Why Are PGs Shutting Down in Bengaluru? A Simpler Explainer on What’s Driving the Change

Entire buildings are going dark in Mahadevapura.

A year ago, these corridors were alive — the clatter of suitcase wheels on tiled floors, video calls to parents back home, PG kitchens humming with the smell of dal and rice, roommates trading job interview tips. Today, the gates are locked. Lights stay off. And in neighbourhoods that once offered thousands of young people their first foothold into Bengaluru, a strange kind of emptiness has crept in.

On some streets, two PGs are shutting down every single day.

What seemed like a temporary dip has quietly grown into something much bigger — what some are now calling an invisible housing collapse.

“It felt like a small blip in the real estate space,” wrote investment analyst Hardik Joshi in a LinkedIn post that went viral. “Turns out, this is a quiet crisis affecting thousands.”

Across parts of Marathahalli, Mahadevapura, Whitefield, and Electronic City, PG owners are now reporting something few imagined just a year ago — occupancy drops of 30 percent to 50 percent. The very buildings that once struggled to meet demand are now half-empty, many fighting simply to stay open.

So, what’s really happening? And why now?

1) The jobs that once filled PGs are disappearing

The first hit came from Bengaluru’s job market itself.

Mass layoffs swept through the IT sector over the past year. Remote work became more permanent for many companies. Hiring slowed. The steady stream of fresh graduates, interns, and first-job techies that once fuelled the city’s PG demand started to dry up.

“Even until last year, I had waiting lists,” Manjunath Rao, who runs a 60-bed PG in Brookefield, told Hindustan Times. Now, rooms stay vacant.

For many young people, Bengaluru is no longer a sure first move after college. With remote options or fewer job offers, many are staying back home, delaying their big-city shift — or skipping it entirely.

2) The rules got stricter — fast

While demand was shrinking, regulations tightened. The Bruhat Bengaluru Mahanagara Palike (BBMP) introduced a long list of new rules under its 2020 Act, and enforcement has picked up sharply.

PG operators now have to comply with:

• Mandatory trade licences
  
• At least 70 sq ft of living space per person
  
• Full fire safety, hygiene audits, CCTV coverage
  
• 135 litres of water per person per day
  
• FSSAI licences for any PGs serving meals
  
• Road width rules: PGs on roads narrower than 40 feet are being shut
  

“PGs on roads < 40 ft? Shut. PGs without trade licenses? Sealed,” Joshi summed up.

In April alone, over 100 PG kitchens in Mahadevapura were sealed. Many owners, already hit by fewer tenants, say they simply cannot afford the costs of meeting these sudden demands.

“I’ve been running this PG for 12 years. Nobody ever asked about the road width until now,” Shivani Singh, a PG operator in Whitefield, told Moneycontrol. She has shut down two of her three properties in just the last month.

3) The cost of compliance is crushing smaller operators

For PG owners, the issue isn’t just the rules — it’s the pace and cost of compliance.

Retrofitting buildings, widening access roads, upgrading safety systems, securing new licences — all of this requires investments many smaller operators simply don’t have. And with fewer tenants to spread those costs across, many are being forced to shut shop altogether.

Why this matters far beyond PG owners

For years, Bengaluru’s PGs offered something no other housing option really did: a soft landing.

• No hefty deposits
  
• No need to furnish a flat
  
• Lower upfront costs
  
• Shared meals, basic services, and a sense of community for newcomers
  

They may not have been perfect, but for thousands of students and first-job professionals arriving in an expensive city, PGs made Bengaluru possible.

“We’re not just watching a market correction,” Joshi wrote. “We’re watching a ladder disappear for thousands trying to step into Bengaluru’s promise.”

An informal sector now under pressure

While BBMP records show around 2,500 officially registered PGs, estimates suggest that more than 10,000 operate informally. This informal sector, long ignored, is now being aggressively targeted by inspections, fines, and closures.

Beyond the regulations, rising costs of electricity, safety upgrades, licensing fees, and taxes are making it increasingly unsustainable for many to continue.

Without PGs, many fear that Bengaluru could become even harder to enter for first-generation professionals, those from smaller towns, or anyone without strong financial support.

Signs of change: Could Bengaluru rebalance?

1) BBMP may review its stricter rules
In June 2024, BBMP officials confirmed they are re-examining some of the rigid guidelines — especially the 40-foot road-width rule that disqualified hundreds of PGs. While safety remains a priority, officials have acknowledged that a one-size-fits-all rule may not work for every neighbourhood.

2️) PG owners are engaging with civic bodies
Instead of confrontation, PG associations are opening structured dialogues with BBMP and Bengaluru Water Supply and Sewerage Board (BWSSB). Many are requesting that PGs be classified as residential units, which could significantly ease costs related to water, sewerage, and trade licences.

3️) A possible blueprint for balance
These discussions signal that Bengaluru may be inching towards a more balanced approach — one that allows for both safe, regulated PG operations and continued affordability for newcomers who rely on these transitional spaces.

Bengaluru has long been a city where first jobs, new dreams, and second chances come together. And while the PG sector faces some of its biggest challenges yet, these conversations offer a chance to rebuild — not by shutting doors, but by opening newer, better ones.

Edited by Khushi Arora

Sources

Crises-hit PGs on the brink in Bengaluru: by Deccan Herald, Published on 2 June 2025

Bengaluru PGs witness 25% loss after police, BBMP crackdown post Covid pandemic: by MoneyControl, Published on June 3 2025

Bengaluru's PG crisis: What's behind the mass shutdowns?: by India Today, Published on 10 June 2025

Bengaluru’s paying guest crisis: Why over 200 PGs have shut down, leaving owners with 20–30% losses: by Hindustan Times, Published 9 June 2025