Rapid urbanization in Bhutan has led to a surge in demand for affordable housing. This article, based on reports, scholarly papers, and policy documents, looks at the prominent challenges for national and local governments in providing affordable housing. It draws applicable and potentially transferable lessons from case studies of Vienna and Singapore which have successful housing programs. Some lessons learned are the innovative use of government land to deliver affordable housing, the need for a central coordinating agency, commitment from the government, and the participation of private developers in solving housing issues.

Two key urban challenges in Bhutan are the rapid rate of urbanization and the limited availability of land for development. It is reported that the country has the highest urbanization rate (2000-2010) among South Asian countries. This has resulted in increasing pressure on urban infrastructures and social services, especially in the capital, Thimphu, and Phuntsholing in the south. This article explores the policies and strategies that can improve the affordable housing delivery system, by highlighting the case of Phuntsholing.