Where fresher-techies and students will stay in Bengaluru amid PG crisis, asks analyst? He gives two reasons why they are shutting down

Bengaluru, the Silicon Valley of India, once hailed as the gateway to every aspiring techie’s dreams, is quietly witnessing a housing meltdown, one that threatens the very foundation that fuels its migrant workforce. Paying Guest (PG) accommodations, long criticised for being cramped and overpriced, are now vanishing at an alarming rate. What was once dismissed as a minor real estate shift has now become a full-blown crisis, and it’s not just about IT layoffs anymore. It’s about survival, shelter, and the future of first-generation professionals chasing the Bengaluru dream.

In a recent LinkedIn post, investment analyst Hardik Joshi drew attention to the hidden scale of the issue. According to him, PG operators across tech hubs like Mahadevapura and Marathahalli are shutting shop—two PGs are closing every single day. He added that in Mahadevapura alone, over 100 PGs have already been sealed. The immediate triggers? A combination of mass layoffs in the IT sector and strict new compliance regulations was introduced by the Bruhat Bengaluru Mahanagara Palike (BBMP).

25% revenue loss

PGs, which once thrived on a steady inflow of students, fresh graduates, and entry-level tech workers, are now reporting revenue losses of up to 25%. Many of these accommodations operate on razor-thin margins and cannot afford the cost of compliance or sustain empty beds caused by tenant exits post-layoffs.



The new BBMP norms, framed under Section 305 of the BBMP Act, 2020, have made things even harder. PGs built on roads less than 40 feet wide are being shut down. Those without trade licenses are being sealed. Perhaps most jarring is the fact that out of the thousands of PGs operating in Bengaluru, only around 2,500 are officially registered.

New compliance rules by BBMP

Some of the new compliance rules include mandatory CCTV cameras at all entry and exit points, a minimum of 70 square feet of living space per resident, and 135 litres of clean water per person per day. PGs that serve meals must also now obtain an FSSAI food safety license within three months of getting a trade license.

Joshi’s post frames the issue as more than a real estate correction—he calls it a disappearing ladder. He likened PGs to chicken coops, which were the stepping stone for students and freshers arriving in a new city with big dreams. With this affordable housing option vanishing, the city’s accessibility is also eroding. He questions whether Bengaluru can continue to be India’s startup and tech capital if the very infrastructure supporting its workforce is dismantled.