It was reported that due to the growing number of educational institutions and coaching canters in the twin cities, particularly in Dharwad, there has been a proliferation of paying guest facilities. Since Hubballi and Dharwad are home to prestigious educational institutions and coaching centres, they have become the preferred choices of many students for their studies.

In response to the significant demand for PG centres, several residents have converted their residential properties and other real estate into commercial properties. These properties are being used to operate PG facilities without adhering to tax payments and without obtaining the necessary permissions from the HDMC.

In Hubballi, a considerable number of such PGs are currently operational, primarily concentrated in the Vidyanagar area. Most of these establishments have failed to secure permission from the HDMC. Similarly, Dharwad also houses numerous PG centres that do not conform to government regulations. During a recent general body meeting of the HDMC, many corporators emphasized the need to take action against these illegal PGs in order to boost the revenue of the HDMC.