Delhi Affordable Housing Policy 2026: New Rules Below ₹1 Crore

Delhi's planning authority has quietly reshaped the residential market with a deceptively simple requirement: developers seeking additional floor area ratios (FAR) on new projects must now allocate 25 per cent of units as affordable housing, priced at or below ₹4,500 per square foot in South Delhi and ₹3,500 in outer zones. The policy, operationalised across three phases beginning January 2026, is already forcing a recalibration of developer strategy and buyer behaviour.

The impact is most visible in the ₹60–100 lakh segment, historically the preserve of first-time buyers around Dwarka, Rohini, and parts of Gurgaon's Sector 65. Builders who previously marketed projects as premium micro-markets are now offering internal cross-subsidy models—bundling affordable units with mid-market offerings on the same site. Data from property consultancies tracking Greater Delhi shows a 12–15 per cent compression in average sale prices for non-affordable inventory on projects where the mandate applies, as developers absorb costs and maintain overall project viability.

South Delhi's established pockets—Vasant Kunj, Defence Colony, and Greater Kailash—have largely escaped disruption; these areas command ₹12,000–18,000 per square foot precisely because they pre-date the new rules or fall under heritage protections. The real pressure sits in the middle belt. Neighbourhoods like Mehrauli, Chhatarpur, and the metro-adjacent stretches of South Delhi Extension are seeing developer interest pivot toward land parcels where FAR flexibility makes the affordable mandate economically workable.

Gurgaon and Noida, where NCR growth has traditionally concentrated speculative investment, are now competing for the same projects. Several tier-1 developers have accelerated land acquisition in Noida Sector 62 and Gurgaon's Sector 89 specifically because local regulations offer less restrictive affordable housing requirements, allowing cleaner project economics.

The policy's second-order effect is on rental markets. With ownership-based affordable housing units now permanent features in new developments, demand for rental housing among the ₹40,000–60,000 monthly income bracket has shifted expectations. Landlords in Dwarka and Rohini are reporting slower absorption for older rental stock as new-build affordable units—with better construction quality and amenities—enter the market.

Planning officials note this was intentional: the mandate aims to address Delhi's chronic shortage of housing below ₹50 lakh while maintaining developer returns through density bonuses. Whether the policy achieves equitable distribution or simply relocates premium projects to compliant zones remains to be seen. What is certain: the mid-market builder's playbook has changed, and the market is still pricing in the new rules.

This article was compiled by AI and screened before publishing. See our editorial standards.