The unprecedented migration of population from rural areas to big urban cities has led to an increment of demand for proper and affordable housing. As a recent survey shows, 90% out of 200 cities around the globe were considered unaffordable since average house prices are established three times above the regional median income.
With thousands or even millions of people searching for an affordable place to live in each city, it is important to define this term since affordability can’t be associated solely with the ability to buy and rent a home. It goes beyond the expenses of purchasing and maintaining a house; it also takes into consideration the transport, infrastructure, services, the legal and regulatory environment and the state of the financial market. Even if a house is economical enough to be bought and maintained, if it is located far from work or school it cannot be considered affordable.
Several factors contribute to the lack of affordability and even though it varies from city-to-city it broadly includes housing costs rising faster than incomes, lack of supply to meet demand, scarcity of land, demographic changes such as the growth of the population, ageing, and shifts in household composition.
To better understand this situation, the World Economic Forum elaborated a report that recommends a systematical approach on how to address the affordable house crisis with the examples of cities that are now finding and implementing solutions.
New laws in China limit local governments to expropriate rural lands to construct new housing. In Chongqing and Chengdu, a solution is being set through “tradable quotas”. This implies that it is only permitted to build houses on the periphery of a city if in return an additional land for cultivation is opened beyond city boundaries.
By partnering with the private sector and non-governmental and community housing groups, the state government of New South Wales, Australia is developing/renovating 23,000 social housing units in areas that need renewal. Revenue is being re-invested in social housing, community facilities, and public space.
A new law was passed in LA to convert empty unused spaces into “permanent supportive housing” for homeless people. By merely adding small kitchens to motel rooms, repurposing vacant properties becomes much cheaper and quicker than constructing new housing.
Lack of construction skills can drive up labour costs and consequently, house construction costs. To solve this issue, London established the Mayor’s Construction Academy to accredit training providers, enhance coordination between training providers and construction employers, and upgrade training equipment and premises through funding. This will make the construction industry more attractive to young people by having useful and proper training and material.
By using gypsum waste from fertilizer plants to make low-cost prefabricated panels, the Indian Institute of Technology in Madras found the way to propose a new building system with Glass Fibre Reinforced Gypsum (GFRG) panels, using minimal concrete and steel, and no bricks. This material – that has been designated as a green material by UN Framework on Climate Change – is thermal resistant which reduces the need for air conditioning. The Indian government has approved standards for 10-storey high structures.
To address the housing affordability challenge, systematic changes have to be made by city governments as “millennials across the globe are spending more on housing than any previous generation, with a lower quality of life.” (Judge & Tomlinson, 2018)