Asia and the Pacific accounts for around 60% of the more than 1 billion people worldwide who live in slums and informal settlements. Good quality housing is a basic and essential need and a vital component for a livable city, which is why it’s one of the priorities of the Asian Development Bank’s (ADB) Strategy 2030.
Hong Soo Lee, a senior urban specialist at ADB’s Sustainable Development and Climate Change Department, shares insights from a recently published working paper on best practice and potential areas in housing support by ADB. Mr. Lee co-authored the report with senior housing expert and ADB consultant Ashna Singh.
Why do we need to enhance support for decent and affordable housing?
Ensuring that everyone has access to decent quality housing is imperative for communities to achieve social equity, economic resilience, and truly inclusive development. By 2030, some 3 billion people are expected to need shelter. Most of them will come from lower- and middle-income countries where population growth is outpacing the supply of formal housing.
ADB supported successful housing projects in the 1980s–1990s, but financing declined in the mid-2000s as demand from borrowing countries shifted to sporadic projects rather than comprehensive programs. The pandemic highlighted the critical link between a person’s living environment and their social, physical, and economic well-being. It also underscored the urgent need to develop more effective solutions to close the huge gap in the supply of decent and affordable housing.
What are the challenges in addressing the lack of adequate housing?
Housing is a complex, multifaceted sector, which has faced a range of challenges in this region over the years. Unwillingness by governments to allocate public lands to housing projects posed doubts over the financial viability and scalability of policy interventions during the 1970s through to the 1990s, which included providing houses with basic utilities and slum upgrading. A shift away from pro-poor projects, an overemphasis on home ownership, and a neglect of rental approaches, hindered progress in the 2000s. At this time, governments focused on enabling the private sector to provide universal housing through regulatory and legal reforms, rather than rely on public agencies to produce houses solely for the poor.
What were the key takeaways from decades of providing support to the housing sector?
There is no silver bullet to address the affordable housing deficit. Housing means different things to different people. For some, it means a permanent home, while others treat it is as temporary accommodation. For the most needy it’s a roof over their heads, while for the wealthy it’s often a financial investment.
Assessing housing needs should go beyond a physical count of houses to be built to achieve a deeper understanding of tailored solutions for different communities. There is a need to balance assistance for the poor and vulnerable with measures to create an enabling environment for middle-income earners to access affordable housing and finance.
Financing developing Asia’s infrastructure needs as economies expand and climate change impacts, remains a huge challenge and must include the private and public sectors.
Asia-Pacific cities face challenges to provide adequate infrastructure and services to the growing population and, at the same time, can become the engines for economic growth.
How can ADB help to provide decent housing for everyone?
ADB is fully committed to supporting housing sector as part of its operational priority of making cities more livable.
ADB can play an important role in strengthening the synergy between the public and private sectors in housing, through its sovereign and nonsovereign operations. Loans and other forms of support to governments can enhance their enabling role, including through housing finance and policy and regulatory reforms, and by helping the neediest groups through infrastructure upgrades, rental support, and cash subsidies. Funding for the private sector could support small-scale developers, banks, and housing finance companies to develop housing solutions.
Moreover, ADB’s involvement in the housing sector should address the needs of marginalized communities facing extreme housing stress. These include women, ethnic minorities, migrants, elderly, disabled, and other vulnerable groups in lower-income countries and particularly in urban areas.
ADB will need to develop and adopt innovative scalable business models and use a tailored approach to suit the specific context of its developing member countries (DMCs). Enhanced support will not only come through investments in housing, but also in generating new knowledge solutions, implementing innovative projects, fostering collaborations with key stakeholders, and building DMC’s capacities in the housing sector.