The housing market in urban India has traditionally focused on the top end of the market with the lower income segments virtually unserved. In the wake of the economic downturn however, the demand for premium homes is languishing and developers are now focusing on middle income segments – but the real area of opportunity is lower income segments. Households earning between Rs. 7,000 – 25,000 aspire to live in and can afford to buy houses between 250-600 square feet in the suburbs at current market prices. Recognizing the viable business opportunity that this segment represents, forward thinking developers like Matheran Realty, Tata Housing, and Jerry Rao, among others, are leading the development of the low income housing sector. The economic returns on affordable housing are very attractive, with project IRRs between 30-40%. Most importantly though, low income housing has the potential to create a new breed of home owners, and permanently improve their lives, as well as help in slum rehabilitation and urban renewal.