The implications of that, as we've seen housing costs rise far faster than incomes, particularly in the last five years. So it's been a long building crisis, but what we're seeing, the gap between what a family can afford and what it costs to create a unit of housing, is the widest that's been in modern history, and that has all kinds of negative implications. If a child grows up in in safeties and affordable housing, she actually stays healthier, does better in school than has the opportunity to move forward. We see communities that have mixed income, mixed-use housing actually performed the best. Is all we underbuilt for probably 12 years by several 100, 000 units a year And so over time if we're not creating supply of housing that puts pressure on affordability? The pandemic created a perfect storm all over the world. So suddenly the demand for housing went up, everyone wanted more space, wanted additional housing, and the supply chains were interrupted and the supply of housing got constrained even further for a couple of years. People started thinking of housing as more of a financial asset and less is a place to live, so you had a lot of distortions to the market. On top of that, you put all that together and what happened is we saw housing prices in historically affordable markets double over the last five years, going up far faster than incomes. So the public sector can't solve it by themselves, the private sector can't solve it by themselves. And I would argue particularly that you also need civil society, which amplifies the voices of the community and make sure that you're actually creating sustainable communities for for everyone. Atlanta is a good example and there are other cities that have done this, which is, hey, if you're creating a mixed income project with affordable housing integrated into it, we'll put you at the front of the line and we'll fast track your permits and entitlements. That's worth real money. If you're adding affordable housing into your project, we'll give you density bonuses. That's worth money. So they're think they're levers you can pull that don't actually cost the city very much that are meaningful to a developer. Cities own a lot of land. One of the fastest ways and sort of simplest ways to get going is to actually for cities to build on land they already own and create affordable housing.
Broadly agree with this analysis although the shift to housing as an asset rather than a place to live has been decades in the making. And not all cities own land which can be available for affordable homes. Interesting example from the US about planning priorities and flexibilities around affordable homes. I think these are harder to achieve in the UK with the national planning policies which take precedence.
HACT | Retrofit Credits
21hRead the report here https://www.weforum.org/publications/reimagining-real-estate-a-framework-for-the-future/?utm_source=linkedin&utm_medium=social_video&utm_term=9_16&utm_content=36595_housing_affordability&utm_campaign=social_video_2024