When Rent Takes 30% Of Income: What Tenant Payment Data Reveals About India’s Urban Affordability Crisis

Housing affordability in India’s major cities is increasingly becoming a question not just of whether households can secure a home, but how much of their monthly income they must commit to keeping it. Data from a recent report from Urban Land Institute points to a growing rental burden across urban centres, with a significant share of tenants spending more than 30 per cent of their income on rent.

According to the report, rent is the single largest line item in the monthly budgets of many urban tenants, with nearly half of tenants spending more than 30% of their monthly income on rent. The report also highlighted the substantial financial burden associated with rental security deposits, with Rs 1.26 trillion estimated to be locked with property owners across six major metros.

Mumbai Vs Delhi Vs Other Metro Cities: Rent Affordability Challenge 

The affordability challenge varies considerably by city. According to the Urban Land Institute’s 2025 Asia Pacific Home Attainability Index, rental apartments account for 53% of income in Mumbai, 48 per cent in Kolkata and 47 per cent in Hyderabad. Delhi NCR follows at 34 per cent, while Pune stands at 32 per cent. Bengaluru, Ahmedabad and Chennai are each at 29 per cent, underscoring the pressure faced by households in some of India’s largest employment and economic hubs.

Rent: A Key Driver Of Urban  Per-Capita Consumption 

At the national level, the Ministry of Statistics and Programme Implementation’s Household Consumption Expenditure Survey 2023–24 provides another perspective. The survey shows that rent represented 6.58 per cent of urban monthly per-capita consumption expenditure in 2023–24. Rent was among the major components of urban non-food expenditure, which accounted for around 60 per cent of overall urban consumption expenditure.

However, aggregate consumption figures can conceal the pressure faced by individual tenants, particularly those living in high-cost metropolitan markets. A household earning a moderate income may face a substantially higher rental burden than national averages suggest, especially when rent is considered alongside transportation, education, healthcare, and other recurring expenses.

How Experts See The Earning Vs  Rent Payment Phenomena In Cities  

Sarika Shetty, CEO & Co-founder of RentenPe, said, “For millions of urban Indians, affordability is no longer simply about whether they can find a home; it is about how much of their monthly income goes towards keeping one. 

According to Shetty,  rental-payment data has the potential to provide a more granular view of housing affordability, capturing rent-to-income ratios, payment consistency, delays and changes in rental burden over time. 

“This data could also create a new financial lens. A tenant who consistently pays Rs 40,000–Rs 50,000 in rent every month demonstrates a substantial recurring financial obligation. And potentially a pattern of payment behaviour that traditional credit assessments may not fully capture,” Shetty noted. 

The opportunity is to move from asking, “Can this person afford rent?” to understanding, “What does this person’s rental behaviour tell us about their financial capacity?” Shetty said, noting that shift could make rental data more than a measure of affordability. 

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Can Rental Behaviour Complement Financial Information?  Key Points 

• Traditional credit assessments largely focus on formal borrowing and repayment history, while regular rent payments represent another substantial recurring financial commitment for millions of households.

• As rental markets expand and home ownership becomes less immediately attainable for many urban households, the ability to interpret rental-payment patterns could become increasingly relevant for lenders, policymakers and housing stakeholders. 

• Such data could help distinguish between the headline cost of housing and the actual financial behaviour of tenants.

• Rental-payment data, if captured responsibly and with appropriate privacy safeguards, could provide a more granular financial signal while also offering a clearer picture of the pressures shaping India’s evolving urban housing market.