Since the mid-seventies house construction activity in Kerala has taken a sudden upturn. The present paper analyses the impact of this boom on factor and material markets, employment, skill-mix and technology. The author argues that the boom failed to provide any growth stimulus to the state's economy and to satisfy the shelter needs of the poorer sections due to lack of effective public policy to monitor capital flows into housing and related activities. The paper advocates the formulation of a housing policy along with clear-cut programmes for their implementation which are integrated with the general planning process.