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Record: 1
Title: Affordable housing and sustainable development: a tale of two
systems.
Authors: Mota, Nelson
van Gameren, Dick
Source: Architectural Review; Apr2016 Supplement World Architecture
Festival, p14-17, 4p
Document Type: Article
Subjects: Public housing
Sustainable development
Low-income housing
Housing policy
Great Britain
Singapore
Abstract: The article discusses the feasibility of developing affordable and
sustainable housing projects. It notes that inequality in housing
opportunities became a trend in countries like Great Britain and
Singapore where the state promotes affordable housing policies.
It cites the need to integrate informal building practices with plans
to urbanize cities as part of efforts to achieve the United Nations'
(UN) Sustainable Development Goals.
Full Text Word Count: 2148
ISSN: 0003861X
Accession Number: 114619802
Database: Art & Architecture Source
Affordable housing and sustainable development: a tale of two systems

According to the World Urbanization Prospects published by the United Nations in 2014, in the next
three decades the rate of urbanisation will increase at a fast pace, adding 2.5 billion new dwellers to the
current urban population. To accommodate this growth the world needs to create the equivalent of 300
new megacities, each roughly the size of London.

However, London, like Rome, was not built in a day, and maybe creating new megacities is not the best
solution to cope with this path of urbanisation. So, where will all these people live? More importantly,
perhaps, how will these new urbanites dwell? What will be the role of architects and urban planners in
this process? Answering these questions is anything but simple.

Recent critical scholarship following in the footsteps of Henry George's Progress and Poverty or Thomas
Piketty's Capital in the Twenty-First Century singles out inequality as the single most problematic issue
that challenges the future of cities, both in the so-called urban global south and in the most developed
countries. The recent history of the role of the state in the promotion of affordable housing is vital to
understanding how inequality in housing opportunities became the new normal.

Historically, affordable housing policies designed to promote more inclusive cities have been used as

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social engineering and the instruments of economic policy. This was the case of Sweden's Million
Homes Programme (1965-74) or Singapore's post-colonial affordable housing programme developed
from the 1960s through to the 1970s. This was the moment when the paradigm of the state as producer
of affordable housing was fully fledged.

After the deregulation process of the early 1980s, the public sector changed swiftly from producer to
being the enabler of the affordable housing market. For example, in Britain, the housing estates
developed in the 1960s by the Greater London Council were replaced with housing vouchers -- the
famous Housing Benefit, which is currently used by the government to enable roughly 5 million lower-
income households to access the private and public rental sector.

The same trend can be found in many other social, economic and political contexts, including Sweden,
where roughly a quarter of the country's households are beneficiaries of housing allowances.

This paradigm shift, as many housing experts have already demonstrated, created a new political
economy of affordable housing that favoured middle-class households, large housebuilding companies
and the mortgage finance industry. And it went far beyond the geographical boundaries of the traditional
welfare state societies. In China, for example, in 1998 and for 10 years after, mortgage finance was less
than 1 per cent of GDP. In 2008 it rose to an overwhelming 15 per cent. As a side-effect of this sudden
abundance of money in the housing market, housing prices -- and the cost of urban land in particular --
increased sharply. Consequently, with the enabling and expansion of housing markets, the shelter
problems of low-income sections of the urban population were not solved: and they have stagnated and
deteriorated since.

In Shanghai, for example, the average housing space per person for rural migrants in 2010 was
13.98m'2, down from 14.93m2 in 2000. In fact, in 2010, 8.4 per cent of the urban population of Shanghai
lived in overcrowded dwelling units, where housing space is less than 8m2 per person. At the same
time, as reported by The Guardian in July 2015, the six European-style suburban boroughs built by
Shanghai Planning Commission in 2001 remained mostly empty. This dual portrait testifies to the
inequality produced by the paradigm-enabling housing markets that emerged in Shanghai after the
welfare housing system ended in 1998. Of these boroughs, Holland Town and Thames Town are now
mainly used by young Chinese couples as backdrops for their wedding photos, while millions of
Shanghai's citizens are living in crammed flats.

