe overcrowding, and inadequate worker housing. This situation became a justification for state and urban planning schemes.
The government believed that providing land for upper-class residents would relieve overcrowding in working-class areas. Thus, Bombay’s urban expansion depended heavily on reclamation in the south.
Over time, South Bombay became associated with an elite urban identity and commercial power, as reclamation concentrated prestige and economic value on the southern waterfront. From then on, Bombay’s urban geography had a clear class hierarchy in place. This ultimately resulted in Bombay’s constrained urban geography, putting a lot of population pressure on the central part of the city, as workers still needed to remain close to the mills and docks for employment. The situation worsened as the Second World War approached, which became clearer as the 1940s continued. Partition further intensified the growing population pressure on very limited land.
In order to get the situation under control and protect vulnerable tenants from steep rent increases caused by housing shortages and inflation, the government introduced city-wide, first-generation rent control. The system allowed successive generations of tenants to continue occupying the premises and eventually transformed into quasi-ownership.
Mumbai’s rent control system was intended to protect vulnerable tenants during a time of crisis. However, the system did not change with the people it was meant to protect. Over time, protection became tied less to economic vulnerability and more to inherited occupancy, turning tenant protection into a form of inherited urban privilege.
Bombay’s housing crisis reached a fever-pitch in the 1940s. It started with World War 2. War brings industrial activity as production needs rise. On one hand, this kept the markets active for a short while, on the other hand, the city’s population surged too. Another result of the war was that there were a lot of immediate shortages, leading to a rise in the cost of construction materials, amongst other things. This led to a rise in the rental prices of newly constructed buildings.
The situation worsened with partition bringing in about 200,000 refugees to the city, pushing the city’s population to 2.3 million by 1951. At this point, the city’s southern core was ‘imploding’, so the new government tried to plan a ‘Greater Bombay’ suburban expansion, which didn’t really provide any immediate relief. This caused a massive rise in the price of land and rental accommodation all over the city.
In this environment, as the property market was uncontrolled, tenants were at risk of being evicted and priced out of their homes. They would have to move to areas far away from their workplace, diminishing their chances of finding daily employment. It also destroyed the sense of community that was fostered in these neighbourhoods over decades.
The city was in a dire situation at the time, and the working class tenants bore the brunt of it. In response, the government introduced rent control. First generation rent controls were introduced in major cities across Western Europe and North America during the war, to protect tenants, and they seemed to be working. The legislation provided vital tenure security for poor tenants. They functioned as a necessary shield to prevent mass displacement and preserve social order during a period of extreme instability. In Bombay’s constrained geography, ensuring affordable shelter was a fundamental prerequisite for the economic survival of its residents.
In Mumbai, first-generation rent control was introduced through the Bombay Rents, Hotel and Lodging House Rates Control Act of 1947. Prior to this, Bombay had seen some temporary rent control measures during both World Wars, but the 1947 Act consolidated and expanded existing rent-control measures.
The system froze standard rents at September 1, 1940 levels and made any unauthorized rent increase unlawful, regardless of inflation. The legislation made eviction extremely difficult unless the tenant stopped paying the standard rent or if the landlord could prove that they required the premises for personal use. Another defining feature was inheritable tenancy, which allowed the tenant’s descendants to occupy the premises indefinitely at historically fixed rates. The Act was a temporary emergency measure to protect industrial labour, however, it remained in place for decades until it could not be changed without causing a lot of problems.
As maintenance costs increased over time while rents remained frozen at 1940 levels, landlords found it financially impossible to maintain their properties without corresponding rent increases. Landlords were therefore disincentivized from investing in their properties, since repairs produced little financial return. This disinvestment led to the gradual deterioration of rental properties all over the city. Over time, many of these buildings became dilapidated and resembled slum-like conditions. To manage this crisis, the government set up the Mumbai Building Repairs and Reconstruction Board. It was tasked with repairing and reconstructing these buildings, which were now known as cessed buildings.
