'PGs in Bengaluru are collapsing...': Analyst says the crisis is just beginning in the city

PGs are shutting down by the dozens in Bengaluru’s IT corridors and hardly anyone’s talking about it. “Turns out, this is a quiet crisis affecting thousands,” an investment analyst wrote after tracking the data behind a LinkedIn post.

Hardik Joshi took a closer look and uncovered a housing crisis quietly unfolding beneath the city’s tech boom.

The numbers paint a stark picture: PGs in areas like Mahadevapura and Marathahalli are losing up to 25% of revenue. More than 100 have already been sealed in Mahadevapura alone. An estimated two PGs now shut every day across the city’s tech belts.

The causes are compounding. Tech layoffs have slashed demand from young professionals—the core tenants for PGs. And new BBMP rules have made continued operations nearly impossible for many.

Joshi breaks it down: “PGs on roads

The BBMP now mandates trade licenses, hygiene and fire safety compliance, and bans PGs on roads narrower than 40 feet. For many budget operations—especially in older, denser neighborhoods—that’s a death blow.

Meanwhile, utility costs are rising. Electricity and water tariffs are eating into already thin margins. For PG operators, staying open without hiking rents is no longer viable.

Officially, only around 2,500 PGs are registered in a city that depends heavily on migrant workers and students. The irony, Joshi notes, is sharp: these PGs were often mocked as “chicken coops”—overpriced, overcrowded, poorly maintained. Yet for countless newcomers, they were the only way in.

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

All of this comes as the rest of the real estate market holds strong. Residential and commercial sectors are growing, infrastructure projects are expanding, and premium housing demand is surging.

But the base is cracking. And as Joshi’s observation shows, Bengaluru’s growth narrative may be skipping over the very people who built it.