The government has decided to reallocate Nu. 1.5 billion from the Economic Stimulus Plan (ESP) that was initially intended for affordable housing, directing it instead towards urgent infrastructure needs, specifically the enhancement of chiwog roads. This decision, made by Lyonpo Chandra Bahadur Gurung, the Minister of Infrastructure and Transport, came after extensive consideration and was driven by principles of equity, impact, and fiscal prudence.
The funds originally allocated for the Ministry of Infrastructure and Transport aimed to promote affordable housing and homeownership; however, an assessment revealed that their potential impact on widespread housing needs would be limited. The high demand for housing and elevated construction costs, particularly in rural areas, indicated that the benefits would likely only reach a select group of individuals, raising concerns regarding inclusiveness and equitable distribution. Consequently, the government reassessed the allocation’s effectiveness in meeting broader socio-economic goals.
In contrast, enhancing chiwog roads was seen as a strategy capable of yielding immediate and extensive benefits. Improved road connectivity is expected to bolster rural livelihoods by facilitating better access to markets, healthcare, and education, thereby enhancing overall socio-economic development. Lyonpo expressed that improved infrastructure would create a supportive environment for future housing initiatives, ultimately reducing construction costs and increasing the feasibility of rural settlements, thus aiding long-term housing objectives.
This reallocation has been framed as a strategic move to optimize the public benefit derived from ESP funds in the short term, allowing for refinements to the homeownership program to ensure it is more inclusive, sustainable, and impactful. Additionally, the Department of Human Settlement is nearing completion of the National Housing Strategy (NHS), which will operationalize the National Housing Policy 2020. Lyonpo noted that this strategy aligns policy goals with financing mechanisms, delivery systems, and institutional arrangements, translating policy intent into eight coordinated strategic objectives—these include public rental housing, improved access to land, private rental market reforms, pathways to homeownership, and urban planning, all aimed at closing affordability gaps for low- and middle-income households while fostering a financially sustainable and socially inclusive housing system.
Preparatory work for pilot housing projects is underway, focusing initially on low- to middle-income households and civil servants, with implementation expected to commence soon after finalizing the strategy and securing necessary approvals. A phased rollout will allow scaling of interventions based on performance and available fiscal space. The Ministry’s approach combines demand-side and supply-side measures, with demand-side support like concessional financing and savings-based schemes, while supply-side efforts involve developing affordable housing through public agencies and encouraging private sector involvement.
This comprehensive initiative is necessitated by technical assistance from the Asian Development Bank (ADB), aimed at developing the National Housing Strategy, establishing a Housing Management Information System, and enhancing institutional capacity alongside key regulatory frameworks such as green building guidelines.
The National Housing Development Corporation Limited (NHDCL) is projected to develop 2,500 housing units in phases, starting with 1,000 units in the first phase, which is budgeted at USD 37 million, financed through an ADB loan and grant. Additional government support includes a loan from the National Pension and Provident Fund, supplemented by ADB’s technical assistance. Overall, these government initiatives reflect a holistic strategy to confront housing challenges while ensuring that public funds are deployed effectively for maximum societal benefit.