Another consequence of the system’s rigidity was that it discouraged new investment in rental housing. This contributed to a major decline in the share of rental housing in urban India, dropping from 54% in 1961 to 31% in 2011. To circumvent rent-control protections, landlords used ‘leave-and-license’ arrangements under the Indian Easement Act of 1882. Under these arrangements, occupants paid short-term license fees instead of rent, thereby avoiding tenancy protections, and paid prices closer to market rates.
Over time, an informal parallel market emerged through the pagdi system. It made tenancy a transferable asset. Since the formal rental market remained frozen at 1940 levels, newer tenants were required to pay a lump-sum payment to secure occupancy, sometimes reaching up to 80% of a property’s market value. The outgoing tenant received two-thirds of this payment, and the landlord received the remaining one-third. This transformed rent into a form of quasi-ownership.
The emergence of the Pagdi system revealed that protected tenancy had become an asset in its own right. People were now willing to pay large amounts of money for protection. They did this because by paying a lump-sum, they got low rent, a secure tenure, inheritance rights, and access to economically important locations. In other words, they practically owned the houses they lived in.
Rather than reversing this transformation, the state eventually formalized the pagdi system in 1999. By doing so, the government acknowledged that protected tenancies had become valuable assets that people were either born into or could buy. Access to the benefits of rent control was therefore determined not by economic vulnerability, but by whether one had inherited a protected tenancy or possessed the resources to buy it. This system that monetises the value of inherited tenant rights shows that the law no longer protected affordable shelter and vulnerable populations, but exclusive access to valuable urban geography within a city defined by extreme land scarcity and speculative pressure.
Rent control was designed to protect existing tenants from displacement due to eviction or high rents. It was introduced during a period of extreme housing scarcity as an emergency measure. However, by making these tenancies inheritable by family members, the state established a generational continuity that allowed families to occupy the same apartments for the same price, perpetually. These protections were linked to tenancy status, rather than financial vulnerability, and eventually, these protections became detached from actual economic need. This allowed even wealthy tenants in affluent areas to enjoy 1940s-level rents. As a result, many protected tenancies lie in valuable urban areas like South Bombay. In such cases, historical occupancy becomes the basis for continued access to important urban geography, creating a protected ‘insider’.
The example of the Colaba building illustrates this. Two households occupied nearly identical apartments in the same building, yet one enjoyed decades-old protections while the other paid market-linked rates. The difference was not economic need, but tenancy status.
Over time, as new migrants came to the city, most rental agreements were now short-term leases, so newcomers did not have access to the same tenant protections. This resulted in the creation of three separate sub-markets for housing in Mumbai – Formal housing, informal housing, and rent-protected housing.
Rent controlled housing was essentially frozen to newcomers. This segmented the market and formal housing became extremely expensive, and inaccessible to most residents. Slums were the only affordable housing open to many. As central urban space became increasingly inaccessible, many low-income households were pushed toward peripheral areas and informal settlements. These neighbourhoods often suffered from weaker infrastructure, poorer connectivity, and reduced access to employment opportunities. The costs of housing scarcity were therefore absorbed by those outside the protected system, reinforcing a growing divide between urban insiders and outsiders.
Despite its shortcomings, rent control in Mumbai has its defenders. At this point, sudden deregulation could have dire consequences. Being an island city, Mumbai has extreme land scarcity, and not a lot of options for urban expansion, leading to a highly competitive market characterized by speculative buying inflating prices. Mumbai already has the highest housing prices in the country, and unrestricted market forces would rapidly increase rents in centrally located neighbourhoods.
Many rent-controlled households have elderly tenants or low-income families with an inelastic or fixed income, who moved in decades ago and genuinely depend on ₹500–₹2,000 monthly rents for housing security. For these tenants, rent control fulfilled its original purpose: protecting vulnerable populations from market forces they cannot control.
Without rent control, these vulnerable populations would be forced to relocate. This could potentially wipe out entire social networks. Mumbai without its Parsi neighbourhoods, Maharashtrian communities, and dozens of other established ethnic microcultures, would not be the same city. This unique framework where different types of people can interact, is what makes the city special.
From this perspective, rent control functions as an essential safeguard against displacement, preserving both affordable housing and the social fabric of the communities that contribute so much to the city’s heritage and culture. The protection it provides is legitimate.