The shock waves of the new political economy that steered housing policies after the fully fledged
development of neoliberal housing markets are widespread across the globe. The Chinese 'ghost town',
a token of this phenomenon, became a trending topic in western media, even -- or especially -- when
such cities started to appear in a different continent, Africa. In July 2012 a journalist reporting for BBC
News was quite impressed with 'Angola's Chinese-built ghost town', the infamous Kilamba New City,
which had been planned to accommodate half a million people in the suburbs of Luanda, Angola's
capital. As in Shanghai's copycat towns, only the higher echelons of Angola's middle class can afford
the flats built by the powerful China International Trust and Investment Corporation (CITIC) in Kilamba.
Two-thirds of the Angolan population still lives in shantytowns in the suburbs of the country's main cities.

The number of informal settlements in Angola is in tune with the percentage of slum dwellers in sub-
Saharan Africa: at 62 per cent, it is the region of the world with the highest slum prevalence. In southern
Asia the proportion of slum dwellers reduces to 35 per cent, while in Western Asia, Latin America and
the Caribbean one fourth of the urban population was classified by UN-Habitat as living in slum

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conditions in 2012. North Africa has the lowest prevalence of slum dwellers in the Urban Global South,
with a level of 13 per cent. According to UN-Habitat, the number of slum dwellers is now estimated at
some 863 million, compared with 650 million in 1990 and 760 million in 2000. This relentless growth of
ill-housed populations calls for a critical account of the current political economy of affordable housing.

In 2015 the United Nations announced its famous Sustainable Development Goals (SDG) for the next
decade and a half. Among the 17 SDGs, there is one -- goal 11 -- directly focused on the development
of sustainable cities and communities. One of the targets to achieve this goal is to ensure by 2030
'access for all to adequate, safe and affordable housing and basic services and [to] upgrade slums'.

Considering the worsening state of affairs outlined above, is this a feasible target or just wishful
thinking? Answering this question is all but simple. In 2000, the Peruvian economist Hernando de Soto
presented a groundbreaking hypothesis that allegedly would unlock the entrepreneurialism of the
majority of the poor in the developing world, and eventually contribute to solve the housing problem of
the Global Urban South.

In his The Mystery of Capital, De Soto argued that the economic prosperity of the developing world
could be triggered by a very simple process: giving title deeds to extralegal squatters. This simple
initiative would instantly bring to life trillions of dollars, transforming dead capital into fungible assets.
Despite gathering many institutional supporters for his quasi-mystical belief in the power of the real
estate market, De Soto's ideas have not yet proved their potential to promote more equitable and
sustainable societies. In fact, the inequality and the social divide between formal and informal economic,
spatial and social practices persists.

According to housing experts, the bottom 60-80 per cent of the population in the urban global south has
to resort to incremental housing schemes to obtain adequate housing. Incremental housing offers an
alternative to the real estate market through building practices based on self-help and self-contracting,
distributing the construction costs through time in consecutive upgrading stages. In Brazil, for example,
62 per cent of new housing investment in 2005 was triggered by self-financed progressive housing,
mainly in the informal sector, while only 3.2 per cent was generated by mortgage finance of developer-
built units.

Indeed, in Brazil the mortgage finance as a share of GDP grew from 2 per cent in 2002 to 4.1 per cent in
2011. The governmental housing programme Minha Casa, Minha Vida (My House, My Life), launched in
2009, contributed a great deal to this increase. In 2011, one million houses had been contracted,
through an institutional and financial engineering system targeted to provide shelter to families earning
up to three minimum salaries, a group that concentrates about 91 per cent of Brazil's national housing
deficit. The development and construction of these houses was delegated to the private sector. Despite
the amplitude and the ambition of the MCMV programme, its impact on mortgage finance as a share of
GDP in 2011 was still remarkably low in Brazil compared with 17 per cent in Chile in that same year, and
much inferior to 71.8 per cent in the United States in 2010, after the sub-prime crisis. Yet Brazil's 4.1 per
cent is still much higher than in the most populated African country, Nigeria, where in 2011 mortgage
finance corresponded to only 1 per cent of the GDP.

