The population explosion has resulted in an ever increasing demand for accommodation in the urban areas, rendering the housing problem grimmer. Himachal Pradesh Urban Development Authority (HIMUDA) has been entrusted the vital task to develop housing colonies at various places in the state. The Authority is constructing houses under different housing schemes like Social Housing Schemes, Self Financing Schemes and Rental Housing Schemes for H.P. Govt. employees, Police Personnel etc. 
The Board has developed an industrial township at Parwanoo, which is the Gateway to Himachal Pradesh.  Undoubtedly, Parwanoo is the only industrial township in the State, where HIMUDA has created the compact infrastructure required for an industrial township i.e. planned industrial plots, residential and commercial complexes.  HIMUDA can also take credit for planning and construction of some of the prestigious projects like designing and construction of H.P.   Institute of Public Administration complexes at Fairlawns near Shimla, Hotel Holiday Home at Shimla, other hotels of Tourism department at Parwanoo, Mandi and Paonta Sahib.  Commercial complexes at Mandi and Hamirpur. District Institutes of Education and Training (DIET) Buildings and Hostel at Shimla, Chamba, Mandi, Nahan, Solan, Kullu & Una.
HIMUDA has acquired 108 bighas at Moginand in Kala Amb in Sirmour. The Authority here plans to develop 64 Cat-I, 16 Cat. II, 36 Cat. IIIand 76 Cat.-IV plots. Development works has already been started with a total project cost of Rs 505.17 lakh. The Authority has also acquired land measuring 887 bighas at Mandhala in Baddi area of Solan district. This 9033.92 lakh  project has been finalized comprising of 704 plots of different categories. There is proposal to construct 10 Cat-I, 10 Cat-II, 48 Cat-III and 96 EWS flats. In this township there is further scope to develop about 1500 more flats in the coming years. Work has already been started for development of infrastructure so as to ensure early completion of this project.
HIMUDA has also approved a Rs. 14.01 crore housing scheme for the urban poor. Under this scheme, named Ashiana-II, 384 dwellings units would be constructed for the urban poor in Shimla town. Similar project has been approved for Hamirpur town. As many as 152 dwelling units would be constructed under this project with a total cost of Rs. 4.43 crore. Housing colonies would also be constructed at Dharamsala and Solan towns for the urban poor. In Solan town, 336 dwelling units would be constructed at a cost of Rs. 9.58 crore and 328 dwelling units would be constructed at Dharamsala town be spending an amount of Rs 9.42 crore.
In an attempt to disperse urban populace for already congested towns and to provide them better civic amenities, nearer to major towns, HIMUDA has also initiated process to setup two satellite townships at Dharamsala and Mandi. For this government land measuring 439-10 bighas and 828-04 bigha private land has been identified near airport at Dharamsala. Similarly, government land measuring 602-07-14 bigha and 1722-09-05 bigha private land has been identified at village Nasloh near Mandi for setting up of satellite townships.
There is also a proposal to set up new housing colonies at Theog and Pateog in Shimla district, Bhatolikhurd and Sansiwala in Solan district, Una and Rakkar in Una district, Dhaundi in Mandi district, Katyar, Palampur in Kangra district, Tikkaloharda in Hamirpur district and Bhatyat in Bilaspur district.
HIMUDA has acquired 670 bigha of land at Kullu Jhnnda near Baddi for setting up of education Hub. Planning for theis Rs 28.26 crore project has already been finalized and ten plots allotted to different educational institutions.