#18 cities
Carlin Carr

Meeting the World’s Housing Needs

By 2050, 70% of people will live in cities. A prospect calling for building 100,000 housing units per day until 2030.

The world is in the midst of one of the most significant shifts in where and how we live – one that is both unstoppable and irreversible. In 2008 for the first time in history, the fulcrum that is the world’s population tipped toward a majority urban one, bringing explosive growth to cities across the globe in just a few decades. The significant allure of urban centres – economically, culturally and socially – is undeniable, but the reality on the ground is that cities rich and poor have failed to respond to the needs of this new workforce and population. And nowhere is this more apparent than in the dire lack of decent and affordable housing.

Nearly one billion urban dwellers worldwide live in slums or substandard housing.

Nearly one billion urban dwellers worldwide live in slums or substandard housing. These shantytowns, primarily housing the world’s poorest, are often built by residents themselves in a desperate attempt to gain access to their fundamental need for shelter, even in its most basic form. Land is often scarce, so the communities are densely packed and precariously stacked. Some slum areas, such as Mumbai’s Dharavi, have some of the highest density rates in the world.

…, but that will entail the monumental task of building nearly 9,000 houses per day for the next six years.

India has a deficit of 25 million houses in its urban areas. In Mumbai, more than 60% of the population lives in slums. These densely packed communities are often considered illegal and live without the most basic service provisions to their homes, including electricity, safe drinking water and sanitation. The lack of decent housing, therefore, spawns public health concerns, especially for children. The government has set out to tackle the country’s housing needs by 2022 with its “Housing for All” program, but that will entail the monumental task of building nearly 9,000 houses per day for the next six years.

Kenya has experienced similarly rapid urbanisation and, alongside this, a jump in the middle class, which now encompasses nearly 45% of the population as stated by the African Development Bank Group (ABD). While there is a continually growing need for affordable housing for this new population in Kenya’s cities, supply has fallen grossly short. “The Kenyan market – as with many other countries in Africa – is characterised by a large demand and a chronic undersupply of formal housing,” states a report by the ADB. Nairobi is home to the largest slum in all of Africa.

While the situation in developing cities is extreme, the housing gap is being felt all over the world. “Housing affordability is becoming one of the most important problems worldwide, both in the developed and the developing world,” said Joan Clos, UN Under-Secretary-General and Executive Director of UN-Habitat. “We will need to sharpen our tools to address this.”

The U.S. has at least 700,000 people sleeping in public spaces or in emergency shelters on any given night.

In developed nations, skyrocketing housing costs have outpaced spending abilities for individuals and families, and the result has left millions in more than a housing crunch and forced many to live on the streets. In the European Union countries, an estimated 2.5 million people are homeless over the course of the year. The U.S. has at least 700,000 people sleeping in public spaces or in emergency shelters on any given night. That number rises as high as two million at some points during the year.

What is more worrisome is that the housing shortage is only projected to grow. Today, 54% of people worldwide live in urban areas. By 2050, an additional 2.5 billion people are expected to swell the urban population to encompass 70% of humanity. At the current pace and with the local-level responses thus far, the situation of inadequate housing and slums could get much worse.

Housing as a basic development need

…ensuring “adequate, safe and affordable” housing.

Housing is one of the fundamental human rights outlined in the United Nations Declaration of Human Rights. It’s also a key part of the ambitious goals the UN set out last September when it inaugurated the new development agenda for the next 15 years with the 17-part framework that is the Sustainable Development Goals (SDGs). The SDGs outline a course for solving many of the world’s most vexing problems, including eliminating homelessness and ensuring “adequate, safe and affordable” housing. This goal is the first target listed under SDG No. 11 — to “make cities inclusive, safe, resilient and sustainable.”

The goal to provide safe and affordable housing is one of the most essential and basic needs – and a foundational building block for achieving all other development goals. The security of a stable home allows families to invest in other areas, including in children’s education. With these investments, employment levels improve and, thereby, poverty levels drop. Proper shelter with appropriate services also reduces health risks, and families have to invest less money in emergency health services – extra cash they can use in more productive ways.

…80% of the world still lives off of less than $10 a day.

But providing adequate housing is not a standalone issue and it is not just about building homes. The homeless and slum situation is caused by poverty and unemployment. A huge percentage of the population around the world is working in the informal economy, which is characterized by low wages and irregular income. Upgrading the skills and income potential for informal workers goes hand in hand with a sustainable housing plan. Even if countries begin massive construction undertakings, new occupants will need the financial means to reside there long term. That is a challenge when according to a World Bank report 80% of the world still lives off of less than $10 a day.

Four target areas

…meeting housing needs by 2025 is possible (…)

The housing crisis around the world is overwhelming, but not impossible to tackle. A McKinsey report says that meeting housing needs by 2025 is possible if four key areas can be tackled:

Improving access to land: The report says that land costs are often the “single biggest factor in improving the economics of affordable housing development.” It says that land costs often exceed 40% of the total property prices and can even skyrocket to 80% in particularly land-starved cities.

Streamlining the cost of development and construction: By UN estimates, 100,000 housing units will need to be constructed every day until 2030 to meet the need. Efficient and scalable construction techniques, even using high-speed assemblies, will lower costs and hasten delivery times.

Increasing the efficiency of existing and newly built housing: Operations and maintenance costs account for 20% - 30% of affordable housing costs, so improving efficiency in this area can assist delivery at lower costs. “Buildings can be designed (or retrofitted) to run more efficiently – requiring less energy, for example – and maintenance can be delivered at far lower costs by bringing scale benefits and clarity to what has been a highly fragmented and opaque market”, says the McKinsey report.

Improving financing: Financing is an essential tool for reaching the greatest number of people – and at all income levels. Ironically, financing is least available in places where people need it most, which is why informal housing proliferates outside the formal system. Better access to various financing options – for both purchasers and developers – is an underlying necessity in providing affordable housing.

Moving forward

…prepare for a future of cities.

In October, at Habitat III – the United Nations’ Conference on Housing and Sustainable Urban Development – the housing issue will become part of a centre stage global debate on the future of cities. The UN says this is an opportunity to rethink the “New Urban Agenda” and prepare for a future of cities. While broad ideas have been outlined about developing sustainable cities, there is no one-size-fits-all solution. The agenda agreed upon later this year will be important and offer overarching ideals for transforming the urban model, but cities will need to respond to local needs with locally appropriate answers – ones that see cities as more than economic engines and also as humanely habitable places for all urban residents across the globe.

Photo: Nigel Pavitt (Getty Images)

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