A failure to disrupt the housing sector is a failure to our economy, health and planet.
By Olivia Nielsen and Sam Lynch
The global housing sector is fragmented, slow to innovate, underfunded and often isolated from the rest development community. Yet, the sector’s status quo can no longer be tolerated. An estimated 1.6 billion people lack adequate housing, with the deficit continuing to grow larger each day. Yet, housing is a human right that provides families with far more than a secure place to live by supporting physical and mental health as well as access to quality educational and employment opportunities. Our failure to prioritize housing investments not only harms low-income households and other marginalized communities disproportionately, but also hurts every segment of the population by slowing economic growth, endangering public health and contributing to climate change.
In a time of global economic uncertainty and slowdown caused by the COVID-19 pandemic, the positive effects of housing investments on the economy can no longer be ignored. After analyzing housing data from 11 emerging market economies, Habitat for Humanity’s Cornerstone of Recovery report showed that the combined contribution of housing investments and housing services represents between 7 and 18% of GDP. Construction is a known job creator and governments tend to focus on large infrastructure projects to increase employment. Yet, housing construction creates more jobs than other asset classes but is rarely prioritized as an engine of economic recovery.
The link between housing and health is widely recognized. Research shows that investments in affordable housing support improved health outcomes and lower healthcare costs. Throughout the pandemic, the connection between inadequate housing and the spread of infectious disease has been laid bare as those living in poor-quality homes often experience a higher likelihood of contracting and even dying from the virus. Investing in housing has thus become a matter of public health and is key to fighting the inevitable next pandemic and saving lives.
Environment and climate change
With climate change already asserting its devastating effects worldwide, the built environment—and especially housing—are critical to mitigation and adaptation. As nearly 40% of global energy-related CO2 emissions come from the real estate sector (of which, approximately 70% is residential), reducing the carbon footprint of housing should no longer be optional. Existing approaches to building homes across geographies often contribute to urban sprawl and exacerbate the impacts of climate change by using unsustainable materials and establishing low-density settlements with high transportation needs. Instead, vertical densification and the use of resource-efficient local materials should be prioritized to build resilient, green and equitable cities. In addition, much of the existing global housing stock faces significant climate hazards and must be retrofitted to adapt to growing risks, prevent displacement and minimize reconstruction needs following a disaster. Prevailing practices across the housing sector thus both accelerate climate change and continue to put households at risk of its worsening impacts.
The coalition’s commitment to change
The compounded crises of a global recession, the COVID-19 pandemic and climate change should be pushing all of us to seek urgent solutions to address each issue, or even better, all simultaneously. The transformational effect of high-quality homes on people, the economy and the planet demonstrate that the housing sector status quo must be disrupted.
Realizing that the full potential of the housing sector has yet to be unleashed, the Way Forward Housing Coalition (WFHC) has brought together development finance institutions, NGOs and private sector actors to move beyond the current paradigm. For too long, the global housing sector has been disjointed, lacked coordination among critical stakeholders, and neglected to establish a platform to share best practices (as well as failures). WFHC’s mission is to harness its collective strength and leverage housing sector resources, investments, and policies to drive economic growth, social equity and environmental sustainability in emerging market and developing countries. A failure to overcome the current housing paradigm is a failure to us all. We are proud to be part of a coalition that seeks to innovate to unlock the true potential of the housing sector.