Are We Facing a Global Housing Crisis?

Understanding housing needs in big cities, and beyond.

The developed world is facing a global housing crisis. It is an issue that has plagued capital, and larger cities, for longer and more intensely but it is a crisis that is spreading to secondary cities as well. 

There are a number of reasons for the crisis, some are more relevant to some cities than others, but for the most part they can be applied to large cities around the world. The more popular the city, the more exacerbated the problem. This means that international finance centres and cities are also increasingly at the centre of the housing storm.

Affordability, shortage and quality are issues plaguing housing in urban centres. Urbanisation is on the rise, fuelled by younger populations flocking to the cities for employment, experiences and the innovation these cities provide. With a whole generation (millennials that’s you) marrying and starting families later, single people households are fuelling a demand for housing that is pushing many cities into extreme housing shortage situations. 

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Large cities are plagued with housing crisis'. Image by Claudio Schwarz.

In the developed world, we are renting for longer and longer, pushing up demand for rental properties that governments and property developers are struggling to meet with. Central to all of these issues however is affordability. Housing costs, as a percentage of an individual or families monthly income, are being pushed higher and higher every year. Property prices are rising without pause. Even with a global pandemic ravaging around us, global property prices have remained steady in large, capital cities. In some cities they have even increased. 

Property shortages and rising rents also bring up the issue of quality. When there is a huge demand to live in a particular city or area of that city, prices can rise without there being a consequential look at improving the quality of the property on offer. There is less of an emphasis on quality which ultimately impacts on tenants and the homes they are living in. In a landlord's marker there is less room to negotiate for property improvements. 

Let’s take a more detailed look at the issues plaguing the provision of housing in urban centres around the world, and by understanding these issues maybe we can figure out a better approach to housing that puts quality of life and community first. 

If only because housing issues are forcing people out of major cities which over time can have a long term impact on the diversity of cities that would be hard to bring back again once it is lost. Pricing out more and more people does not strengthen a city. In fact the opposite. 

It also has the potential to trigger far reaching implications for society as well. It contributes to the delaying of the age at which people choose to start a family. It also impacts mental health. The Affordable Housing Commission polled over 2,000 London residents. 13% of those polled reported that their mental health was directly affected by the housing situation. 

Shortage of housing

Quite simply there are not enough homes being built to meet demand. This is a problem that is particularly profound in London. In 2019, the estate agency Savills, found that the city fell short of its new home delivery target by 65,000 homes a year. When there is a shortage of housing it triggers a crisis that pushes existing housing prices higher. It is an endless cycle that needs fixing. The number of new homes being built in London was increasing- but this year will deal this number another blow, with an estimated 35% drop in homes built compared to 2019. This will only make the shortage worse. 

Affordability

This is an issue that is hitting the 25-39 age group the hardest. According to research, 70% of those in this age group reported that the cost of their housing (be it through rent or a mortgage) was making it difficult for them to work and live in London. This is an incredibly large percentage of people and it not only reflects the severe issue of the housing crisis but also is a warning of what it could mean for the city, if a brain drain of people out of the city due to rising housing costs, were to occur. 

Unaffordable housing is pushing more and more 18-24 year old's to live with their families. Over half, according to the Affordable Housing Commission, are still at home. While 18% of those aged 25-34 year old's still cite their family home as their primary residence. More and more young people are unable to gain the independence that comes from having their own home, even if it is a rented property. This then can impact on all areas of their lives- from employment, to their social life and relationships. 

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More young adults are living at home with their parents'. Image by Vlad Solomakha.

A Better Way

What this global housing crisis teaches us is that there has to be a better way to approach how we develop and provide housing in urban centres. There is a demand for high quality, rental properties that enable tenants to enjoy a high standard of living in different areas and locations around London. There is a need to rebuild the relationship between tenant and landlord, to a relationship of trust and mutual respect. For the last few years innovative approaches to housing, including co-living, have been exploring options to help solve the housing crisis. Not only are they contributing to the increase in new homes available each year, but they understand that housing is more than just somewhere to live, it is also an opportunity to build a shared community that comes together to live, work and play.

There is no one solution to the developed world’s housing crisis. Nor is there any one simple, quick fix solution. It will take a huge amount of effort, time and cooperation from all of the involved parties- tenants, landlords, property developers, local councils and the government. 

The first step is understanding that there is a problem. The second step must be fixing it. 

Vonder has a number of great flats in its co-living London, co-living Berlin and co-living Warsaw complexes that are a part of a new movement to offer quality flats and working spaces in dynamic neighbourhoods. Vonder understands the challenges the housing market faces in some of Europe's largest cities and we are committed to finding a better way to live. 





 

 

 

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