Rental housing is predominantly an urban phenomenon. The percentage of households living in rental houses in urban areas far exceeds that in rural areas. Further, the percentage of tenant households has been much higher in larger cities than in the smaller sized cities. The single most common feature of the rental housing situation in most class I cities during 1961-81 is the decline in the percentage of households living in rental housing. Out of a total of 140 class 1 cities for which data on percentage of households residing in rental housing is available for the years 1961, 1971 and 1981, only 28 showed an increase in the proportion of such households. A majority (80 per cent) showed a decline. Despite the decline, rental housing continues to be a significant part of the total housing in urban India. In view of the need for rental housing- especially by the low and middle income groups in urban areas, this study reviews government’s existing policies relating to rental housing.