Why Your Dream of an Affordable Home Is Getting Harder and the Big Land Reform NITI Aayog Wants
New Delhi, August 12, 2026: For millions of families looking for a home in India's cities, the biggest problem may not be the cost of construction or even the home loan. It is increasingly the cost and availability of land itself.
NITI Aayog Member Rajiv Gauba has now put the issue at the centre of India's affordable housing challenge, calling for major changes in land supply, urban planning and development rules to make homes more accessible.
The recommendations could eventually affect where affordable housing is built, how much can be constructed on a plot and how much buyers ultimately have to pay.
Why Affordable Homes Are Becoming Difficult to Build
As more people move to cities for jobs, education and better opportunities, demand for housing continues to rise.
But when suitable land is scarce and expensive, developers face higher project costs. Those costs eventually affect the price paid by homebuyers.
Gauba said land availability is at the heart of the affordable housing problem and argued that states and municipal authorities need to make more land available while simplifying development regulations.
NITI Aayog Wants 10% of Residential Land Reserved for Affordable Housing
One of the key recommendations in the NITI Aayog and Ministry of Housing and Urban Affairs report is to reserve at least 10% of residential land in master plans for affordable housing zones.
The proposal is aimed at ensuring that affordable housing is not treated as an afterthought but becomes part of the city's planned growth.
For homebuyers, this could eventually mean a larger supply of homes in locations connected to the wider urban infrastructure instead of affordable housing being pushed farther away from established city areas.
Higher FAR Could Mean More Homes on the Same Land
The report also recommends increasing the permissible Floor Area Ratio (FAR) to around 5 or 6 for affordable housing projects.
In simple terms, higher FAR can allow developers to build more floor area on a given piece of land.
If implemented carefully, this could help spread land costs across a larger number of homes and improve the financial viability of affordable housing projects.
The recommendations also include:
- Transit-oriented development
- Land pooling
- Transferable Development Rights
- Easier parking and density norms
- Creation of land banks
Government Land Could Become Part of the Solution
A particularly important suggestion is to make better use of land already held by government entities.
NITI Aayog has pointed out that state public sector undertakings and other government bodies hold excess or unutilised land that could potentially be brought into affordable housing projects.
This could be significant because acquiring fresh land in major cities can be extremely expensive.
Instead of allowing suitable government land to remain unused, authorities could potentially recycle it for housing projects aimed at families who struggle to afford homes in the private market.
Could Stamp Duty and Land Charges Also Come Down?
NITI Aayog has also suggested measures that could reduce the cost of affordable housing projects.
These include considering:
- Waiver of land-use change charges for land dedicated to affordable housing
- Exemption of affordable housing units from stamp duty
- Easier development norms
If states adopt such measures, the benefit could potentially reach both developers and buyers by lowering the overall cost of delivering a home.
However, these are recommendations rather than an immediate nationwide change in property costs. Their impact will depend largely on how individual states and local authorities implement them.
Affordable Housing Is Not Only About Buying a Home
The discussion also goes beyond home ownership.
Gauba highlighted the need to strengthen India's rental housing ecosystem, particularly for migrant workers, industrial labourers, students and young professionals.
For someone who moves to a city for a job, buying a home immediately may not be financially practical. A well-functioning rental market can therefore be an equally important part of the affordable housing system.
India Has Nearly 1 Crore Vacant Urban Homes
At the same time, India faces an unusual situation: a large number of homes already exist but are not being offered in the rental market.
Gauba pointed to nearly 1 crore vacant houses in urban India.
Weak tenancy regulations, low rental returns and concerns about litigation are among the factors keeping some of these homes outside the rental market.
Unlocking even a portion of this existing housing stock could increase rental supply without requiring the construction of an entirely new home.
The Bigger Problem Is Not Just Housing Supply
The recommendations highlight a larger reality for India's property market.
Building more homes alone will not necessarily make them affordable if land remains expensive, approvals remain complicated and urban planning does not provide enough development capacity.
For buyers, the real benefit will come only if these reforms eventually translate into more homes at locations people can actually afford, with access to jobs, transport and basic services.
What Happens Next?
Most of the proposed reforms will require action from state governments, municipal bodies and urban development authorities.
NITI Aayog has urged the Ministry of Housing and Urban Affairs to use funding under various government missions to encourage states to implement the reforms and create a time-bound action plan.
For homebuyers, the message is important: the next phase of India's affordable housing story may depend less on launching another housing scheme and more on changing how cities plan, price and release land for homes.