This paper is part of a series of fourUrban Policy Notes that provide a critical review onemergent challenges to Bhutan’s increasing urbanization andits ramifications for growth, livability and sustainabilityin line with the directives of the 12th Five-Year Plan (FYP)and the Vision 2020. The four notes are: (a) RegionalDevelopment, (b) Municipal Governance and Finance, (c)Affordable Housing and (d) Urban Resilience. These notesbuild on the long engagement between the Royal Government ofBhutan (RGoB) and the World Bank on urban issues as well asthe experiences of urban operations under Bhutan UrbanDevelopment Projects I (1999-2006) and II (2010-2019) andare intended to support the RGoB on key and emerging urbantopics and guide Bank’s future analytical and investmentsupport in the urban sector.