A Comprehensive Framework to Promote Affordable Housing

Background and Context

A Comprehensive Framework to Promote Affordable Housing: NITI Aayog released A Comprehensive Framework to Promote Affordable Housing to address persistent gaps in urban housing supply. The report positions affordable housing as a key driver of inclusive urban growth rather than a standalone welfare measure. Rising land prices, construction costs, and urban migration have made affordability a major policy concern.

Static GK fact: NITI Aayog was established in 2015, replacing the Planning Commission, to promote cooperative federalism and evidence-based policymaking.

Working Definition of Affordable Housing

The report provides a clear functional definition to ensure policy uniformity across states. In metropolitan cities, affordable housing is defined as dwelling units with a carpet area of up to 60 sq. m and a value not exceeding ₹60 lakh. In non-metropolitan cities, the limit is 90 sq. m with a value cap of ₹45 lakh.

PMAY-U 2.0 (2024) adopts the same carpet area norms but limits the housing value to ₹45 lakh, ensuring tighter affordability thresholds for beneficiary targeting.

Zoning and Urban Planning Reforms

Land availability is identified as a structural constraint in affordable housing supply. The report recommends earmarking at least 10% of residential land in city Master Plans and Town Planning Schemes exclusively for affordable housing. This institutionalises affordability within statutory urban planning frameworks.

Static GK Tip: Urban Master Plans are statutory documents guiding land use, transport, housing, and infrastructure development in cities.

Transit-Oriented Development Approach

The framework strongly promotes Transit-Oriented Development (TOD) to improve housing accessibility. Cities are advised to reserve land near metro and mass transit corridors for mixed-use development that integrates offices, commercial spaces, and affordable housing. This reduces commuting costs and improves labour mobility in urban centres.

Reservation for EWS and LIG Housing

To ensure social inclusion, the report mandates 10–15% reservation of built-up area for Economically Weaker Sections (EWS) and Low-Income Groups (LIG) in all housing and commercial projects exceeding 10,000 sq. m built-up area or 5,000 sq. m plot area. This prevents spatial segregation and encourages inclusive urban neighbourhoods.

Rental Housing Reforms and PPP Models

The report highlights the need to reform the rental housing legal framework, especially for migrant workers and informal sector employees. States are encouraged to create dedicated rental housing policies through Public-Private Partnership (PPP) models, aligned with the Affordable Rental Housing (ARH) vertical under PMAY-U 2.0.

Static GK fact: Rental housing reforms are critical for addressing short-term and seasonal urban migration patterns.

Financial and Fiscal Measures

To improve project viability, the framework recommends targeted fiscal incentives. These include tax benefits for developers, enhanced credit guarantees for low-income borrowers, and incentives for Real Estate Investment Trusts (REITs) investing in affordable housing projects. Reducing transaction costs such as stamp duty and land-use conversion charges is also proposed.

Broader Policy Significance

Affordable housing is closely aligned with Sustainable Development Goal 11, which focuses on making cities inclusive, safe, resilient, and sustainable. The framework strengthens India’s long-term urbanisation strategy by integrating housing with transport, employment, and infrastructure planning.

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A Comprehensive Framework to Promote Affordable Housing: