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While the need for housing is widespread, individually people have different needs—depending on whether they are single, married, senior citizens, families with children, or members with disabilities. Despite the best of intentions of policymakers, "a roof overhead" remains an elusive goal for a large majority of the world’s people. Most households cannot afford even the cheapest house that fits their needs and qualifies as “decent,” and no government alone can close this gap with subsidies. Nor are we on track to build the 300 million new houses needed to close the housing gap by 2030.
What’s missing? At least three misconceptions stand in the way of better housing policies:
1. Housing and employment policies are independent of each other.
Households need a continuous stream of income to pay for housing. Innovations are making economies more productive but employment more precarious. Automation has already wiped out good paying permanent jobs in formal economies, leaving many families dependent of “flexible working arrangements.” For example, 95% of the 10 million jobs created in the U.S. between 2005 and 2015 were “alternative work”—i.e. temporary, contract, or freelance assignments rather than traditional 9 to 5 jobs.
These flexible job markets are not being supported by equally flexible or tenure neutral housing policies, which are still focused on ownership and long-term mortgages. Governments that do not address this issue risk seeing their efforts at housing reforms actually increase credit defaults and the homeless population.
2. Incremental housing has no long-term prospects.
Most of the institutional structure for designing, financing, and subsidizing housing has been geared to those operating in the formal economy. And they are the minority in developing countries. If access to housing were a highway, those who had the cash to buy a house or the cachet to get a bank mortgage would be in the express lane speeding toward home ownership; while the rest of the road was a bumper-to-bumper traffic jam filled with those most in need of housing—“the informals.” In Sub-Saharan Africa, 70% of the 10 million people moving to urban areas every year end up living in slums. Only about 2 million are lucky enough to live in a formal housing unit during their lives. The rest will have to be content with improving their existing informal homes gradually over time, but without access to the know-how to achieve even minimum safety standards.
Today, 1.2 billion people are living in substandard housing. By 2030, this figure is expected to reach 3 billion. Policymakers would better serve the needs of their constituents by balancing housing policies aimed at the acquisition of new housing units with those that help finance home improvements—and provide the technical assistance—so that people can bring their most important asset up to building codes.
3. The role of government in housing is best limited to post-disaster relief.
The data suggests that each new housing unit can create 3 full-time jobs, and it affects the ongoing debate on the role of government in housing, whether in supporting the construction of new houses or the retrofitting of informal ones. Advocates of government intervention argue that housing is as much a right as access to education or healthcare. For opponents, housing is a private asset subject only to limited government intervention, until an earthquake, flood, or hurricane leaves thousands of people injured or homeless. In the midst of public grief, everyone looks to the government for help in reconstruction, no matter how high the costs.
And the price tag—in terms of loss of life and property—is disproportionally higher in developing economies. After the 2010 earthquake in Haiti, estimated costs were larger than its annual GDP, mostly due to housing. The estimated costs of the 2011 Japanese earthquake were only 3.6% of GDP. Investing in making new—and existing—housing more resilient can close such gaps.
"Designing a dream city is easy," Jane Jacobs, the writer and activist for the social and economic benefits of cities, once noted. “Rebuilding a living one takes imagination." The challenge for policymakers in the developing world is to begin reimagining their cities with the realities of rapid urbanization, changing labor market, and inevitable natural disasters in mind. In that picture, affordable, safe housing—owned, rented, new, or retrofitted—looms large.
Please tweet:
Housing and employment policies are interdependent. #Housing4All
Incremental housing is part of the solution to #Housing4All.
A natural disaster that destroys existing housing may also destroy the economy.
While the need for housing is widespread, individually people have different needs—depending on whether they are single, married, senior citizens, families with children, or members with disabilities. Despite the best of intentions of policymakers, "a roof overhead" remains an elusive goal for a large majority of the world’s people. Most households cannot afford even the cheapest house that fits their needs and qualifies as “decent,” and no government alone can close this gap with subsidies. Nor are we on track to build the 300 million new houses needed to close the housing gap by 2030.
What’s missing? At least three misconceptions stand in the way of better housing policies:
1. Housing and employment policies are independent of each other.
Households need a continuous stream of income to pay for housing. Innovations are making economies more productive but employment more precarious. Automation has already wiped out good paying permanent jobs in formal economies, leaving many families dependent of “flexible working arrangements.” For example, 95% of the 10 million jobs created in the U.S. between 2005 and 2015 were “alternative work”—i.e. temporary, contract, or freelance assignments rather than traditional 9 to 5 jobs.
These flexible job markets are not being supported by equally flexible or tenure neutral housing policies, which are still focused on ownership and long-term mortgages. Governments that do not address this issue risk seeing their efforts at housing reforms actually increase credit defaults and the homeless population.
