WEF Insight Report: Making Affordable Housing a Reality in Cities

The world must act now to address its affordable housing crisis. According to Making Affordable Housing a Reality in Cities, a new World Economic Forum report, about 90% of cities around the world do not provide affordable housing, housing that has adequate quality and location with a cost that does not prohibit its occupants from meeting other basic living costs or threatens their employment or basic human rights.

In Africa, more than half of the population live in substandard conditions, and in India and China, almost a quarter of the population live in informal settlements. Across the world, millennials spend more on housing than previous generations and have lower quality of life. By 2050, more than 30% of the urban population around the world, about 2.5 billion people, will live in substandard housing or be financially stretched by housing costs.

“A world in which only a few can afford housing is not sustainable,” said Alice Charles, Lead, Cities, Urban Development and Urban Services, World Economic Forum. “If cities are to find solutions, it requires a broader understanding of what constitutes affordability and the factors that affect it. This report explores both supply-side and demand-side dynamics affecting affordability and guides decision makers towards strategic interventions and long-term reforms that can reduce dependence on government support systems and incentivize more commercially viable affordable housing through policies and practices that address systemic gaps in the housing value chain.”

Key challenges to affordable housing include land acquisitions, zoning and regulations that affect land use, funding mechanisms, and design and construction costs. Examples of innovative approaches to support affordable housing include:

  • • The cities of Chengdu and Chongqing, China, are making land available through tradeable land quotas, allowing agricultural land to be converted to urban use.
  • • The Communities Plus Programme in Sydney, Australia, is partnering with the private sector to develop 23,000 new and replacement social housing units, linking housing assistance with participation in education, training and local employment opportunities.
  • • Hamburg, Germany, and Copenhagen, Denmark, are pooling publicly owned assets into an Urban Wealth Fund that works with the private sector on affordable housing development projects.
  • • Employers such as Facebook and Google in the US, IKEA in Reykjavik, Iceland, Lego in Billund, Denmark, Samsung in Seoul and Suwon, South Korea, and Alibaba in Hangzhou, China, are investing in housing developments for employees.
  • London, UK, is offering construction training to address the skills shortage in the industry.
  • Mexico is deploying bricklayer robots that increase construction productivity.
  • Austin, US, Beijing and Shanghai, China, and Eindhoven, Netherlands, are exploring 3D printing to build homes.
  • Denver, US, is mandating certain buildings to install green roofs or solar panels to save on energy costs for the occupants.
  • Dupnitsa, Bulgaria, and Poznan, Poland, are changing eligibility criteria for social housing projects to support more citizens.
  • Bristol, UK, is constructing homes with six different types of housing tenure including build-to-rent, shared ownership and rent-to-buy models.
  • MIT’s Media Lab has developed a 18.5-square-metre prototype apartment that uses transformable furniture that can be flipped, moved and stowed by hand gestures and voice commands, increasing the functionality to an apartment three times its size.

The report also outlines recommendations for city governments, the private sector and non-profits, including:

  • City governments must develop regulations that emphasize property rights, protect tenants, support mixed-income housing development, and enable innovative financing models.
  • The private sector should work with local communities to provide affordable housing for employees, support new financing mechanisms and help meet housing costs. Private developers must invest in sustainable, energy-efficient design and use new materials, equipment and technologies to increase productivity.
  • The non-profit sector should work with cities and private developers to offer alternative tenure models, provide policy development and technical support, and educate and advocate for citizens.

Ensuring affordable housing is critical to achieving United Nations Sustainable Development Goal 11, which aims to make cities inclusive, safe, resilient and sustainable. According to the 2016 New Urban Agenda, housing policies can affect health, employment, poverty, mobility and energy consumption.

The report was created in collaboration with PwC.

DOWNLOAD THE REPORT HERE

Details

Publication Type Report
Publisher World Economic Forum
Year 2019
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