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Tuesday February 22, 2022
Housing affordability: addressing the crisis

This week’s edition of Global Local looks at how local governments around the world are tackling housing affordability issues.

In 2016, the UN reported that almost 90% of cities were considered unaffordable (house prices at more than 3 times the median household income). However, in many developed nations such as New Zealand, the UK or South Korea, this measure is an understatement, with average house prices surpassing 8 times the median household income – and renting just as unaffordable. The trend does not appear to be easing, with prices continuing to outpace wage increases.

The concept of affordability goes beyond the cost of buying and maintaining a house. Homes where this is achievable but which are located far from adequate employment or education opportunities cannot be called affordable. When key workers such as teachers or hospital staff cannot afford to live near their places of employment, they have to bear the financial and time costs of long commutes, displacing households and damaging communities. 

What are the impacts? Aside from individual hardships of housing-related inequality (income and intergenerational), there are compounding issues for regions and even society as a whole, including ageing populations as birth rates fall, displacement of key workers, and the burden on state services and economic growth that higher income inequality brings

Why is this happening globally? While causes vary area to area, common factors include: increased scarcity and value of land, low interest rates, supply chain changes, urbanisation, lack of housebuilding, income increases not matching the housing market, and demographic changes.

Can local government make an impact? Some of the local government solutions we've loved this week have been lessons from Berlin's affordability strategy through rent controls and first refusal on buying rental properties, Vienna's unusual approach with 60% of the population in social housing, and an initiative from Cork, Ireland, helping senior citizens to ‘rightsize’ to free up family homes.
Read on to find out how countries around the world are approaching the issue.

Welcome to the Global Local Recap from LGIU!

Each week we’ll focus on a different global topic, highlighting innovative content and insights from LGIU and our members around the world. Please forward or share this free newsletter. If you’ve been forwarded this email, join our mailing list to get free, fresh insights from LGIU Global Local each week. 

  • The final LGiU and VLGA global panel of 2021, Innovative Approaches to Addressing the Housing Crisis, brought together representatives from Cornwall Council in the UK, Cork City Council in Ireland, and Infrastructure Australia to explore the ways in which local governments can and are working to address the housing crisis.
  • The panel looked at different initiatives to work collaboratively with housing providers and private developers, to expedite planning processes, access land and increase housing supply, as well as the diversity of housing stock available to meet local needs.

For a summary of the key discussions of the panel, click here to view the briefing on our website. 
Alternatively, you can watch the recording
of the panel on Youtube.

LGIU Global Local Highlights
Supporting affordable housing delivery for a fair and just recovery: lessons from Europe
The pandemic emphasised the lack of available and affordable housing while creating uncertainty around construction and development. This briefing outlines areas with potential for local government to effectively lead on increasing available and affordable housing. Click here to read this briefing.
Affordable Renting? Learning from the Mietpreisbremese experience in Berlin
This briefing explores how the classic approaches to affordable renting followed by local authorities are producing poorer results, and how the revival of price ceiling control seems to be having positive results in Berlin. Read this briefing here.
Is the key to housing affordability and viability reducing cost of production?
Production costs, their impact on the viability of housing development, and the implications for supply and affordability of new dwellings are some of the most important issues currently affecting the housing sector. This briefing uses insights from an SCSI report to consider the issue. Read this briefing here.
Case study: Arus Mhuire Rightsizing Housing Project – Cork, Ireland
Cork City Council's initiative facilitating downsizing from larger homes to free up social and private housing by providing age friendly accommodation has won numerous awards. Read how they achieved this in their article for LGIU.
Find the excerpt below, or Click here for the full article.

Rightsizing is a senior citizen’s active, positive choice to move home as a means of improving their quality of life. Senior citizens can move from a large home to a smaller one, or from an expensive area to a cheaper one, and cash the difference – removing the negative connotations of downsizing.

Cork City Council Housing Directorate took the initiative on this trend with the Arus Mhuire project. The initiative was to provide age-friendly homes, to facilitate independence and choice and provide older people with the opportunity to live in housing appropriate to their needs, while at the same time facilitating the effective use of existing housing assets by making use of vacated homes and increase housing provision. The result was a unique, 30-unit housing scheme.

The accommodation is designed to accommodate residents and visitors with varying levels of mobility, including those in wheelchairs, recognising that the needs of each individual will also vary over time. One and two-bedroom dual-aspect houses and apartments are provided, allowing for single or double occupancy, and in the case of the two-bedroom units, a room for guests to stay in, extra storage or a study space as required. All accommodation is at dwelling entrance level, and each unit has a private outdoor space, whether small back garden or balcony.

Car parking is located close to the site entrance and within the central courtyard which is at the heart of the scheme. This courtyard is secure, sunny and animated, and has a unique character, creating a sense of place for residents and visitors alike, whilst providing operational benefit in terms of passive surveillance. The development enjoys quality public transport, pedestrian, cycling and private car links, and is within easy walking distance of a range of amenities and services, including shops, healthcare facilities and a popular local amenity walk.

All dwellings have BER ratings of at least A3, are well-insulated, have quality double-glazed Alu clad windows and doors, making living costs for residents low whilst comfort levels are high.

Click here to read the full article
Policy & Resources

Report: Making Affordable Housing a Reality in Cities – World Economic Forum
Deeply examines potential local government options for tackling the affordability crisis primarily from the supply side, from financing mechanisms to innovations in construction, providing supporting case studies from municipalities around the world for each to illustrate application.

Case studies: ​​Learning from International examples of affordable housing – Shelter
Presents a series of detailed case studies on a range of affordable housing initiatives globally; exploring not only what worked but using context to work out why it worked, helping to draw out applicable lessons for elsewhere. 

Thanks for reading! 

Next week, we'll be looking at weatherproofing active travel, and beyond that keep your eyes peeled for an International Women's Day special.

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