India suffers from an acute national shortage of housing, estimated at 76 million dwelling units in 20091 including all income segments. The urban shortage was about 18.8 million dwelling units at the end of 2012.2 Due to the lack of housing in urban areas, many people live in inadequate conditions and slums have proliferated across the country. In Mumbai, for instance, about 53% of the population lives in slums; however, officially, only 15% are identified as the real poor. This led industry experts to comment that even the middle class is having difficulty finding housing that is not in slums or substandard conditions. Increasing urbanization from 28% in 2001 to 40% by 2030,4 nuclearization of families, positive demographics (more than 50% of the population is under 25 years of age), and rising incomes will increase demand for urban housing. Increased infrastructure development is improving connectivity within cities, allowing workers to live further away from their jobs at more suburban locations. The combination of high demand and relatively low organized supply, as well as new policy initiatives allowing foreign direct investment in real estate are contributing to the interest of reputed developers to enter the lower price segment. Shapoorji Pallonji and Company Private Limited (SPCPL or the sponsor) approached the Asian Development Bank (ADB) to invest in a housing platform to develop a portfolio of affordable housing projects. The project is considered to be one of the best opportunities for ADB to support affordable housing in India because of its high development impact and its strong and experienced sponsor. SPCPL is one of the first large, well-reputed developers to move into the affordable housing market with a structured approach. The definition of affordable housing differs around the world, although a commonly accepted guideline is that cost of housing should not exceed 40% of a household’s gross income. Income, size of dwelling, and affordability are three key parameters used to define affordable housing. KPMG and Knight Frank, an international property consultant, have outlined a useful affordable housing definition in India (Table 1).5 Affordable housing is distinct from the Indian high-end real estate market, which recently experienced a boom. Affordable housing is a low-margin (but stable), mass-market business with an estimated market size of Rs3 trillion ($50 billion) in India’s seven largest cities alone (footnote 5). A key factor that determines financial success of the affordable housing segment is low overall cost, which includes (i) low cost of land, (ii) low construction cost, (iii) efficient implementation of construction, (iv) access to low-cost capital, (v) innovative marketing skills, (vi) dedicated organizational focus, and (vii) good government relations to obtain all required licenses in a timely manner.