The paper reviews a few international historical precedents of affordable housing and examines the sustainability of current Indian affordable housing policy. The historical experiences examined suggest that heavily-subsidized public housing, pro-poor housing finance subsidies, site-and-service programs, and slum rehabilitation schemes would be hardly sufficient to bridge the increasing supply-and-demand gaps in low-income housing segments, and it is inevitable that sustainable solutions have to come from the market for creating mass housing stocks which comprises both owned and rental housing. An assessment of the Rajasthan Affordable Housing Policy suggests that an integrated approach of urban development and housing is essential for achieving the sustainable housing development solutions.

An important shortcoming of the approach is that it is mainly supply driven, ignoring the importance of providing housing options for people based on their demand, particularly in rental housing. A viable housing development framework would necessarily entail a two-pronged strategy, which comprises (existing) in-situ slum rehabilitation, wherever they are viable, and (yet-to-be-properly-established) demand-responsive, market-based mass housing development promotion and management. Although these perspectives are reflected in the national affordable housing guidelines, this paper primarily focuses on articulating the latter part of the two pronged strategy and examines the enabling conditions required for attracting private sector investments in mass housing provision through an integrated strategy of (mass) transit-oriented development and private sector housing development.