Low-Income Housing Policies and Practices in Asia

Since the late 1980s, the United Nations Human Settlements Programme (UN-Habitat) has been at the forefront of promoting strategies to achieve adequate housing for all. Central to this vision is the enabling strategy, which emphasizes the role of markets as the primary mechanism for housing delivery while positioning the public sector as a facilitator. This approach has been particularly influential in Asia, where rapid urbanization and economic growth have created both opportunities and challenges for housing the urban poor. This article explores the evolution of low-income housing strategies in Asia, the role of the enabling strategy, and the ongoing challenges faced by millions of urban poor who still lack adequate housing.

The enabling strategy, as promoted by UN-Habitat, is grounded in the belief that markets should drive housing delivery, with the public sector providing incentives and facilitating actions by various stakeholders. This includes partnerships between local governments, the private sector, and non-governmental and community-based organizations (NGOs and CBOs). The strategy acknowledges the limitations of market mechanisms in providing housing for the poor and emphasizes the need for government intervention to recognize and upgrade informal settlements and develop innovative approaches to low-income housing (UNCHS, 1991: 12-62; UNCHS, 1997: 37). This balanced approach has been instrumental in shaping housing policies across the globe.

Today, most governments in Asia have adopted the enabling strategy, recognizing its effectiveness in delivering adequate housing to large sections of the urban population. This strategy has not operated in isolation but has been part of a broader agenda of national and global market liberalization. The rapid economic growth in Asia, particularly in urban areas, has led to the expansion of the middle class, creating a demand for housing that the enabling strategy has been well-suited to address.

However, despite these successes, significant challenges remain. Millions of urban poor still lack adequate housing, primarily due to rapidly rising land values and policies aimed at optimizing land use. These factors often make it difficult to secure land for low-income housing projects. The private sector, traditionally focused on supplying housing to upper-middle- and high-income families, has responded to these trends by moving down-market. This shift has led to the development of smaller units, mass production, and simplified finishes, including “shoebox units” of 25 m² or less (Angel and Chuated, 1987; Mukhija, 2004: 2236).

The private sector’s adaptation to market trends has been a critical factor in the evolution of low-income housing in Asia. As land values rise and demand for housing increases, developers have had to innovate to remain competitive. Smaller units and simplified finishes have become common, allowing developers to cater to a broader market segment. This shift has been particularly evident in the development of “shoebox units,” which are designed to be affordable and space-efficient. These units, often less than 25 m², represent a significant departure from traditional housing models and highlight the challenges of balancing affordability with livability.

Between 2010 and 2020, the urban population in Asia grew significantly, leading to increased demand for housing. This period saw a projected need for 16.5 million additional housing units, with a total market value of US$1 trillion in six major Asian countries. This growth underscores the ongoing need for innovative and effective housing strategies to address the needs of the urban poor. The enabling strategy, with its focus on market-driven solutions and public sector facilitation, remains a cornerstone of these efforts. However, the challenges posed by rising land values and land use policies continue to demand creative and sustainable solutions.

The enabling strategy, as promoted by UN-Habitat, has played a crucial role in shaping housing policies in Asia. While it has been effective in delivering adequate housing to many, significant challenges remain for the urban poor. Rising land values and land use policies continue to pose obstacles to the development of low-income housing. The private sector’s adaptation to these trends, through innovations like smaller units and simplified finishes, highlights the ongoing need for balanced and inclusive housing strategies. As Asia continues to urbanize and grow, the future of low-income housing will depend on the ability of governments, developers, and communities to work together to create sustainable and equitable solutions.