Cities are growing at an unprecedented rate, presenting an incredible opportunity for the development of local economies. However, their residents need good, affordable housing – and this remains a challenge around the world. Well-functioning property markets can act as a financial springboard for enterprises and job creation. An enabling environment for affordable housing can be developed with the right infrastructure, investment and macroeconomic policies targeted towards social and financial inclusion. The challenge of affordability requires not just short-term fixes but also long-term strategies. Solutions will need to address both the supply side and the demand side of the housing market, and involve public-sector, private-sector and non-profit stakeholders.

Unpacking the notion of “affordability”: It is not only about being able to afford to buy or rent a house, but also being able to afford to live in it. This goes beyond meeting expenses related to operations and maintenance; it also involves considerations of transport, infrastructure, and services. If a house is cheap enough to buy and run, but located far from livelihood opportunities or amenities such as schools, it cannot be said to be affordable. The reasons for a lack of affordability vary from city to city, but commonly include housing costs rising faster than incomes, supply of houses not keeping up with demand, scarcity of land, and demographic changes such as population growth, ageing and changes in household composition.