The Tamil Nadu government has allocated Rs 8,852 crore to the Housing and Urban Development Department in the 2026–27 Budget, announcing a series of measures focused on affordable housing, redevelopment of ageing residential areas, digital planning approvals and long-term urban development.

A major highlight is the launch of the ‘My Home’ affordable housing scheme, under which housing projects will be developed through the Public-Private Partnership (PPP) model for middle-income families and economically weaker sections.

Under the scheme, the government aims to facilitate the construction of 1 lakh houses over seven years. Around Rs 15,000 crore of investment is expected to be mobilised through the PPP model. To make projects financially viable and encourage private-sector participation, the government has also earmarked Rs 3,500 crore as Viability Gap Funding (VGF).

The government said 24,131 affordable housing units are currently under construction across Tamil Nadu, while construction of another 14,194 units is expected to begin this year.

Redevelopment of Ageing Tenements

The government has also announced a major programme to redevelop dilapidated and ageing tenements. An allocation of Rs 1,253 crore has been made for the initiative, which aims to improve housing conditions and provide safer and better residential infrastructure.

AI-Based Digital Approval Platform

In another key move, Rs 40 crore has been allocated for SPEED (Single Platform for Efficient Expedited Development), an AI-powered integrated governance platform.

The platform is intended to make planning and development permissions faster, transparent and more automated by digitally integrating approval processes.

Chennai Metropolitan Area to Get Long-Term Master Plan

The government has also announced a comprehensive master plan for the expanded Chennai Metropolitan Area. The plan is expected to serve as a long-term roadmap for urban growth, infrastructure development and regional transformation.

The initiative comes as preparations progress for the Third Master Plan for 2027–2046, covering the core metropolitan area of around 1,189 sq km. The planning framework is expected to draw from global best practices and internationally recognised metropolitan planning models.

The combination of affordable housing investments, PPP-based development, redevelopment of ageing housing stock and technology-driven approvals is expected to play an important role in shaping Tamil Nadu's residential and urban development landscape over the coming years.