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Affordable housing norms may see overhaul, says Housing minister Manohar Lal Khattar - BusinessToday

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  Published in House and Home on Saturday, August 30th 2025 at 9:19 GMT by Business Today
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Housing Minister Manohar Lal Khattar Signals a Major Shake‑up of Affordable‑Housing Rules

In a bid to curb the spiralling cost of homes and meet the mounting demand for affordable housing across the National Capital Region, Haryana’s Housing Minister and Chief Minister, Manohar Lal Khattar, announced today that the state is preparing to overhaul its affordable‑housing norms. The move comes as part of a broader, nationwide push to overhaul the regulatory framework governing low‑income residential projects, a theme that has been echoed by several other states and central authorities in recent weeks.

Why a Change Is Needed

India’s housing sector has long been plagued by a mismatch between supply and demand, especially in high‑density metros. The National Affordable Housing Policy (NAHP), launched in 2019, sought to raise the share of affordable homes in the real‑estate market from a mere 5 % to 20 % by 2030. Yet, the policy’s “affordable” label has proved largely symbolic, as the actual cost of land, construction and financing keeps pushing the price of a typical 1,200 sq ft apartment well above the income threshold for a first‑time buyer.

In Haryana, the situation is no different. Khattar, who has overseen the state’s housing agenda for the last six years, pointed out that the current norms—particularly the minimum plot size of 300 sq m and a Floor‑Area‑Ratio (FAR) ceiling of 3.0—constrain developers’ ability to build in a cost‑effective manner. “When you have to buy or lease a plot that is 300 sq m, the price alone can eat up 30 % of the budget of a middle‑class household,” Khattar said at a press conference in Gurugram. “We need to re‑examine our rules so that affordable homes become truly affordable.”

What the Proposed Overhaul Looks Like

The details of the proposed changes have not yet been fully fleshed out, but Khattar outlined a few key areas that the state intends to tackle:

In addition, Khattar stressed that the state will explore public‑private partnerships (PPP) that allow the government to supply land at subsidised rates or grant tax‑exempt status for a certain period. “A collaborative approach will not only share risk but also accelerate delivery,” he said.

The Policy Landscape

The state’s plan is in line with the recent directives issued by the Ministry of Housing and Urban Affairs (MoHUA) to the states. In a circular last month, MoHUA urged states to revise their “Affordable Housing Norms” (AHNs) so that the norms are more realistic and aligned with current market conditions. This is part of a larger national effort that includes the “Housing for All” program, which seeks to deliver 20 million affordable homes by 2030.

The Affordable Housing Norms were originally drafted in 2017 under the National Housing Policy and were meant to provide a framework for developers, financiers and local bodies. The recent calls for revision are a direct response to criticism that the norms are too rigid and, in many cases, counter‑productive.

For developers, the old norms meant having to purchase or lease large plots that were difficult to finance. For families, it meant that even the most basic of homes could cost more than a year's income. The proposed changes aim to reverse this trend.

Expected Impacts

If the revised norms are enacted, the state expects a domino effect across the sector:

1. Increased Project Viability – With lower land costs and a higher FAR, developers can build more units on the same piece of land, making projects financially viable.
2. Lower Unit Prices – By targeting construction cost reductions, developers will be able to pass on savings to buyers.
3. Accelerated Delivery – Streamlined approval processes and subsidies are likely to cut down the time between project initiation and handover.
4. Greater Equity Access – More families will be able to qualify for affordable housing schemes, especially those who rely on subsidies or lower interest rates.

The state has already announced a partnership with the Haryana Housing Development Board (HHDB) to pilot a few projects under the new norms, with a projected launch timeline of early 2026.

What’s Next

Khattar said that the state is currently in the “consultation phase” with the housing lobby, local authorities, and financial institutions. The process will involve:

1. Stakeholder Workshops – Bringing together developers, architects, bankers and consumer groups to refine the details.
2. Policy Drafting – Based on feedback, the state’s legislative assembly will review and pass new amendments.
3. Implementation Framework – Setting up a task force to oversee rollout, monitor compliance, and ensure transparency.
4. Monitoring & Evaluation – An independent audit will assess whether the new norms achieve their objectives in terms of price, delivery, and social impact.

The final policy is expected to be presented to the Haryana Assembly by the end of the fiscal year, with a target to enact it by March 2026. If all goes as planned, the state could see a 10‑15 % increase in the stock of affordable homes by 2028.

Conclusion

Manohar Lal Khattar’s announcement marks a significant pivot in Haryana’s approach to affordable housing. By revisiting the very rules that govern land acquisition, construction costs, and subsidy mechanisms, the state is taking a bold step to make homes truly affordable for the masses. While the details are still under negotiation, the framework laid out today offers a hopeful blueprint for states across India that are grappling with the same affordability crisis. As the policy moves from concept to execution, all eyes will be on Haryana to see whether a more flexible, consumer‑centric approach can finally bridge the gap between the dream of homeownership and the reality faced by millions of Indian families.