A healthy city, beyond cycling - #04: Affordable housing
Cities around the world are rushing to create more cycling paths in the wake of the current pandemic. Cycling is a great starting point for creating healthier cities. However, it does not end there. In this series, we'll take a look at some other key aspects of a healthy city. Today's topic is Affordable Housing. How can we provide a home for all and fight the rising housing prices in our cities globally?
Authors: Gintare Norkunaite, Ada Jaskowiec and Marianne Lefever
As COVID-numbers are rising again, it feels like we might be asked to "stay home" again. If that seems like a good place to stay, you belong to the lucky ones. In India, the first lockdown caused mass migration from the cities back to rural villages as informal workers were looking to leave their poor living conditions and overcrowded urban ghettos. In North America, students moved back home as they could no longer afford their housing when their temporary jobs vanished. And in Toronto, an April rent strike occurred after just two weeks of lockdown, illustrating once more how tight a budget many are living on. And we have not even discussed the one billion people who live in informal settlements like slums or refugee camps today and for whom “staying home” is an impossible demand altogether. This current pandemic has highlighted once again the much older affordable housing crisis.
Affordable housing is generally defined as housing for which an occupant pays no more than 30% of his or her income for gross housing expenses such as rent and utilities. Some interesting numbers on the gravity of the situation are summarized in the infographic below. More than half of the US population pays more than that, with 20% spending over half of their income. In Europe, Eurostat classifies renters as overburdened if they have to spend 40% of their disposable income on rent. That leaves 1 in 10 Europeans without access to affordable housing.
Source: PosadMaxwan & Healthy City Global
However, affordability is more than this 30% metric. Affordable housing also needs to include that you are able to meet expenses related to living in the area. You might be able to afford a home in one area but if it requires you to own one or two cars or heavily rely on public transit because it is located too far from work or school, it might not be so affordable in the end. In Toronto, the average cost of housing, utilities, and transport alone eats up about 50% of the median income.
Who is affected most?
Owning our own home creates stability and generally allows us to accumulate wealth. It contributes to our economic well-being and quality of life. However, as housing costs are rising faster than income, more and more people are excluded from this crucial stepping stone in life. The population groups that seem to be especially vulnerable are young people, migrants, and working poor. But the middle-class is also struggling. Their income exceeds the social housing threshold but is often too low to buy their own house. Yet, middle-income groups are crucial in building vibrant cities. They make up a big part of property tax revenues for the local governments and are often prolific consumers who tend to spend a big part of their income in local amenities such as groceries or restaurants. They are an active group that often challenges local governments on high-quality amenities in their neighborhoods, such as parks, libraries, public schools, or transportation. Affordable housing is not a marginal problem. It is affecting a fast-growing segment of the population with significant consequences for our health & well-being.
How unaffordable housing affects our health & well-being.
Acquiring a roof over our head is not the end. The quality of that roof is just as important. On average, and certainly, in 2020, you’ll spend over half of your time at home. This means that there is no other environment which influences your health more than your own house, not even your air-conditioned office, a car stuck in a traffic jam on a polluted highway, or a crowded train carriage. Unsatisfactory living conditions not only directly influence our physical and mental health, but can also indirectly hinder our relations with other people and our position in society.
To limit the cost, people settle for lower housing conditions which increases their exposure to multiple health-threatening factors. Overcrowded homes increase the risk of infectious diseases, while low sanitary conditions contribute to the development of chronic diseases. Dampness and moisture, which touches over 10% of EU-citizens, causes respiratory infections, headaches, or nausea. Dust enhances allergic reactions and excessive indoor temperature contributes to irritability and social intolerance, while a low temperature can cause anxiety and depression. Not to mention chronic sleep deprivation due to light pollution and noise, which touches a quarter of residents of high-developed countries such as Germany or the Netherlands. These are just a few examples of the direct health impact when being forced to settle for lower housing conditions. Indirectly though, when tenure takes up the majority of one’s income, savings have to be made on other aspects of life such as food or healthcare.
