Skip to 0 minutes and 13 seconds As cities keep growing and the number of migrants coming into them increases, the problem of providing affordable and adequate housing is a pressing one. The United Nations estimate that in the next 10 years an extra 1 billion houses will be needed to house all the new urban residents by 2025. However this problem is only part of what we call the global housing crisis. So what exactly is this crisis? Simply put, affordable housing is inadequate and adequate housing tends to be unaffordable (UN Habitat - Issue paper 20) . Today, around one quarter of the world’s population lives in informal settlements, often characterised by precarious, if not hazardous, living conditions.
Skip to 0 minutes and 57 seconds These often exclude access to adequate sanitation (like safe drinking water), other facilities and infrastructure, as well as legal protection against eviction. Furthermore, a critical issue in housing provision is its accessibility, otherwise termed affordability. The definition of affordable housing will of course vary by location, but it is generally defined as housing that costs no more than 30 percent of income. It is estimated that currently 330 million households are financially stretched by their housing costs.
Skip to 1 minute and 34 seconds McKinsey and company in a recent report suggest that: “By 2025, the number of urban households that live in substandard housing - or are so financially stretched by housing costs that they forego other essentials, such as healthcare - could grow to 440 million, from 330 million. This could mean that the global affordable housing gap would affect one in three urban dwellers, about 1.6 billion people”. So why do we have this crisis? Like many urban challenges, the answer is complex. The difficulty we have in housing growing proportions of urban residents is down to three main issues - political and economic processes, poor planning and inadequate policy making at a range of scales.
Skip to 2 minutes and 24 seconds So let’s take a look at each of these issues, beginning with political-economic processes. Over the last thirty years, particularly in Europe, North America and Australia, how we think about housing has fundamentally altered. Changing local government ideologies and practices - a result of what we can term neoliberalisation have increasingly meant a decline in the amount of public provision in cities and an increased reliance and dependency on the private sector to deliver housing. This has meant that housing has become primarily market-based and market-driven rather than a form of social welfare or protection. In recent years this approach has spread to other parts of the world, including China and parts of south Asia. But you might ask, why does this matter?
Skip to 3 minutes and 16 seconds For the private sector, housing is a commodity, a means of deriving profit. Therefore those with the greatest ability to pay will be favoured, while those who cannot afford to pay for private housing are increasingly disadvantaged. Private entrepreneurs and financial institutions rarely invest in the poorest and most vulnerable communities, and their efforts usually target a high-end market of higher-income groups. On a global level, the World Bank - the main international actor in supporting the improvement of housing conditions - has shifted from a marked poverty-alleviation orientation to a stronger engagement with the private sector in housing provision. Home ownership has become the primary way to formally access housing, neglecting other forms of tenure arrangements and indirectly penalising the most vulnerable urban dwellers.
Skip to 4 minutes and 11 seconds Rental housing generally, and low-rent housing in particular, has been marginalised within cities across the world leading to a crisis of both affordability but also adequacy as some people are forced into homelessness or informal housing. The second part of the explanation is linked to poor planning which has hindered local government action and the achievement of an effective housing policy. One of the biggest constraints is land supply within cities. Some research would suggest that by unlocking under-utilised or unused land in city centres that we could reduce the costs of housing by 18% to 23%. This would go a long way towards closing the affordability gap.
Skip to 4 minutes and 56 seconds Some other scholars argue that the global housing crisis is caused by or at least remains unresolved because of inadequate policymaking. Weak regulations have resulted in land speculation, urban sprawl and the spatial segregation of housing. Even where there are formal regulations in place, they often disadvantage the populations of greatest need. Housing construction costs are often inappropriately monitored and regulated. McKinsey and Company suggest that adequate housing could be delivered more quickly and cheaply if policymakers adopted new approaches that require standardised design, for example, and made the planning, financing and construction of housing more streamlined.
Skip to 5 minutes and 41 seconds As we will see in a later learning step, there are a range of policy solutions being tested in different parts of the world, but these often have mixed impact. Given the complex nature of the global housing crisis, there will be no quick fix solution. The UN suggest that the development of sustainable housing will be crucial to the development of more sustainable cities. But solving the housing crisis is not just about providing shelter, instead we must address bigger questions asking not just how we can upgrade slums but why do slums develop? Why there are such stark socio-economic divides within our cities, and how can we make our cities more equitable?
Skip to 6 minutes and 24 seconds In the absence of answers to these questions urban dwellers will continue to informally innovate and create their own solutions to the housing crisis but in many ways this only perpetuates the development of inadequate housing. So if you were a policymaker, what would do in your city to address the housing crisis?
The global housing crisis
This week our focus is on housing, but why do we talk about a global housing crisis? What is the nature of the crisis and what are the drivers of it? Explore more by watching the video that forms this learning step.
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