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Thursday, October 2, 2014

Global Housing Gap--Another Sign of Inequality

Housing the world's growing population is not easy. Keeping track of this is the job of UNHabitat:
Rapid urbanization places remarkable strain on housing and serviced land. By 2030, about 3 billion people, or about 40 per cent of the world’s population, will need proper housing and access to basic infrastructure and services such as water and sanitation systems. This translates into the need to complete 96,150 housing units per day with serviced and documented land from now till 2030.

In some cities, up to 80 per cent of the population lives in slums. Fifty-five million new slum dwellers have been added to the global population since 2000. Sub-Saharan Africa has a slum population of 199.5 million, South Asia 190.7 million, East Asia 189.6 million, Latin America and the Caribbean 110.7 million, Southeast Asia 88.9 million, West Asia 35 million and North Africa 11.8 million.
 But, what to do? That's a tougher issue, and Bloomberg News reports that the global consulting firm of McKinsey & Co is actually thinking about this.
Replacing the world’s substandard housing and building affordable alternatives to meet future global demand would cost as much as $11 trillion, according to initial findings in a McKinsey & Co. report.

About 330 million households -- about 1.2 billion people -- now struggle with substandard housing, a number that may increase to 440 million in 11 years, McKinsey forecasts. Acceptable housing is within an hour’s commute of work and has basic services including flush toilets and running water, the report says.

In Lagos and Bombay, two of the world’s fastest-growing cities, the issue of inadequate housing is particularly grim as both emerging metropolises are poverty-ridden. There, the affordable-housing gap amounts to more than 10 percent of each city’s economic output.

The deficit presents an opportunity for construction companies -- with some of largest markets in emerging economies such as China, India, Brazil and Russia. Mortgage lenders also stand to benefit; by 2025, the market for affordable-home loans could be worth as much as $400 billion a year, the report said.
The point is important. If governments cannot afford to house their populations--or prefer instead to send a rocket to Mars--maybe the private sector can step in. The missing ingredient in this formula, however, is how these people who cannot currently afford a decent place to live will in the future be able to do that. That problem of income inequality keeps coming back to bite us.


  1. Perhaps of interest, on E Europe and their rather bad situation.

  2. sorry if this comment seems dismal. You are absolutely right that the growth of slums is taking place on an exponential curve. indeed, it would be better to view the worlds population in terms of categories such as "slum dwellers", "rural dwellers" etc, rather than other less-significant breakdowns. But anyway - to my point. Having spent time in the slums of E Africa ... I remember my own shock when I found out that the people were actually paying RENT for these dilapadated houses made of wood and corrugated iron, And who collects the rent? The wealthy people and politicians in the cities themsevles. So it's all an economic "set-up" ... there is NO intention for many third world countries to "fix" the problem. They are too busy getting rich from it.

    Pete, USA

    1. Yes, I couldn't agree more. It is a very sad state of affairs.