May 5, 2026
PHUENTSHOLING – Despite successive governments promising solutions, the housing crisis in the country’s commercial hub is far from solved, pushing a growing number of Bhutanese to seek accommodation across the border in Jaigaon.
This long-entrenched problem reflects more than a temporary mismatch between supply and demand. It points to deeper structural constraints in the town’s housing market.
While low-income families make up the largest share of those relocating across the border, even civil servants with moderate incomes are increasingly choosing to live in Jaigaon. This suggests that the shortage extends beyond affordability to a broader lack of available housing.
Higher rent is not the only factor pushing families across the border. The unavailability of apartments, even for those who can afford them, is also driving them away.
Across the border, however, housing conditions are often substandard—congested, poorly maintained, and lacking reliable water and electricity. Yet for many, the lower cost outweighs these deficiencies.
Although precise figures are unavailable, the daily cross-border movement of workers and schoolchildren indicates that a significant population now resides outside Bhutan.
During the recent election in West Bengal when the international border was closed, many families were forced to arrange temporary accommodation with relatives and friends in Phuentsholing.
Changing housing landscape
Phuentsholing, long regarded as the country’s commercial hub, continues to have a housing landscape shaped largely by its business-driven character, which has resulted in more buildings being developed for commercial purposes rather than residential use.
However, residential construction has picked up pace in recent years, which reflects growing demand for housing in the town.
In the past two years, the thromde approved about 55 residential building permits, including around 24 in 2024 and about 30 in 2025.
Similarly, in the first four months of 2026, around nine building drawings for larger constructions were permitted, which indicates a steady rise in housing-related activity.
Alongside private construction, government-linked housing projects are also expanding supply.
The National Housing Development Corporation Limited, with support from the Asian Development Bank, is constructing 130 housing units at Amochu, which are expected to be completed within a year.
In addition, 96 units are under construction in the core town area, which are targeted for completion by December.Another 166 units are also under construction in the core town area.
The corporation currently manages a total of 689 housing units across locations including Pekarzhing, Amochu, and the core town, which are occupied largely by private sector employees, followed by civil servants and corporate workers.
As per the current tenant records, most units are occupied by the private sector with 376 units (55 percent), followed by civil servants with 258 units (37 percent) and corporate employees with 55 units (8 percent).
The National Pension and Provident Fund further adds about 345 units, which are reserved for its members.
While construction activity is increasing, the supply remains structured across multiple agencies and tied to eligibility criteria, which continues to shape access to housing in the town.
Structural causes and push factors
One of the root causes of limited housing, according to locals, is Phuentsholing’s history of landslides, land subsidence, and flood risks, which restricts large-scale investment and expansion.
As a result, residential construction in hilly areas and near the river has remained limited, although new buildings are coming up as settlement pressure increases.
Construction owners say that despite the town’s proximity to the border, which reduces the transportation cost of materials, other factors continue to drive up prices.
They cite costly building design requirements and regulatory standards, which add to construction expenses.
They also cite high loan repayments, which directly influence rental pricing. “When monthly loan repayments are high, constructing commercial units becomes more viable than residential housing,” said a building owner.
“Even when we construct residential units, we prefer larger apartments with better returns, as smaller units are not viable with high loan obligations.”
This has led to fewer affordable housing options, such as single-room units. A two-bedroom apartment costs between Nu 12,000 and Nu 12,500, while three-bedroom units go beyond Nu 14,000.
Smaller units, which are already limited, start at around Nu 9,000, which remains out of reach for low-income earners.
In comparison, rental prices in Jaigaon remain much lower, which makes it a more viable option.
A one-bedroom apartment costs about Nu 4,000, while a two-bedroom unit near the border costs around Nu 8,000.
The cost difference extends to daily expenses as well, which further reduces the financial burden for families.
Policy dilemma and future risks
Going by the current trend, solving the housing issue remains complex, which requires a careful and balanced policy approach.
One option suggested by local leaders is to expand support to the National Housing Development Corporation Limited, which can provide relatively cheaper housing by using leased state land.
“Since the corporation builds on leased state land rather than purchased land, it can offer relatively cheaper housing,” a local leader said.
However, this approach also raises concerns. Some say that expanding cheaper housing at a large scale could encourage rural to urban migration, which may create additional pressure on urban services and infrastructure.
Further challenges lie in land availability, which is limited by environmental risks and industrial exposure in areas such as Pasakha.
In addition, extending housing to a wider population, particularly those with unstable income, presents challenges in income verification and rent collection, which could affect the financial sustainability of housing agencies.