Bengaluru's PG Crisis: A Silent Collapse Amidst Tech Boom
While Bengaluru's real estate market remains robust, the city's PG (paying guest) accommodations are facing a severe crisis. PGs, often criticized as 'chicken coops,' are shutting down by the dozens, leaving thousands of newcomers without affordable housing options.
Pg CrisisBengaluruReal EstateTech LayoffsBbmp RulesReal EstateJun 07, 2025
Hardik Joshi took a closer look and uncovered a housing crisis quietly unfolding beneath the city’s tech boom.
The numbers paint a stark picture: PGs in areas like Mahadevapura and Marathahalli are losing up to 25% of revenue. More than 100 have already been sealed in Mahadevapura alone. An estimated two PGs now shut every day across the city’s tech belts.
The causes are compounding. Tech layoffs have slashed demand from young professionals—the core tenants for PGs. And new BBMP rules have made continued operations nearly impossible for many. The BBMP now mandates trade licenses, hygiene and fire safety compliance, and bans PGs on roads narrower than 40 feet. For many budget operations—especially in older, denser neighborhoods—that’s a death blow.
Meanwhile, utility costs are rising. Electricity and water tariffs are eating into already thin margins. For PG operators, staying open without hiking rents is no longer viable.
Officially, only around 2,500 PGs are registered in a city that depends heavily on migrant workers and students. The irony, Joshi notes, is sharp: these PGs were often mocked as “chicken coops”—overpriced, overcrowded, poorly maintained. Yet for countless newcomers, they were the only way in.
“We’re not just watching a market correction,” he wrote. “We’re watching a ladder disappear for thousands trying to step into Bengaluru’s promise.”
All of this comes as the rest of the real estate market holds strong. Residential and commercial sectors are growing, infrastructure projects are expanding, and premium housing demand is surging. But the base is cracking. And as Joshi’s observation shows, Bengaluru’s growth narrative may be skipping over the very people who built it.
Frequently Asked Questions
What is the current state of PGs in Bengaluru?
PGs in Bengaluru's IT corridors are facing a severe crisis, with many shutting down due to a combination of tech layoffs and new BBMP regulations.
Why are PGs closing down in Bengaluru?
PGs are closing due to reduced demand from young professionals, new BBMP rules mandating trade licenses and safety compliance, and rising utility costs.
How many PGs have been sealed in Mahadevapura?
More than 100 PGs have been sealed in Mahadevapura alone, with an estimated two PGs shutting down every day across the city's tech belts.
What are the new BBMP rules affecting PGs?
The new BBMP rules mandate trade licenses, hygiene and fire safety compliance, and ban PGs on roads narrower than 40 feet.
What impact does this have on newcomers to Bengaluru?
The closure of PGs leaves thousands of newcomers without affordable housing options, potentially hindering their ability to integrate into the city's workforce and community.
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