Does Regulating Developers Democratize Credit and Homeownership?

This study examines the impact of real estate developers on homeownership and the role of regulatory interventions. Over recent decades, developers have substantially influenced global homeownership trends. Despite their pivotal role, concerns persist over operational uncertainties, including project delays, cost overruns, defaults, and frauds. The implementation of Real Estate (Regulation and Development) Act (RERA) in India provides a unique regulatory context, introducing measures that enhance transparency, accountability, and consumer protection in the housing market. Analyzing data on 1.06 million individuals, our findings demonstrate that RERA significantly boosts mortgage origination, particularly benefiting first-time borrowers and marginalized groups. Moreover, RERA causes a shift towards more affordable housing, effectively mitigating delays, defaults, and enhancing overall market transparency. Our study contributes to the literature on government interventions in housing markets, illustrating how regulatory measures can democratize homeownership and reshape market dynamics