The Indian Bankruptcy Code and the Real Estate Regulation Act

The Real Estate (Regulation and Development) Act was introduced in 2016 to protect consumers who had invested in residential real estate projects from malpractices by real estate developers. After the law was passed, most states established real estate regulatory authorities to register and oversee the conduct of real estate developers. 

What changes did this act try to bring in, and how has this regulatory change benefited consumers? Is the increased information about property litigation that the Maharashtra RERA provides affecting housing prices? Does RERA reduce information asymmetry in the housing market?

In this episode of Interpreting India, Vaidehi Tandel and Sahil Gandhi join Anirudh Burman to give us insights into these issues and more. They discuss their recent working paper, co-authored with Anupam Nanda and Nandini Agnihotri. Their study analyses how housing prices change in response to mandatory disclosures under the RERA. The paper is titled, “Do Mandatory Disclosures Squeeze the Lemons? The Case of Housing Markets in India.”

Episode Contributors

Vaidehi Tandel is an economist working in the areas of urban economics, political economy, and public finance, with a focus on India. Currently, Dr. Tandel is a lecturer in real estate and urban economics at the University of Manchester, UK. Her research has been featured in The Financial Times, The New York Times, The Straits Times, Livemint, and others. Her papers have been published in the Journal of Development Economics, the Journal of Urban Economics, the Journal of Regional Science, Environment and Urbanization, Cities, and BMJ Open, among others. Her current work looks at the politician-builder nexus in Mumbai, agglomeration economies in India, and climate change and adaptation across cities in developing countries.

Sahil Gandhi is an urban and real estate economist. Dr. Gandhi is a lecturer at The University of Manchester’s School of Environment, Education and Development. His research is in the fields of urban economics, real estate, and land economics. His recent papers are on vacant housing in India, migration and tenure choice, housing supply in Mumbai, and so on. His research has been published in the Journal of Urban Economics, the Journal of Development Economics, the Journal of Regional Science, Environment and Urbanization, and Cities, among others. He has also led a report on affordable housing in India. Dr. Gandhi has bylines in international and Indian media outlets such as The Washington Post, The Hindu, Hindustan Times, The Economic Times, and Livemint, among others. His research has also been cited in The Financial Times, The BBC, The Straits Times, Livemint, and more.

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Key Moments

(0:00); Introduction

(2:39); Chapter 1: The Context Behind RERA

(9:56); Chapter 2: Key Regulatory Changes

(15:21); Chapter 3: The Case of Maharashtra’s RERA

(17:27); Chapter 4: Mumbai’s High Proportion of Litigated Projects

(23:04); Chapter 5: The Aim and Findings of the Study

(27:35); Chapter 6: Variations Across Housing Submarkets 

(32:35); Chapter 7: Luxury Housing and Mandatory Disclosures

(35:02); Chapter 8: Non-Luxury Housing and Litigation Costs

(36:10); Chapter 9: RERA’s Impact on Low- and Middle-Income Consumers

(40:36); Chapter 10: Types of Litigation Faced by Projects

(43:44); Chapter 11: Future Research in Urban Economics

(48:22); Outro

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Additional Readings

Do Mandatory Disclosures Squeeze the Lemons? The Case of Housing Markets in India by Vaidehi Tandel, Sahil Gandhi, Anupam Nanda, and Nandini Agnihotri

Too Slow for the Urban March: Litigations and the Real Estate Market in Mumbai, India by Sahil Gandhi, Vaidehi Tandel, Alexander Tabarrok, and Shamika Ravi

View: Time to Make RERA Roar by Nandini Agnihotri and Sahil Gandhi

India Has to Attack Causes of Land Litigation. Modi’s Ease of Doing Business Depends on It by Anirudh Burman 

Making Land Titles in India Marketable: Using Title Insurance as a Viable Alternative to Conclusive Titling by Anirudh Burman

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