MP Housing Policy 2026 Focuses on Affordable Rental Homes

Madhya Pradesh has released its draft Urban Affordable Housing and Habitat Policy 2026, focusing on affordable rental homes near workplaces such as hospitals, industrial clusters and IT parks.

Chief Minister Mohan Yadav released the 28-page draft for public consultation on October 28, 2026.

The policy aims to support urban workers who cannot afford to buy homes or prefer renting, while encouraging developers to create housing through incentives and public-private partnerships.

MP Housing Policy Targets Affordable Rental Housing

The proposed policy targets economically weaker section (EWS) households earning up to Rs 3 lakh annually and low-income group (LIG) households earning between Rs 3 lakh and Rs 6 lakh a year, or as defined by the government.

Intended tenants include urban migrants, industrial and construction workers, working women, street vendors and contractual employees.

The draft complements the Centre's Pradhan Mantri Awas Yojana-Urban 2.0 and introduces a dedicated affordable rental housing component. It aims to locate homes close to workplaces, reducing the distance between employment centres and residential accommodation.

Housing Demand Could Shape Madhya Pradesh's Real Estate Development

The draft estimates cumulative housing demand at 20.82 lakh dwelling units by 2036, including 17.17 lakh affordable units.

Between 2036 and 2047, it projects demand for another 18.46 lakh units, including 17.65 lakh affordable homes. However, the document does not specify how much of this projected demand relates specifically to rental housing.

These projections indicate the scale of affordable housing need identified by the state.

If the policy is implemented, it could encourage developers and public agencies to consider rental housing as a distinct segment of the residential real estate market rather than focusing only on homes for sale.

Walk-to-Work Housing Could Connect Homes with Employment

One of the draft's key proposals is the Walk to Work model for industrial workers. It proposes earmarking 10% to 15% of residential land for affordable housing in relevant developments.

These homes could initially be rented on a long-term basis and later transferred to occupants through a Rent-to-Own arrangement.

The policy also proposes identifying land near hospitals, educational campuses, industrial clusters and IT parks. Such locations could accommodate doctors, nurses, faculty members, researchers, factory workers and young professionals.

Additional commissioner Shishir Gemawat said some land parcels had already been identified, while other areas were being considered near workplaces expected to develop in the future.

The availability of suitable land and the final implementation rules will influence the scale of these projects.

Builder Incentives Could Encourage Rental Projects

The draft proposes several incentives for developers willing to create affordable rental housing.

These include access to government and industrial land, along with Technology Innovation Grants of Rs 3,000 per square metre from the Centre and Rs 2,000 per square metre from the state for eligible projects on underutilised public land through public-private partnerships.

Other proposals include rationalising property taxes and service charges in line with residential properties, stamp duty relief, floor area ratio of up to 3.0, ground coverage of up to 75%, limited commercial use and transferable development rights.

The draft does not specify which benefits would apply to each rental project, and the proposals remain subject to statutory approvals.

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BHUMI Portal Proposed for Housing Transparency

The proposed BHUMI portal would list certified EWS, LIG and rental housing units, including verified information about developers, approvals, RERA registration numbers, prices and available inventory.

A time-bound single-window clearance system, with deemed approvals where legally permissible, is also proposed.

The draft envisages referring disputes to a dedicated Real Estate Appellate Tribunal bench where legally permissible or to a State-Level Grievance Redressal Committee.

Its implementation schedule assigns the first six months to launching BHUMI and establishing clearance timelines, followed by proposed legal amendments and housing approvals.

Also Read: Ujjain Simhastha 2028: Infrastructure May Boost Real Estate

Key Takeaways

• Madhya Pradesh's draft policy focuses on affordable rentals near workplaces for EWS and LIG households.
• The Walk to Work proposal would earmark 10% to 15% of residential land for affordable housing in relevant industrial developments.
• Eligible rental projects could receive grants and other incentives, subject to final rules and statutory approvals.
• The proposed BHUMI portal aims to improve access to verified housing information and streamline clearances.

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