For those students, housing is the single largest cost of moving and the part of the decision they have the least control over. A paying-guest bed with meals in the lanes off South Campus runs to about ₹16,000 a month. In Kamla Nagar, a room that cost around ₹12,000 in 2022 was letting for ₹18,000 within two years. These are not incidental expenses at the margin of an education. For most families, they are comparable to the fees, and they are paid into a market the state neither supplies nor supervises.
The lack of supervision in this market is easy to establish. The five-storey paying-guest facility that collapsed in Satya Niketan on September 6, killing seven, had no sanctioned building plan, an unauthorised basement, a fifth floor in excess of what the floor area ratio permits and no fire clearance. The municipal file on the property recorded no inspection, no complaint and no enforcement action of any kind. The same pattern produced June’s fire at a Hauz Rani guest house, which was running 26 rooms on a permit for six. Where inspection is unreliable, safety becomes one of the margins on which a supplier can economise. The administrative response has been identical each time — an arrest, a few suspensions, a demolition drive, then silence.
Individual culpability, however, explains very little. The engineers suspended after a collapse did not determine how Delhi would house the students it admits each year, and the owners arrested were meeting a demand that public provision had left unserved. Nor is the difficulty the city’s density, which is where this conversation usually ends up. Delhi is a dense city and will become denser, as Indian cities must if they are to remain productive. The distinction that matters is between density that has been planned, financed and inspected, and density that is improvised on plots too small to carry it, which is what the capital has permitted by default.
That improvisation is what antediluvian building norms designed for an era of horse-drawn carriages force a city to do. Delhi’s older colonies were built to a floor area ratio (FAR) of about 1.5, and much of the capital remains capped well below what comparable Asian business districts allow. Limiting how high a plot may rise does nothing to reduce the demand pressing on it; it raises the value of every unsanctioned floor instead. The regeneration provisions and additional FAR proposed in the new Master Plan address precisely this, and the sooner that framework is settled, the sooner rebuilding an ageing structure becomes financially viable.
Delhi University enrols more than 114,000 undergraduates across its three- and four-year programmes in 91 colleges and offers them 4,577 hostel beds, of which 3,145 are for women and 1,432 for men. Sri Venkateswara College, whose students live in the lanes where the building fell, has 4,500 students and only 150 hostel seats. Between 2019-20 and 2023-24, AISHE data shows student enrolment in Delhi growing at 2.75 per cent a year, hostel intake capacity at 1.06 per cent, and the number of hostels themselves at 0.37 per cent. A NITI Aayog committee in December 2025 put the national housing deficit at 50 million to 70 million units, and the households behind that figure are the ones the city runs on: Nurses, delivery riders, security staff, domestic workers, junior municipal employees.
India’s urban housing programme is focused on ownership. Beneficiary-led construction requires land, while the credit-linked subsidy requires documented income and a loan the household can afford. These conditions effectively exclude renters — who need housing for a few years and are on a monthly wage. Rental housing is the segment that reaches them, yet it is the one the state has built least of.
The returns from building it are well established. An International Labour Organization study covering 45 countries found construction output multipliers consistently above the economy-wide average, with every million dollars invested in middle-income economies generating roughly 3.6 times that amount in wider output. Construction also posted the highest real gross value added growth of any major Indian sector in 2024-25, at 8.6 per cent. Vienna has built on a cost-rental basis since the 1920s and now houses over 40 per cent of its households, dampening prices across the whole market rather than only for municipal tenants. Germany founded the Studentenwerke in 1921, and they now run more than 1,700 halls with some 196,000 places on a mix of fees, rents and subsidy.
A financing structure that fits is already under discussion in India: Public land leased on long tenure, rents regulated, and long-tenor debt serviced out of rental income rather than recovered from occupants in a few years. Applied to campus land, it answers the objection that debt-financed hostels will price out the students they are meant to house. The Lieutenant Governor, reviewing the collapse, cautioned that indiscriminate sealing would only leave students homeless and asked that student accommodation be examined through the universities, the Municipal Corporation of Delhi and the Delhi Development Authority. This is a welcome step. Regulation is one instrument for meeting Delhi’s housing demand and public provision is another, and the capital has relied heavily on the first while leaving the second largely to the market. A more even balance would serve the city better, and there is time to strike it.
The writer is chair, Institute for Competitiveness (IFC). Pradeep Puri, senior fellow at IFC, contributed to this piece. @kautiliya
 "Delhi's Satya Niketan building collapse")