Shelter and Housing

Current Global Scenario

As described in Financing Shelter: Global Report on Human Settlements (United Nations Human Settlements Programme, 2005), the situation of housing and shelter provision is characterized by two features: (1) affordable housing that is inadequate, and (2) adequate housing that is unaffordable. The first dimension has to do with the global challenge of slums and informal housing, which are mostly seen as inadequate solutions, and the second has to do with provision of formal housing through market or state mechanisms, which often proves to be inaccessible for low-income groups. These superficially distinct dimensions are connected, however, at various points, most actively through urban land markets.

Homeownership is the majority tenure across western Europe, with some exceptions—notably in Germany. Owner occupation is also a prevalent mode in most of the developed economies. Even in transition countries, such as Hungary, Bulgaria, Estonia, Romania, Poland, and Slovakia, homeownership is between 70% and 90%. In these countries, there is considerable housing stock, but it is characterized by poor maintenance and an absence of well-developed finance systems. However, generally housing prices are four times the average incomes in all of these northern countries.

The problems of affordability in the South are considerable. As per the 2005 Global Report on Human Settlements, the ratio of income to housing price is just under 6 in Latin America and the Caribbean, 7 in oriental Asia, almost 10 in the rest of Asia, and more than 10 in Africa. The conventional housing market, thus, bypasses low-income groups. The large-scale development of slums and informal housing is a response to this. It is estimated that about 40% of the population of less developed countries and 78% population of least developed countries lives in slums. Recent data and analyses indicate that the current global backlog of slum dwellers is about 925 million people.

When this figure is combined with the projected 1.9 billion additional urban populations over the next 20 years, 2.825 billion people will require housing and urban services by 2030. Further, a bulk of this addition will be in developing countries and, geographically, 90% of this additional growth is predicted to be in East and South Asia (United Nations Human Settlements Programme, 2005). To accommodate the increments in the number of households over the next 25 years, 35.1 million housing units per year will be required. Thus, both the current scenario and the future predictions present formidable challenges.

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