Goa's Homestay and B&B Policy: A Threat to Green Cover and Local Communities

The slogan ‘enough is enough’ is reverberating all over Goa as the tiny state is reeling under the weight of cement and concrete. The march of destruction goes unabated. Sections 16B (now deleted), 17(2) (almost read down), and 39A (under challenge) of the TCP Act are the key drivers of that destruction, with absolute discretion believed to be exercised on a ‘suitcase to suitcase basis’. But what is at the root of it? Why such a requirement to destroy green cover and hills?

About two decades back, with the boom in the tourism sector, second homes for the rich and elite of north India drove the real estate sector in Goa. Trends show that, globally, vacation homes are often near water and in hilly or mountainous areas. Goa has both water and hills in abundance, and these areas are facing threats from this trend, leading to the concretization of shorelines and slopes.

It all started in 2007 when Brian Chesky and Joe Gebbia rented out air mattresses in their living room to offset high rents in San Francisco. The short-rental concept of B&B got developed to help people rent out unused rooms for tourism purposes. Such proposals help locals earn extra income. Homestay policies allow tourists to stay in the home of a local alongside the host family, offering a cultural exchange and making it more affordable for visitors. For hilly terrains, it was a great idea where existing houses could be used for sustainable tourism without any extra load on the environment.

However, in less than two decades, short-rentals have led to huge investment portfolios and real estate speculation, driving the economies of tourism countries. Houses, apartments, villas, and condos are now income-generating assets. The second home, which was originally a vacation home, is now a high-yielding property. The COVID-19 pandemic and work-from-home flexibility have accelerated the buying of houses for renting out. Earlier, it may have been a status statement to say, ‘I have a property in Goa,’ but now it is, ‘I have a business in Goa.’

The short supply of rental spaces has pushed rents to unbelievable levels, leading to the collapse of cities. If Barcelona and New York have taken effective steps to restrict short rental companies, it is only because they recognize the impact on locals, society, and the environment. If the unavailability of long-term rental spaces for residential use is a concern in other countries, Goa, which has only limited land area, has an additional concern: the irreparable damage to hills, the countryside, and the shoreline to sustain an economic model built on leisure for the rich.

A report prepared for the Goa Tourism Development Corporation (GTDC) by the research and analysis unit of KPMG (post-COVID) reveals that flats used as vacation homes were about 100% unregistered, and villas were at 98%. At a time when the world is facing housing concerns, affordability of housing, and community displacement due to B&B, instead of placing restrictions on the use of apartments and villas for tourism purposes, the Goa government has further facilitated the use of residential areas by the Homestay and B&B policy.

As per the policy, an establishment with a minimum of two lettable rooms and a maximum of six rooms can be ‘let’ out. A homestay, which necessarily involves the family as a host, the use of the term ‘promoter’ (one who holds power of attorney or an agent) has completely distorted the homestay policy. A homestay in India works on the principle of using existing houses, but the Goa policy makes no distinction between existing houses and new constructions. In fact, the policy accelerates the construction of apartments and villas for tourism purposes.

In Goa, where very few housing cooperative societies are formed, it is a free-for-all for investors to take advantage of the registration policy. There is also no limit to the number of registrations a party can hold, creating management holding keys of apartments and vacation homes. An entire building could be a homestay/B&B, or some apartments in a building could become a homestay/B&B, leading to the misery of actual first-home buyers. A residential building with, say, 20 apartments for short-term rentals would almost be a hotel with all domestic charges. Imagine three homestays each with six rooms, built near each other with a swimming pool, forming an 18-room boutique hotel!

Hundreds of apartments and villas with swimming pools, despite water scarcity, have been affected by the government policy. The rich and elite from north India are driving this sector. Apartments are planned, built, advertised, and sold to be used as per the policy. The KPMG report could have been used to streamline the tourism sector, but that opportunity has been frittered away for the benefit of a few, mostly the rich from the north. For a registration fee of Rs 1000 in the case of a homestay and Rs 5000 in the case of a B&B, the policy is only a scandal. As the government gets a pittance, who makes a killing is anybody’s guess!

With land in short supply, the green cover and slopes are under attack, with the TCP department ready to play the ball. In Goa, industrial estates came up in almost every taluka with no provisions for housing the workers, leading to illegal shanties and slums all over the state, particularly in the suburbs. Neither the government nor the investors and real estate companies looked at the needs of the lower-income classes as second homes were a lucrative business, and now it is short-term rentals through a government policy. The western world is moving to contain the trend, but Goa is moving in another direction.