Global affordable housing crisis

September 5, 2019

The demand for affordable housing in large cities is at a record high. House prices continue to rise and the lack of affordable alternatives is clearly visible. At INSYNC, we are determined to help solve the global housing crisis. But what is really causing the surge of house prices in cities all over the world and what can we do about it?

What is causing the global housing crisis?

Cities are growing fast and by 2050 over 70% of the world population will live in a city. In other words, urban population will increase with more than 2.5 billion people in the coming 30 years. To keep cities a liveable place for everyone we need to look at what is causing the global housing crisis. The following factors play a big role:

  • Cities are struggling to keep up with the demand for new houses. We are simply not building fast enough.
  • Supply of new houses mainly consists of social rent and expensive homes. Starters and middle-income households are not eligible for these types of homes.
  • Inflation of house prices all over the world is rising much faster than income growth. Amsterdam is currently the most expensive city in Europe based on disposable income.

What problems are caused by housing unaffordability?

Starters increasingly choose to rent a home instead of buying it, because they simply cannot afford to buy a house. Therefore, millennials get the appropriate nickname of 'generation rent'. This group experiences difficulties with living on a monthly basis, building up equity and climbing up the housing market. Just like starters, middle income households spend a large percentage of their income on rent. This percentage has risen to 40.9% in the Netherlands and will continue to increase as long as house prices rise faster than income growth. The same can be said for other cities around the world.

Why is it important and what can we do about it?

We regard affordable housing as a necessity for cities and its inhabitants. Affordable housing contributes to the social cohesion, quality of life and international position of cities. Cities should not only be a place for the ultra rich, but should be a place for everyone. Therefore cities will need to further grow, which increases the scarcity and price of available land. We believe that simply adding more homes does not provide a sufficient solution to the global housing crisis. Through better use of space and by sharing living costs, coliving enables more affordable housing.