Housing conditions can also hugely influence interpersonal relations and professional performance. Young people postpone the decision to start a family due to problems with housing. The inability to find affordable accommodation in the desired location, either close to a workplace or to one’s relatives, may lead to giving up professional ambitions and solitude resulting from loosening family bonds. Financial obligations and lack of alternatives push people to endure a dysfunctional relationship just to avoid losing a place to stay. Increased rates of domestic abuse during the 2020 forced lockdown shed more light on this tragic arrangement. Almost life-long mortgages discourage people from switching jobs and force them to postpone retirement.
It is clear that affordable housing is not just about economics. It has a significant impact on our health & well-being too. And it is one of the key stepping stones for many other aspects of a happy and healthy life like food, education, or strong social connections.
So what can we do about it?
Some cities are plagued by extreme speculation on the housing market with investors deliberately keeping units of the market to drive prices up. Sometimes it is a scarcity of land that is boosting prices or land-use and zoning bylaw restrictions that limit where additional housing can be built. Whatever the drivers may be in your city, there are many examples of mechanisms that can help a city stay affordable and keep poverty and homelessness at bay. The infographic below shows different examples of what can be done and some practical examples of cities that have taken concrete action.
Source: PosadMaxwan & Healthy City Global
Case1. Strong government policy in Singapore
Singapore can boast one of the highest percentages of house ownership in the world. 9 in 10 citizens own a house, but – and this is exceptional – only one of them has purchased it for its commercial market value. That one out of 9 usually belongs to a high income or expat segment. In the 1960s, in a country with an exceptionally high percentage of millionaires and extensive urban slums, a state-owned Housing and Development Board was created to provide affordable housing along with developed subsidy policies (bank loan, HDB loan, retirement fund withdrawal). Flats are offered for a 99-year lease and it is prohibited to own more than two units or to resell them within 5 years after the purchase.
Source: Bloomberg CitiLab
Singapore treats housing as a social asset and always approaches it as an integrated place-making strategy. As a result, every housing estate is connected to a public transport node and offers supporting facilities such as schools, healthcare, or restaurants. Also, a quota system applies that regulates equal ethnic distribution – each block of units has an ethnic composition similar to the national average.
This strong government regulation might not work just anywhere in the world. Still, it is an interesting case on how housing as a social right combined with strong government action can make a city and its citizens thrive.
Case2. A rent cap regulation in Berlin
Unregulated housing markets always result in a shortage of affordable housing and a wide offer of expensive units tailored to investors more than local inhabitants. Cities such as New York, Vienna, Madrid, or Amsterdam constantly struggle with rising rents, which requires ongoing adjustment of policies and control of the housing market.
In 2017 rents in Berlin rose by 21% within a year, which is disproportionally high compared to the average income rise. Berlin is dealing with this problem by introducing a rent control law within the non-public housing market. It assumes a 5-year rent cap at the level of June 18th, 2019, and sets the maximum rent per square meter depending on the building’s standard, facilities, or completion year. It is designed to bring back balance within the market and to stop residents from fleeing city centers for cheaper suburban areas.
Case3. A community-driven solution in Zurich Future residents can also take matters into their own hands and act from the supply side. This was proven by the Hunziker Areal development in the Leutschenbach district of Zurich. The estate was conceived by a nonprofit housing cooperative – Mehr als Wohnen – founded as a merger of 55 smaller ones. The city of Zurich made 4 ha of post-industrial land available to the cooperative for development under favorable conditions. 20% of the flats were underpriced and reserved for families on welfare and the remainder was offered at a fair but not excessive market price.
Source: Mehr als Wohnen cooperative
The design of the development focuses on sharing instead of owning. One common masterplan proposed collective principles, which several architects later translated freely into diverse typologies for people at different phases of their lives. As a result, the project has many common spaces like winter gardens, common kitchens, co-working spaces, workshops, rooftop gardens, etc. To avoid too much homogeneity, the project includes small businesses such as dance and yoga studios, bakeries, and a daycare. These do not just serve the locals but they also attract visitors from the whole city turning Hunziker Areal into a vibrant neighborhood.
Affordable housing is a problem in most mid to large scale cities. It will not get any better with this current economic crisis creeping upon us. Luckily there are many measures we can take to mitigate the impact and the power does not only lie with city hall. From developers to banks and construction companies, everyone has a part to play. As citizens and local communities, we can also contribute by joining forces as they did in Zurich for example. What would you like to do or see happen in your city to address this growing problem?