In contrast with the global prevalence of the enabling system in the political economy of affordable
housing, in Ethiopia the government remains the provider. In effect, the number of affordable housing
estates produced by the government is increasing swiftly since the outset of the Integrated Housing
Development Programme (IHDP), launched in 2004. Over the last decade, the government produced

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220,000 dwelling units and aims to increase the pace of construction to meet the goal of building 50,000
units a year. While this is a remarkable achievement, it is still insufficient to cope with the housing
backlog in Addis Ababa, due to the city's rapid demographic and economic growth and the substandard
living conditions observed in most of the existing settlements.

Ethiopia's two-digit GDP annual growth observed over the last decade has created an emerging middle
class that struggles to find accommodation to meet its housing aspirations. Empirical research shows
that the middle class has eventually occupied a great deal of the estates developed under the IHDP,
thus distorting the initial aims of the governmental programme. Consequently, and in resonance with a
phenomenon disseminated worldwide, in Addis Ababa the development of new informal settlements
continues despite the ongoing massive state-led affordable housing production.

The persistence of urban informality in Addis Ababa and in many other urban agglomerations of the
Global Urban South challenges the optimism of the UN's Sustainable Development Goals and testifies
to the need to integrate informal building practices as part and parcel of the path of urbanisation of cities
in rapid demographic growth. It is high time to think about urban informality as a 'new' way of life, as the
urban researcher Nezar AlSayyad puts it.

The financial sector and high-level policy makers such as the World Bank are already showing signs of
an increasing interest in urban informality, After three decades of failed attempts to implement the
'enabling' approach, the political economy of affordable housing has developed new instruments to
penetrate the multi-billion markets populated hitherto by informal entrepreneurship. Housing
microfinance has developed at a fast pace over the past few years. Further, big corporations such as the
Mexican cement manufacturer Cemex, its Swiss competitor Holcim, or Philips, the Dutch manufacturer
of home appliances, can be seen frequently sponsoring development programmes, design awards, or
research projects focused on affordable housing strategies engaged with local circumstances,
participatory processes and heterodox building practices such as incremental housing. Maybe these are
the signs that De Soto's Mystery of Capital is about to be finally revealed. Or maybe not

In any case, there is sufficient evidence that demonstrates the need for a new approach to the design
and politics of affordable housing, one geared to promote more inclusive and resilient human
settlements.

We need a housing system ready to acknowledge the importance of the what AbdouMaliq Simone
describes as the 'conjunction of heterogeneous activities, modes of production, and institutional forms
that constitute highly mobile and provisional possibilities for how people live and make things, how they
use the urban environment and collaborate with one another'. In other words, we should look at people
as a vital infrastructure for 21st century cities and not just to systems of highways, pipes, wires, or
cables.

This does not mean that we should give away technical expertise and all become social workers. Quite
the opposite: technical expertise can and should play a key role in contributing to counter the radical
inequality that currently cuts off an increasing number of people from the subsistence solidarities that
were part and parcel of life in the traditional city.

Ethiopia 19.5%/1

India 32.7%11

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Nigeria 47.8%/2

China 55.6%/26

Brazil 85.7%/10

United States 81.6%/14

Chile 89.5%/1

The Netherlands 90.5%/0

percentage of population in urban area / Number of large cities (> 3 million inhabitants)

projected relative change in rural population 2015-2050 (annual percentage)

mortgage loans as a percentage of GDP

Opening spread: Kilamba New City near the capital of Angola. Photograph by Frederico Santa Martha

Opposite, top: Bukit Bakot town in Singapore

Opposite, below: Fittja in Sweden

Above: Addis Ababa. Informal processes could be the answer to meeting housing demands

Below: Eunápolis, Bahia, Brazil. Housing built for the 'Minha Casa, Minha Vida' programme

concentration of urban population living in slum areas

~~~~~~~~
By Nelson Mota and Dick van Gameren

Source: Architectural Review, Apr2016 Supplement World Architecture Festival, p14, 4p

Item: 114619802

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