One of the four common projects that Fr. Tomaž Mavrič has encouraged members of the Vincentian Family to participate in during this 400th Anniversary year is a project to end homelessness throughout the world, which includes caring for refugees, migrants, street people, displaced person, etc.
In a blog post from May 2016, Gloria M. Grandolini (with co-author, Ede Ijjasz-Vasquez) shares “3 reasons why ‘Housing for All’ can happen by 2030:
Three billion people will need new housing by 2030. Can we achieve this goal? Here are three reasons why we can.
1. The annual investment to new housing needed represents just 0.7% of global GDP
We will need 300 million new homes by 2030, or roughly 21 million new homes per year, according to UN Population’s data.
Building a new decent home with durable materials and necessary utility connections and services costs about US$25,000, which translates into US$525 billion per year.
A more concrete way to understand the scale of this investment is in terms of the GDP.
Global GDP was just over US$73 trillion in 2015, according to the IMF. This means that the world, as a whole, would need to invest annually around 0.7% of the GDP for house construction to meet the housing goal.
2. Falling poverty and rising incomes make housing more affordable
Poverty levels are a quarter of what they were in 1990 and account for 9.6% of the global population living below the poverty line.
Today, a household income of $10 a day could translate into a possible loan of as much as $15,000 (assuming 2 earners, 15 year loan at 5% with 40% of income used to service loan), which is certainly sufficient to construct a decent house. Where fiscal capacity allows, this could be supplemented with land allocations or targeted smart subsidies for the neediest, combined with solid financial inclusion programs.
3. India has set a 2022 Housing for All goal
India faces one of the toughest housing challenges, but is taking an uncompromising ambitious approach. The country set its own goal of achieving Housing for All by 2022.
The India Low Income Housing Finance project is challenging lenders to innovate. The World Bank Group is working with the government and the National Housing Bank to extend access to loans to people working in the informal sector, or those who don’t possess a formal property title but still have some form of property rights which can be used as collateral. Lenders are using new technology to better serve borrowers and developers are looking at new construction models to bring down costs. But ultimately, it’s the prospect of being able to serve a huge untapped market that is driving the private sector to innovate.
What works in India has tremendous potential to be effective in Bangladesh, Indonesia, Philippines and many countries in Africa where reconciling informal incomes with formal lending is still a struggle.
If the goal is possible, the question is how?
Having an efficient and inclusive financial system, a stable macro economy, access to long-term funding and strong land rights are all prerequisites to creating proper conditions for housing finance.
However, housing and infrastructure construction also requires a vast, long-term investment that governments can’t shoulder alone.
In addition to investing in construction, building materials and private housing development, the World Bank Group is helping countries address housing challenges by improving city planning, building regulations and access to land, investing in pro-poor infrastructure and slum upgrading, and strengthening residential rental markets.
The 7th Global Housing Finance conference, which got underway today, focuses on finding solutions to make housing more affordable, including mobilizing private sector financing to meet the housing needs.
While the global housing needs may be daunting, the #Housing4All goal is reachable if we work together and innovate.
- Are you currently doing anything in your branch of the Vincentian Family to end homelessness?
- Does your branch of our family have anything planned going forward?
Source: The World Bank Website
Originally published at famvin.org.