The attitude of the state agencies with respect to the issues governing rental housing for the general public became adverse on account of the problems that arose with the maintenance of structures and services in the rental housing colonies. Most of these problems were due to organizational and financial problems. Though they were exempted from the Rent Control Act, the state agencies felt themselves constrained to adhere to the original subsidized rents even as the cost of maintenance increased steadily.

As the gap between the subsidized and economic rents widened, there was a demand from many quarters for increasing the incentives for the tenants so as to capitalize on the difference in the form of a gain in money, and to install another tenant in his place in an unauthorized manner.

At the same time, the agencies found it increasingly difficult to raise sufficient resources to do the basic maintenance works and other infrastructure up gradation works. Consequently, the rental housing structures of the state agencies became as dilapidated and some state governments were forced to devise the solution of offering the rental tenements on long-term hire purchase to the existing occupants.

The boom in real estate in Kerala led to a different situation. The government agencies made a quick exit from the hot most happening market. The private sector started calling the shots. None of the government agencies could succeed in revolutionizing this sector as has happened in recent times due to the freedom given to the leading private builders and realtors. The rentals in the key city centers of the state have already climbed to astronomical levels. To the bygone generation, it is literally difficult to believe such newer developments. The boom in the real estate market can be gauged from the prices being quoted for flats and apartments in the up market areas of the cities. In certain parts of Kochi and Trivandrum, the cost of a single apartment has already gone up above one crore rupees and the interesting thing is that there are many people who are willing to pay this high cost.