Affordable Housing

Cities around the globe are facing a stark reality: There are not enough affordable places for people to live. Housing in most big urban areas is now considered out of reach for the average worker, fueling a growing sense that a decent home has become a privilege traded among the “haves,” impoverishing the “have-nots.” Thorny questions abound: Should new luxury apartments in London — many owned by foreigners — be allowed to lie empty, while thousands of people sit on waiting lists for affordable homes? If migrants streaming into Beijing for a better life turn to dangerous, illegal dwellings, where will they go when those places are demolished? The worst may be yet to come. The share of the world’s population living in cities is projected to reach 68% by 2050, up from 55% today.

Rising prices have made homes in 58% of major cities significantly unaffordable, compared with less than half five years ago, according to an annual study by research firm Demographia. That means it costs more than 4.1 times median annual income to buy a median-priced home. A typical apartment in Hong Kong now costs HK$7,169,000 ($916,225), which has helped fuel political protests. Other hotspots include Berlin, where a grassroots campaign to nationalize housing led to a radical plan to freeze rents for five years. Vancouver adopted North America’s first tax on empty homes, and cities from New Orleans to Athens are grappling with the impact of Airbnb-type rentals that effectively set aside thousands of units for tourists. New York City installed its most sweeping tenant protections in decades in 2019, capping rent increases and eliminating loopholes. The move came after Amazon.com Inc.’s expansion plans there were thwarted by community groups who feared residents would be priced out of the city. More governments have pledged to step up building: India aims to construct more than 40 million homes by 2022. Big companies have also responded. Alphabet Inc.’s Google pledged $1 billion to help create 15,000 homes in California. Still, that’s a drop in the bucket in a state with an estimated annual shortfall of 180,000 units.