However, the universal protection provided by the 1947 Act is a problem. It made no distinction between these vulnerable tenants and wealthy grandchildren who inherited the same apartments, or even other original generationally wealthy tenants. The problem isn’t that rent control protects vulnerable tenants; it’s that it protects everyone equally, regardless of whether they still need protection. Over time, the law became tied to tenancy status instead of economic vulnerability. By making protected occupancy inheritable, access to its benefits depended increasingly on whether one belonged to a protected household rather than whether one remained vulnerable to displacement. Thus, it failed to do the very thing it was created to do, in the long term.
The consequences of this were borne by those outside the protected system. As protected tenancies remained within the same families across generations, a lot of housing was removed from circulation. New migrants and low-income households without inherited protections were forced into increasingly expensive housing markets, informal settlements, or peripheral suburbs.
Today, New York City faces a rental vacancy rate at a 50-year low, disproportionately affecting households earning under $50,000. These conditions have renewed demands for state intervention in tenant protections as access to central urban areas becomes increasingly restricted to the wealthy and rising rents displace working-class residents from historically accessible neighbourhoods. For many public servants and service workers, proximity to the central city is closely tied to economic survival.
These tensions bear a strong resemblance to early twentieth-century Bombay, where industrial workers clustered around mills and docks because limited transport infrastructure made proximity to work essential. In both these contexts, when market forces rendered economically important areas inaccessible, the state needed to act to protect poor tenants and conserve the labour supply. Historically, similar conditions led to the formation of first generation rent controls seen in 1947 Bombay Rent control act, and even New York’s WWII-era regulations.
It is no surprise that rent regulation and tenant protection have taken centre stage in New York’s urban politics amid a severe housing shortage and rising living costs. The popularity of Zohran Mamdani’s mayoral campaign reflects broader anxieties surrounding displacement and rising rents, with housing emerging as one of the city’s most pressing political issues.
Rent regulations in New York were also introduced during World War II to control inflation and protect tenants. However, later reforms gradually introduced vacancy decontrol and removed protections for high-income households. New York’s system evolved mechanisms for gradual adjustment and partial deregulation.
In Mumbai’s case, a law designed to be temporary became permanent. The city held on to its first generation rent control system. This framework kept strict tenant protections and preserved inheritance rights to the lease across generations. By doing this, rent control became more about preserving long-term occupancy in important urban areas than about protecting economically vulnerable populations.
What this shows us is that the challenge is not simply whether tenants should be protected, but how protections can remain relevant to changing urban conditions. Mumbai illustrates the consequences of institutional rigidity, while New York illustrates the recurrence of the housing pressures that originally made such protections politically attractive. Authorities have to constantly revise and revisit such policies in detail, in order for them to be effective in the long term.
Further Reading and Sources
“Bombay: Cities Within. ”
Chandavarkar, Rajnarayan. The Origins of Industrial Capitalism in India: Business Strategies and the Working Classes in Bombay, 1900–1940.
“Decline of Rental Housing in India: The Case of Mumbai.” Artha Global.
“Jarjar Ghar: Documentary on Mumbai’s Generational Tenants Underscores City’s Ethos, and Its Glaring Housing Crunch.” Firstpost.
Mamdani, Zohran. Block by Block: A Plan to Stabilize Rents, Build Affordable Housing, and End New York City’s Housing Crisis. New York, NY: Campaign Policy Report, 2025.
Prakash, Gyan. Mumbai Fables.
“Renters and Recovery.” NYU Furman Center.
“Rising Inequality and Urban Exclusion.” Observer Research Foundation.
“South Mumbai Tenants May Have to Pay Higher Rent.” DNA India.
“The Apartments at the Center of Mamdani’s Affordable Housing Crisis.” The New York Times.
“The Genesis of Rent Control Legislation in Bombay.” Lexology.
“One of India’s Richest Minority Groups Enjoys Some of Mumbai’s Best Rents. Here’s Why.” CNN.
“Wrong-Headed Policies in the Name of the Poor: Case of Mumbai’s Cessed Buildings.” National Institute of Urban Affairs.
Discover more from A Little Bit of Existence
Subscribe to get the latest posts sent to your email.
A Little Bit of Existence 