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Under the policy, Entry Level Exception Sites will allow affordable homes for first time buyers and renters on land next to existing settlements.
The Country Lsand and Business Association says the proposed policy could help the countryside to thrive.
Providing more flexibility and support for cross subsidy than existing policies will encourage more landowners to make appropriate land available for affordable housing, it says.
A briefing published by the organisation on Thursday (26 April) explains how the policy could help maximise the delivery of affordable housing in rural areas.
Entry Level Exception Sites are just one area of the revised draft National Planning Policy Framework (NNPF) up for consultation at the moment.
The CLA believes these sites could present greater opportunities for landowners to build affordable homes.
Discounted market sale homes could be built and sold without the need for a housing association, which is often not interested in small isolated rural locations, it added.
CLA president Tim Breitmeyer said: “Tackling the rural housing crisis is one of the defining challenges of our time.
"|The rural economy will struggle to achieve its full potential and our villages will not survive if people cannot afford to live and work in the countryside.
“If implemented correctly by local authorities, Entry Level Exception Sites strike a good balance between providing affordable homes and an economic return that motivates landowners to pursue sites, whilst ensuring sensitive design to meet the needs of the local community.
“Current policy options such as Rural Exception Sites are effective but are used inconsistently across local authorities.
"They also only work by relying on sites from landowners who choose to donate or sell land at reduced value, so delivery is restricted.”
Called Affordable Homes in the Countryside – the Role of Entry Level Exception Sites, the CLA policy document can be read here.
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