logo
Bengaluru's paying guest crisis: Why over 200 PGs have shut down, leaving owners with 20–30% losses

Bengaluru's paying guest crisis: Why over 200 PGs have shut down, leaving owners with 20–30% losses

Hindustan Times12 hours ago

More than 200-300 paying guest (PG) accommodations in Bengaluru have shut down after the city's local municipal corporation, Bruhat Bengaluru Mahanagara Palike (BBMP) implemented stringent rules for PG operation in the tech capital, Sukhi Seo, secretary of the Bengaluru PG Owners' Association, told HT.com.
Around 2,500 PGs are currently certified in Bengaluru, Seo said, but out of over 12,000 PGs in the city, over 10,000 are still operating 'illegally' without proper approvals. "This is causing concern for investors, as BBMP can conduct raids on non-compliant properties at any time. PG business, once considered a profitable real estate investment in the city, is seeing a downfall," she said.
Last year, the BBMP introduced new regulations for paying guest accommodations under Section 305 of the BBMP Act, 2020.
One of the key requirements is the mandatory installation of CCTV cameras. All PG facilities must now have surveillance systems covering all entry and exit points, as well as common areas across the property. Another rule focuses on living space, each resident must be allotted at least 70 square feet, which will be a condition for receiving or renewing a licence, experts said.
In terms of water supply, operators are required to provide a minimum of 135 litres of clean water per person each day. For PGs offering meals or cooking facilities, obtaining a licence from the Food Safety and Standards Authority of India (FSSAI) is compulsory. This must be secured within three months of receiving a trade licence from the BBMP, they said.
In April, BBMP health officials in the Mahadevapura zone shut down the kitchens of around 100 paying guest accommodations due to breaches of town planning norms and licensing requirements. According to BBMP officials, many of these PGs were operating in violation of zoning laws, which restrict commercial use in residential neighbourhoods where roads are narrower than 40 feet.
Also Read: BBMP shuts down 21 PGs in Bengaluru over safety violations in city-wide drive: Report
Several PG owners HT.com spoke to said most of them are running on 20-30% losses today compared to the profitable business it once was.
Typically, return on investment (ROI) in the PG sector is close to 6-8%, way higher than apartments that command a rental yield of 3-4% in Bengaluru. This led to several owners rapidly investing in the sector to capitalise on the returns, Kiran Kumar, vice president of Hanu Reddy Realty, said.
"In prime areas, owners are asking for ₹8,000 to ₹10,000 per bed, depending on the sharing type. For double sharing, the cost often exceeds ₹10,000-15,000. But if we raise rents any further, tenants tend to leave. On top of that, the Bangalore Water Supply and Sewerage Board has increased water charges, which are adding to the expenses. Many PG owners are now running at a loss because they can't pass on the additional costs to tenants," Seo said.
Earlier, it was a profitable business. But now, electricity is charged at commercial rates, and there are additional commercial taxes, she said.
Also Read: Karnataka: MBA intern found dead in Belagavi PG, police probe underway
Civic experts have raised concerns over the growing irregularities in Bengaluru's paying guest (PG) accommodations, describing the sector as highly unregulated and increasingly problematic.
'PG owners ignore construction bylaws, tie up with real estate brokers to aggressively market the properties, and build way beyond approved limits. In prime areas like Whitefield, many PGs have nearly double the permitted number of floors. This puts pressure on local infrastructure, especially water supply, and adds to congestion, as these buildings house far more tenants than planned," said Sandeep Anirudhan, Convenor of the Coalition for Water Security and a civic expert.
He pointed out that buildings over 21 meters in height are supposed to get a fire NOC. But PG owners stop at the threshold, around 7 to 8 floors, to avoid the requirement. "This creates dense clusters of people in limited spaces, and unapproved commercial setups like restaurants start popping up within residential zones. It is leading to the complete breakdown of planned neighbourhoods."
'The only solution is strict enforcement of existing laws. The government must intervene and regulate the PG sector with strong bureaucratic action,' he noted.

