Making affordable housing accessible to everyone, everywhere »News Live TV» Business
The lack of affordable housing has long been a major global problem, in both developed and developing countries. This crisis is not just a result of a person’s ability to rent or buy a home, but also the long-term affordability of being able to live comfortably in it. Of course, we are thinking of big cities where essential workers are excluded from the rental market, let alone home ownership. A 2019 survey of 200 cities around the world found that 90% were unaffordable for low- and middle-income workers. The average price of a house in Hong Kong is more than 20 times higher than the average household income.
Many economists have blamed the “financialization” of real estate as an investment opportunity for the wealthy, resulting in an oversupply of luxury housing and a tangible lack of affordable housing options in larger cities. Yet even far from these cosmopolitan centers, low-income people struggle to survive, with America’s lowest-paid workers having to spend more than half of their wages on rent.
Address the issues
Many factors contribute to this lack of affordability. Housing costs have increased even with the soaring cost of building materials like aluminum and steel. This impacts the price of a finished development, and those prices increase much faster than the income of potential buyers. Demographic changes such as population growth and aging as well as the scarcity of land for new construction are also proving to be a problem.
However, no problem is insurmountable and we are already witnessing the introduction of innovations in construction and the development of new financial models designed to bring affordable housing within the reach of several million people. Cities around the world have been working on new solutions that could be adopted everywhere. To tackle a root cause, in India a much cheaper new building material, Glass Fiber Reinforced Gypsum (GFRG), is being used to cut costs up front – savings that will be passed on to buyers. .
The first steps on the ladder
As the housing industry and government-supported programs gain momentum, opportunities for low-income workers and first-time buyers have also opened up. In the UK there is already a completely free mortgage advice service from Trussle, an organization dedicated to making home ownership accessible to everyone, regardless of credit history, low income or fluctuating income. Their experts take everyone’s situation into account before they find the most suitable mortgage products to enable them to buy an affordable home and to ensure they can become a long-term homeowner.
This service is a step in the right direction and could be adopted in other global economies to make shopping more accessible. Other infrastructure issues should be addressed, such as the availability of transport and public services and the development of safe and secure living spaces close to labor markets. But it seems the world has finally woken up to tackle this crisis head-on, and sooner or later low-income hard workers will wake up in their own affordable homes.