GOAL 11

The world is developing at an unprecedented scale. Over the next 20 years, urban population in developing countries will double to 4 billion, while the urbanized land area will triple. Rapid growth helps create new opportunities, but it has also brought serious social, economic, and environmental challenges.

COVID-19 has only worsened housing disparity, by disproportionately impacting the most vulnerable. Many lower-income workers have lost jobs where remote work was not possible, and while pressure has been applied to governments to respond with programs and resources, they face fiscal challenges. Unaffordable housing has profound social consequences beyond the immediate economic drawbacks; decent and affordable housing should be an essential social resource that provides a bedrock of stability. Research has shown that in general, people whose housing costs are more than one-third of their household income experience a deterioration in mental health that goes beyond mere financial stress.

Today, 1 billion people live in urban slums, and 1.5 billion people live in countries affected by repeated cycles of violence. In the past decade, the number of people affected by natural disasters tripled to 2 billion. Low-income countries have accounted for only 9% of the disaster events but 48% of fatalities since 1980. The burden of disasters, conflict, crime, and violence falls disproportionately on the poor.

Affordable housing efforts are under added pressure amid the pandemic. Issues such as increasingly unreasonable home prices for potential buyers, high rents and unsatisfactory living conditions for renters, and the unavailability of social housing for people in need have become critical.

Ultimately, shortages of social housing can result in increasing homelessness. This dynamic has worsened during the pandemic despite government pledges to protect tenants - for example, a study published in December 2020 warned that that more than 200,000 households in England would experience the worst forms of homelessness that Christmas, including sleeping on the streets.

Urban and rural communities around the world increasingly feel the urge to tackle these challenges and increase their resilience to poverty and inequality, social exclusion, violence and fragility, as well as climate change and disaster risks. Building sustainable communities—whether they are villages, cities, or countries and societies at large—will be critical to eliminating poverty and boosting shared prosperity.

According to pwc’s EMERGING TRENDS IN REAL ESTATE Report on real estate, there is much uncertainty. A huge release of pent-up demand led to record volumes of investment transactions as economies reopened in 2021.

While its degree of severity may be location-dependent, the link between housing disparity and racial inequality is inescapable. Despite efforts to prevent residential segregation in US housing markets, for example, in much of the country working-class African Americans continue to live in segregated enclaves - and to often find themselves at a relative disadvantage (along with other ethnic minorities) when applying for home loans. In this way housing affordability, while it can affect everyone in a society, remains particularly relevant for minorities - and this, too, has only worsened during the pandemic.

Institutional investors such as pension funds, insurance companies, and sovereign wealth funds could become more prominent sources of financing for housing, given their preference for stable revenue and long-term commitments. While there are many governments that have a strong political will to tackle the housing crisis, a lack of new housing supply is a lingering problem. When there is a sizeable discrepancy between current and target building levels, it is important to consider the financial aspects of proposed government solutions - to examine the full requirement of additional new construction, and where the necessary funding will originate.