Introduction Many countries in Asia and the Pacific face a substantial shortfall in urban housing due to rapid and extensive urbanization. With the increase in climate change-related disasters, integrating green and resilience concepts into housing initiatives has become necessary. In Bhutan, achieving affordable, green, and resilient housing for all requires targeted interventions across various stages of housing projects. This starts with building government’s institutional readiness, better integration of affordable housing programs into urban planning, effective enforcement of policies and strategies, and determination of housing needs through comprehensive analysis of population changes and urban trends. Suitable financing mechanisms are also needed to offset high investment costs and facilitate affordability. Lastly, design solutions should use green and sustainable materials and processes. Under the Bhutan Green and Resilient Affordable Housing Sector Project, implemented by the National Housing Development Corporation Limited, approximately 700 housing units are being constructed with funding from the Asian Development Bank (ADB). The initial phase includes planning, design, and construction. The project aims to implement the National Housing Policy’s principles, which includes strengthening resilience, improving construction cost efficiencies, transparent targeting of rental housing, exploring homeownership options, and promoting private sector participation to boost the local economy. Responding to Bhutan’s Housing Dilemma Over the past two decades, Bhutan’s urban population has nearly doubled with 42% of the country’s total population now living in urban areas. The rapid urbanization, driven mainly by rural–urban migration, has put immense pressure on the housing sector. As of 2021, there was a nationwide shortfall of 21,156 housing units, with 14,298 needed in urban areas. Low- and middle-income households, women, and people with disabilities, who are primarily noncivil servants, are the most affected. About 64% of urban households rent, with low-income households spending more than 40% of their income on housing, well above the international benchmark of 30%. Rising land and housing prices, high construction costs, and inadequate financing mechanisms hinder homeownership. Further, the increasing frequency and severity of climate change impacts in the country necessitate integrating green and resilience concepts into affordable housing program. The National Housing Development Corporation Limited has historically focused on providing subsidized housing for civil servants. In 2023, it expanded its scope to promote affordable, green, and resilient housing solutions through various tenure options. This shift aligns with the government's goal of ensuring affordable housing for all. The Bhutan government sought support from the Cities Development Initiative for Asia (CDIA), an ADB-managed trust fund, for a project preparation study to assist the National Housing Development Corporation Limited and city-level departments in Thimphu, Phuentsholing, Samtse, and Mongar in building their capacity and preparing the next phase of the Green and Resilient Affordable Housing Sector Project implementation. Conducted from September 2022 to June 2023, the advisory support had the following objectives: Review and assess the regulatory framework, institutional capacities, and financial aspects of the National Housing Development Corporation Limited and city-level agencies to develop a comprehensive capacity development roadmap. Prepare green and resilient affordable housing models in the identified cities as precursors of future housing projects. Conduct capacity-building activities to support future National Housing Development Corporation Limited projects. Key Components of Bhutan’s Affordable Housing Program With ADB-CDIA support, the National Housing Development Corporation Limited identified essential components and targeted interventions to enhance its affordable housing program while incorporating green and resilient solutions. These include the following: Institutional and capacity development roadmap An institutional and capacity development roadmap was crafted based on the training needs assessment with relevant stakeholders. It identified short-, medium-, and long-term activities for strengthening capacities within National Housing Development Corporation Limited and city-level agencies in implementing Bhutan’s affordable housing program. Activities ranged from policy analysis and identifying green and resilient housing practices to training activities for improving synergy between local and central governments and reinforcing the country’s housing-related regulations. The roadmap enhances knowledge about extreme weather events and hazard risk assessments, integrating them into urban planning documents (e.g., structural plans, local area plans), prioritizing housing locations connected to existing public services, and exploring densification opportunities to decrease carbon emissions and prevent urban sprawl. It also encouraged using local materials, such as compressed stabilized earth blocks and wood, due to their lower environmental impact compared to traditional materials, such as concrete and cement. Climate and disaster resilient planning and design Integrating green and resilience perspectives into the National Housing Development Corporation Limited’s operations requires interventions across various stages of housing projects—from site selection to design and implementation. This involves assessing climate impacts during site selection, integrating resilience objectives in planning regulations, and using nature-based solutions and local construction materials. Housing initiatives must be supported by energy-efficient features and processes, managing their impact on affordability. Affordable housing needs and demand analysis A comprehensive analysis of population changes and urban trends is crucial in determining housing needs, facilitating efficient resource allocation and tailoring housing solutions. Analysis projected that Bhutan requires 2,250 affordable housing units annually from 2022–2027, with specific needs identified for each city: 400 units in Thimphu, 100 in Phuentsholing, 10 in Samtse, and 20 in Mongar. The demand analysis incorporated socioeconomic surveys and focus group discussions to refine affordable housing models based on tenure options, such as renting, social accession, rent-to-own, and shared ownership. Financial mechanisms and public–private partnerships Bhutan's high interest rates adversely affect the cost of green and resilient affordable housing. To remedy