Here's How Developed Nations Are Addressing Affordable Housing Issues

Affordable housing is the need of the hour, not just in India but in developed countries, too. The aim is to provide low-cost, livable homes to those in need of them. Take a look at how developed countries are addressing such concerns:

The United States Of America

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San Francisco, Seattle, Denver, Portland, Austin are priced out today but housing advocates such as YIMBYs (a play on NIMBYs and stands for Yes In My Backyard) assert that housing costs are rising because of supply dynamics, the gap between density and livability, environmental impact etc. These housing advocates are not opposed to subsidised housing but do not think that these are sufficient. Here's what they think will mend the issue to some extent:

Expansion of private, public development as well as expanded tenant's rights and inclusionary zoning is what these advocates vouch for. One of the main challenges for them is to make the public understand that low-density may not be the only standard for livability.

New York alone saw 21,963 units of housing in 2016 for poor and working-class, the most since 1989.

Hong Kong

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One of the wealthiest countries in the world is also known for unevenly distributed wealth and therefore, one in every three residents is looking for subsidised housing. For such housing in Hong Kong the wait time could be as long as 4.6 years and if you are not able to survive those years, you would be out on the streets. Supply of these affordable homes is a dismal number. Over 30 per cent of the population is dependent on public housing while the not-so-lucky have to move to cage homes, rooftop settlements or divided units.

Housing evangelists believe that the government should look at ways to employ affordable and mixed-income units. One other avenue that is doing the talks is the rejuvenating of those properties which have not been utilised for a long time so as to improve land-use efficiency, for example, the vacant industrial buildings that could perhaps be repurposed.

As on March 31, 2015, there were about 395,600 subsidised sale flats across the country.

The United Kingdom

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In 2007, the UK government used 25 per cent of gross income as the figure for what was affordable but in 2016 average mortgage payments were clocked at 34.6 per cent. In 2004, then Prime Minister announced his plans of coming up with homes at a cost of £60,000 however, data suggest that eight of the ten planned developments that were completed moved in the market for a number far away from expected – at an average of £231,000 in one development.

There were 29,170 affordable housing starts on site in 2015-16, as reported by the Homes and Communities Agency and the Greater London Authority. The 32,110 affordable homes delivered in 2015-16 comprised of 6,550 social rent, 16,550 affordable rent and 9,010 affordable home ownership, shared ownership and intermediate rent.

Russia

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Russia built 81 million square meters of housing in 2014. This was around a one-fifth more than in 2013 and exceeds the previous all-time high of 72.8 million square meters built in 1987.  However, the number of new homes being built in Russia in any one year is around 800,000 to 900,000. This compares with roughly 1.1 million new homes usually built in the US in any one year. The US, however, has more than double Russia's population. By comparison Britain, with 44 per cent of Russia's population, built just 141,000 new homes in 2014, roughly 18 per cent of the Russian total. This massive splurge in the construction industry and prices is of concern to the authorities.

Mortgage loaning was uncommon to Russia, as the interest rates and taxes were very high even in 2005 and only the wealthiest 10 percent of Russians could afford to take a mortgage loan. The Housing Code that came into effect on 1st of March 2005 sought to replace the previous one of 1983 that took into account only state-owned housing. As per a study 50 per cent of the populace found housing solutions- renting or buying unaffordable and studies show that local governments using land access to finance social housing programs undermined land market development. Yet again, lack of construction finance discouraged new developers and restricted expansion of activities by existing developers.

As of now, affordable housing is a priority and industrial housing is being focused on.

To know about India's housing affordability crisis, read: Why There Is A Need To Make Affordable More Affordable