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

E-Khata mandatory for all building plan approvals in Bengaluru from July 1: BBMP
E-Khata mandatory for all building plan approvals in Bengaluru from July 1: BBMP

Hindustan Times

time22 minutes ago

  • Hindustan Times

E-Khata mandatory for all building plan approvals in Bengaluru from July 1: BBMP

In a move to streamline the building plan approval process, Bengaluru's civic body, Bruhat Bengaluru Mahanagara Palike (BBMP), has announced that submission of an e-Khata will be mandatory for all online building plan applications starting July 1, 2025. "Starting from July, it will be mandatory to enter the property's e-Khata/electronic property ID number into the online software and submit the corresponding e-Khata when applying for building plan approval," a statement issued by BBMP said. The measure is expected to bring greater transparency and efficiency to the city's real estate approval systems. Currently, the BBMP offers online building plan approval services through the Ease of Doing Business, Online Building Plan Approval System (EoDB-OBPS), while property records and e-Khatas are managed through the E-Aasthi platform operated by the revenue department. Property ownership details and tax information for holdings within BBMP limits are already available on E-Aasthi. Also Read: Bengaluru's paying guest crisis: Why over 200 PGs have shut down, leaving owners with 20–30% losses BBMP officials said the two digital systems, Eodb-OBPS and E-Aasthi, are now being integrated to eliminate duplication and delays. From July 2025 onwards, builders and property owners applying for plan approvals will be required to enter their property's e-Khata or EPID (electronic property ID) number into the OBPS portal. According to the statement issued by BBMP, the system will then automatically cross-verify property tax records, thereby removing the need for manual submissions or verification by the revenue department. Officials say this step is part of a broader strategy to digitise urban governance and improve service delivery timelines. Once implemented, applicants will no longer need to forward ownership records separately to BBMP's Revenue Department for verification, a step that often caused delays in the approval process. Additionally, the BBMP is enhancing its accountability framework under a 'Trust and Verify' approach. According to new guidelines, assistant directors (town planning) must either approve or reject preliminary plans with valid reasons within a stipulated timeline. If they fail to act, the system will automatically trigger a deemed approval. In such cases, joint directors (town planning) must report inaction to zonal commissioners, who are empowered to initiate disciplinary proceedings under existing service rules, the statement said. Officials believe this integration between e-Khata and OBPS marks a critical step in digitizing the end-to-end building permission workflow, reducing manual interventions, and making the approval process more predictable for homebuilders and developers.

Bengaluru's paying guest crisis: Why over 200 PGs have shut down, leaving owners with 20–30% losses
Bengaluru's paying guest crisis: Why over 200 PGs have shut down, leaving owners with 20–30% losses

Hindustan Times

time12 hours ago

  • Hindustan Times

Bengaluru's paying guest crisis: Why over 200 PGs have shut down, leaving owners with 20–30% losses

