The rapidly expanding population on Guwahati hills has given rise to twin problems—irreversible ecological destruction and aggravation of artificial floods. Affordable housing remains the pragmatic option to check unauthorized settlement on hills and provide sustainable solutions to the twin problems. The increase in the number of people looking for low-cost housing solutions on the city hills is attributed to rapid expansion of the service sector, real estate growth, and infrastructure development. Youth finding employment opportunities in the service sectors are faced with the harsh realities of high rentals in the city’s plains, where multi-storeyed apartments have fast replaced old Assam-type houses with the rapid growth of the real estate sectors. A large section of them at the entry level are unable to afford the high rents of accommodation in these apartments due to low salaries and are compelled to move towards the hills, where houses are available for lower rent. The demand for low-cost housing in the city has also increased due to an increase in construction activities for the development of the city’s infrastructure, like flyovers, in the real estate sector, and such sets of migrant workers, mostly migrant Muslim workers from lower Assam districts, either look for very low-cost rental houses or occupy hill areas to illegally construct low-cost houses made of bamboo and tin roofs. The state government prioritizing Pradhan Mantri Awas Yojana-Urban (PMAY-U) for increasing construction of affordable houses in the capital city has become an urgent necessity to prevent further destruction of the city’s hills. Central assistance is released to the states in three installments of 40%, 40%, and 20% for the construction of houses. Release of state share is mandatory to enhance the affordability of the houses. The scheme guidelines allow the states to provide an additional top-up share to increase affordability. The state government leveraging this option and facilitating faster construction of more affordable houses can cater to a significant section of migrant employees and workers so that population pressure on the hills can be reduced in an accelerated manner. As informed to the parliament, the central government budget allocation for a financial year is kept considering the anticipated requirement under the scheme during the year and utilized according to the claims received from states and Union Territories. Based on the claims received and curtailment/cancellation proposals submitted by states/UTs, the budgetary estimates are decided. Restructuring of the Credit Risk Guarantee Fund Trust for Low-Income Housing (CRGFTLIH) for Economically Weaker Section (EWS) /Low Income Group (LIG) was aimed at enhancing the credit accessibility and worthiness of eligible households by expediting the guarantee on the housing loan taken from scheduled commercial banks or housing finance corporations. The scheme also aims to help eligible beneficiaries of PMAY-U 2.0 belonging to EWS/LIG through affordable home loans from financial institutions to complete their homes on time. Besides, the central government also expects the states/UTs to facilitate home loans to PMAY-U 2.0 beneficiaries through a tripartite agreement. However, thermal comfort often plays a crucial role in influencing housing design, which ultimately reflects on higher rental costs depending on additional investments made to increase the comfort level. With the rise in temperature due to climate change impact, homeowners seek to maximize the comfort level of their own living space as well as for rental houses owned by them so that they get higher rent to repay the loans and to cater to the requirements of rental accommodation-seeking families or individuals belonging to the middle and high-income groups. The central government hopes that the establishment of the Technology & Innovation Sub-Mission under PMAY-U 2.0 can provide sustainable solutions for eco-friendly housing solutions at affordable costs. The government told the parliament that the sub-mission promotes the adoption of layout designs and building plans suitable for various geo-climatic zones through coordination with various regulatory and administrative bodies for mainstreaming and upscaling the deployment of modern construction technologies and materials in place of conventional construction materials and practices. Projects under the scheme promotes use of resource efficient, climate responsive, disaster resilient, eco-friendly and sustainable building materials, technologies and processes and also adopts greenbuilding norms in line with prevailing standards and specifications includingsustainable construction practices to provide thermal comfort, reduce energy use and environmental impact, according to information provided to the Lok Sabha by the Ministry of Housing and Urban Affairs. The PMAY is a demand-driven scheme due to which the central government does not fix the targets for the construction of affordable houses in urban areas, and the onus lies on the states/UTs to make the assessments of the housing needs and place their demand accordingly. The Guwahati Municipal Corporation can undertake a comprehensive assessment of the actual demand for low-cost housing among hill dwellers. The sustainable strategy for conservation of the hills and reducing the intensity of flash floods in Guwahati is to focus on realistic housing demand estimation instead of fixing arbitrary targets.