this, the government must leverage domestic and international green finance to reduce costs. International climate finance, such as the Green Climate Fund (GCF), can offer significant cost savings. Applying for GCF funding is particularly attractive if projects promote sustainable forest management and enhanced carbon sequestration. Bhutan has limited experience with public–private partnerships in affordable housing. However, such partnerships can support affordable housing through private sector land provision, concessional terms, and direct construction. Building government capacity in public–private partnerships requires establishing a comprehensive framework and implementing specific affordable housing programs. Land-focused public–private partnerships were recommended as a starting point due to their relative modest complexity. Revised allotment rules The National Housing Development Corporation revised its rental allotment rules and regulations to include noncivil servants, establishing a 50/50 allotment ratio between civil servants and noncivil servants. The selection of recipients is now based on gross monthly household income rather than individual income. It also diversified rental rates to better match applicants’ incomes, with future steps including tying the floor area of housing units to household size and prioritizing certain population groups, such as single head households. The revised allotment rules are expected to incorporate clear specifications for various tenure options. Affordable housing models for targeted cities The National Housing Development Corporation Limited and city-level agencies have tailored affordable housing models for Thimphu, Phuentsholing, Samtse, and Mongar, taking into account their specific geospatial conditions, economic environment, regulatory framework, and land availability. The models explore various scenarios that combine conventional reinforced cement concrete buildings, timber construction, and diverse financial arrangements to achieve affordability. The preferred scenario, which integrates improved financial conditions and timber construction, meets the affordability objectives for low and very low-income households in Thimphu, Phuentsholing, and Samtse. However, Mongar will need subsidies. Given that forest coverage exceeds 73% of the country’s area, scaling up timber construction will require sustainable logging practices and regulations. Recommendations for Future Support The housing needs analysis has highlighted Paro, Punakha, and Gelephu as cities likely to experience significant demand for affordable housing in the near future. To effectively fulfill its mandate, the National Housing Development Corporation Limited should maintain its role as Bhutan’s sole provider of affordable housing and strengthen its capabilities in fostering public–private partnerships. Emphasizing integrated city planning over standalone housing projects can effectively promote urban development and reduce commuting. Land availability remains a critical issue for the corporation. Proposed strategies to address this issue include densifying existing land plots, leveraging undeveloped private lands through public–private partnerships, and forging partnerships with other state landowners. Improving financial prospects requires tapping into funding agencies that promote green, resilient, and affordable housing using innovative financing mechanisms. Advancing sustainable housing design is essential. Growing the timber economy, promoting bio-based products, and integrating nature-based solutions into urban planning are critical in supporting green and resilient building practices. This comprehensive approach ensures that Bhutan can meet its affordable housing goals while advancing environmental sustainability and resilience, laying a solid foundation for future urban development initiatives. Resources Asian Development Bank. Bhutan: Green and Resilient Affordable Housing Sector Project. Asian Development Bank. May 2023. South Asia Innovation Project Brief: Green and Resilient Affordable Housing Sector Project. Cities Development Initiative for Asia. Bhutan Green and Resilient Affordable Housing Advisory Project. Cities Development Initiative for Asia. February 2023. Laying the Foundation for Green and Resilient Affordable Housing in Bhutan. Ask the Experts Hong Soo Lee Senior Urban Development Specialist (Smart Cities), Water and Urban Development Sector Office, Sectors Group, Asian Development Bank Hong Soo Lee is a smart city expert with urban policy, planning, and development background. He brings his experience to support bank-wide initiatives and projects in urban development. Before joining ADB, he worked at the Seoul Housing Corporation, Republic of Korea Ministry of Land, Infrastructure and Transport, and Singapore Urban Redevelopment Authority. Kathleen Jovellanos Monitoring, Evaluation, and Knowledge Management Specialist, Cities Development Initiative for Asia Kathleen Jovellanos oversees the Cities Development Initiative for Asia’s capacity development strategy and ensures the achievement of its 2023–2027 strategy objectives through monitoring and evaluation. Her diverse project experience has honed her expertise in capacity development, knowledge management, public–private partnership, logical framework, and policy evaluation. She holds a master's degree in development management. Follow Kathleen Jovellanos on Marc Popesco Team Leader, Cities Development Initiative for Asia (CDIA) Marc Popesco is a civil engineer and architect with 40 years of experience in urban development. He served as team leader of the Asian Development Bank–CDIA Green and Resilient Affordable Housing Advisory Project. Educated in Zurich and Paris, he has led projects and planning initiatives across Africa and Asia, gaining extensive knowledge of housing affordability issues. Cities Development Initiative for Asia (CDIA) Cities Development Initiative for Asia (CDIA) is a multi-donor trust fund managed by the Asian Development Bank. As a project preparation facility, it helps secondary cities in Asia and the Pacific prepare bankable and sustainable infrastructure investments. It receives funding support from the governments of Austria, Germany, the Republic of Korea, Spain, and Switzerland. Asian Development Bank (ADB) The Asian Development Bank is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region. Its main instruments for helping its developing member countries are policy dialogue, loans, equity investments, guarantees, grants, and technical assistance. Follow Asian Development Bank (ADB) on Leave your question or comment in the section below: View the discussion thread.