2. Incremental housing has no long-term prospects.
Most of the institutional structure for designing, financing, and subsidizing housing has been geared to those operating in the formal economy. And they are the minority in developing countries. If access to housing were a highway, those who had the cash to buy a house or the cachet to get a bank mortgage would be in the express lane speeding toward home ownership; while the rest of the road was a bumper-to-bumper traffic jam filled with those most in need of housing—“the informals.” In Sub-Saharan Africa, 70% of the 10 million people moving to urban areas every year end up living in slums. Only about 2 million are lucky enough to live in a formal housing unit during their lives. The rest will have to be content with improving their existing informal homes gradually over time, but without access to the know-how to achieve even minimum safety standards.
Today, 1.2 billion people are living in substandard housing. By 2030, this figure is expected to reach 3 billion. Policymakers would better serve the needs of their constituents by balancing housing policies aimed at the acquisition of new housing units with those that help finance home improvements—and provide the technical assistance—so that people can bring their most important asset up to building codes.
3. The role of government in housing is best limited to post-disaster relief.
The data suggests that each new housing unit can create 3 full-time jobs, and it affects the ongoing debate on the role of government in housing, whether in supporting the construction of new houses or the retrofitting of informal ones. Advocates of government intervention argue that housing is as much a right as access to education or healthcare. For opponents, housing is a private asset subject only to limited government intervention, until an earthquake, flood, or hurricane leaves thousands of people injured or homeless. In the midst of public grief, everyone looks to the government for help in reconstruction, no matter how high the costs.
And the price tag—in terms of loss of life and property—is disproportionally higher in developing economies. After the 2010 earthquake in Haiti, estimated costs were larger than its annual GDP, mostly due to housing. The estimated costs of the 2011 Japanese earthquake were only 3.6% of GDP. Investing in making new—and existing—housing more resilient can close such gaps.
"Designing a dream city is easy," Jane Jacobs, the writer and activist for the social and economic benefits of cities, once noted. “Rebuilding a living one takes imagination." The challenge for policymakers in the developing world is to begin reimagining their cities with the realities of rapid urbanization, changing labor market, and inevitable natural disasters in mind. In that picture, affordable, safe housing—owned, rented, new, or retrofitted—looms large.
Please tweet:
Housing and employment policies are interdependent. #Housing4All
Incremental housing is part of the solution to #Housing4All.
A natural disaster that destroys existing housing may also destroy the economy.
Join the Conversation
Thanks Justin for the youth bulge and its demographic paradox. I am a graduate in MA International Relations and am very interested in research. I forsee much of the bomb than the dividend to be the result in many of our African countries. This is due to the political instability, unemployment and the youth bulge. What in your opinion can the youth do to avert this and have the dividend?
Good Update
As above data reveal, the youth bulge will be an important demographic phenomenon in developing countries, and especially in Sub-Saharan African countries, in the coming decades. While it is important to increase the employability of young people themselves, it is also essential to facilitate dynamic structural change to create jobs for youth. By doing so, the youth bulge can be transformed into a... demographic dividend, and the demographic bomb can be defused.
Read more Read lessInteresting in joining The conventional approach for dealing with youth bulge is to make young people job ready. The idea is that young people’s skills – or more broadly, human capital—needs to be increased to enhance their productivity in the labor market. The 2007 World Development Report, Development and the Next Generation, lays out the policy agenda by focusing on five key life transitions: learning,... work, health, family, and citizenship. Three “lenses” are used to focus the policy discussion: opportunities, capabilities and second chances. Basic skills and access to secondary and tertiary education, for example, are needed to create opportunities, while capabilities to make the right decisions for seizing opportunities can be enhanced through better information, access to credit and other factors. On the other hand, when outcomes are negative—for example, poor decisions lead to low levels of education or exposure to communicable diseases—young adults may need access to services
Read more Read lessIt's very important not to neglect the youth bulge and also not to neglect the digital 1 The youth bulge is a common phenomenon in many developing countries, and in particular, in the least developed countries. It is often due to a stage of development where a country achieves success in reducing infant mortality but mothers still have a high fertility rate. The result is that a large share of... the population is comprised of children and young adults, and today’s children are tomorrow’s young adults. Figures 1 (a)-(b) provide some illustrative examples. Dividing the world into more and less developed groupings (by UN definitions) reveals a large difference in the age distribution of the population. The share of the population in the 15 to 29 age bracket is about 7 percentage points higher for the less developed world than the more developed regions. In Africa (both Sub-Saharan and North Africa), we see that about 40 percent of the population is under 15, and nearly 70 percent
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