More than 200-300 paying guest (PG) accommodations in Bengaluru have shut down after the city's local municipal corporation, Bruhat Bengaluru Mahanagara Palike (BBMP) implemented stringent rules for PG operation in the tech capital, Sukhi Seo, secretary of the Bengaluru PG Owners' Association, told Around 2,500 PGs are currently certified in Bengaluru, Seo said, but out of over 12,000 PGs in the city, over 10,000 are still operating 'illegally' without proper approvals. "This is causing concern for investors, as BBMP can conduct raids on non-compliant properties at any time. PG business, once considered a profitable real estate investment in the city, is seeing a downfall," she said. Last year, the BBMP introduced new regulations for paying guest accommodations under Section 305 of the BBMP Act, 2020. One of the key requirements is the mandatory installation of CCTV cameras. All PG facilities must now have surveillance systems covering all entry and exit points, as well as common areas across the property. Another rule focuses on living space, each resident must be allotted at least 70 square feet, which will be a condition for receiving or renewing a licence, experts said. In terms of water supply, operators are required to provide a minimum of 135 litres of clean water per person each day. For PGs offering meals or cooking facilities, obtaining a licence from the Food Safety and Standards Authority of India (FSSAI) is compulsory. This must be secured within three months of receiving a trade licence from the BBMP, they said. In April, BBMP health officials in the Mahadevapura zone shut down the kitchens of around 100 paying guest accommodations due to breaches of town planning norms and licensing requirements. According to BBMP officials, many of these PGs were operating in violation of zoning laws, which restrict commercial use in residential neighbourhoods where roads are narrower than 40 feet. Also Read: BBMP shuts down 21 PGs in Bengaluru over safety violations in city-wide drive: Report Several PG owners spoke to said most of them are running on 20-30% losses today compared to the profitable business it once was. Typically, return on investment (ROI) in the PG sector is close to 6-8%, way higher than apartments that command a rental yield of 3-4% in Bengaluru. This led to several owners rapidly investing in the sector to capitalise on the returns, Kiran Kumar, vice president of Hanu Reddy Realty, said. "In prime areas, owners are asking for ₹8,000 to ₹10,000 per bed, depending on the sharing type. For double sharing, the cost often exceeds ₹10,000-15,000. But if we raise rents any further, tenants tend to leave. On top of that, the Bangalore Water Supply and Sewerage Board has increased water charges, which are adding to the expenses. Many PG owners are now running at a loss because they can't pass on the additional costs to tenants," Seo said. Earlier, it was a profitable business. But now, electricity is charged at commercial rates, and there are additional commercial taxes, she said. Also Read: Karnataka: MBA intern found dead in Belagavi PG, police probe underway Civic experts have raised concerns over the growing irregularities in Bengaluru's paying guest (PG) accommodations, describing the sector as highly unregulated and increasingly problematic. 'PG owners ignore construction bylaws, tie up with real estate brokers to aggressively market the properties, and build way beyond approved limits. In prime areas like Whitefield, many PGs have nearly double the permitted number of floors. This puts pressure on local infrastructure, especially water supply, and adds to congestion, as these buildings house far more tenants than planned," said Sandeep Anirudhan, Convenor of the Coalition for Water Security and a civic expert. He pointed out that buildings over 21 meters in height are supposed to get a fire NOC. But PG owners stop at the threshold, around 7 to 8 floors, to avoid the requirement. "This creates dense clusters of people in limited spaces, and unapproved commercial setups like restaurants start popping up within residential zones. It is leading to the complete breakdown of planned neighbourhoods." 'The only solution is strict enforcement of existing laws. The government must intervene and regulate the PG sector with strong bureaucratic action,' he noted.

CCPA's advisory on dark patterns sent to over 50 online platforms
CCPA's advisory on dark patterns sent to over 50 online platforms

Business Standard

timea day ago

  • Business Standard

CCPA's advisory on dark patterns sent to over 50 online platforms

India's consumer protection watchdog recently issued an advisory to over 50 online platforms, asking them to eliminate dark patterns and conduct self-audits in three months. The Central Consumer Protection Authority (CCPA) sent the directive not just to e-commerce giants such as Amazon and Flipkart, but also to travel aggregators, food-tech platforms, ride-hailing firms, meditech start-ups, streaming services, and fintech companies. Business Standard reviewed a copy of the June 5 email, which noted ongoing instances of dark pattern use despite existing guidelines. In some cases, the CCPA said it had issued notices. The advisory cited Rule 4(9) of the Consumer Protection (E-Commerce) Rules, 2020, which mandates that consumer consent for purchases must be explicitly obtained — not automatically recorded through pre-ticked checkboxes or similar mechanisms. Flipkart, in a statement, said the company welcomes the CCPA's emphasis on fostering online consumer confidence. "At Flipkart, our commitment to develop & run an open, transparent, technology driven marketplace focused on our customers is in complete sync with the government's focus. Our active collaboration with the government and other stakeholders has been key to jointly shaping a responsible e-commerce ecosystem. We constantly keep assessing and self-audit requirements to ensure comprehensive and timely compliance , and we see this advisory as a reaffirmation of the values already central to our Flipkart Marketplace Platform," the statement added. Another platform acknowledged the advisory but noted that the dark pattern guidelines are not legally binding. It argued that such practices are not an industry-wide issue and that firms experiment with design elements to boost engagement and sales. Business Standard wrote to platforms including Amazon, Meesho, Apple, Uber, BookMyShow, Paytm, Namma Yatri, Meta, Nykaa, Zomato, Swiggy, BigBasket, Tata 1mg, and Snapdeal. However, these queries did not elicit a response till the time of going to press.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store