Courtesy The Daily Mirror

Colombo, March 28 (Daily Mirror) – Sri Lanka has been ranked the second in the world’s most unaffordable housing markets as per a report published by ‘The Economist’. 

According to the report, Cities in developing countries such as India, Indonesia and the Philippines are gaining hundreds of millions of people. 

“This urbanisation is only getting started. In South Asia, for example, barely 35% of the population is urban, compared with 80% in North America,” the report said.

“Yet problems in Asia’s great metropolises are mounting. The likes of Delhi, Jakarta and Manila suffer from awful pollution, traffic and crime. The greatest challenge is a shortage of decent and affordable housing. Fixing that would improve millions of lives. It would also boost economies by making city-dwellers more productive.

Asia is home to more than half of the 1.1bn people who live in slums, according to research by Habitat for Humanity, an NGO with headquarters in Atlanta. The Asian Development Bank reckons that more than 40% of Asia’s urban population lives in accommodation that is in some way substandard (for example because it is ramshackle, lacks services such as power and water or is overcrowded). The government of the Philippines thinks its cities need 7m more homes; Indonesia is said to be 27m short. In India, where data are patchier, estimates go up to 47m,” the report added.

A shortage of good housing goes hand in hand with high prices for the few decent dwellings. The Urban Land Institute, a non-profit group based in Hong Kong, reckons that quality flats in Manila, the capital of the Philippines, cost 20 times the median household income. That is a higher multiple than in Mayfair or Manhattan, and four times the level that the institute considers affordable”. Indeed, it finds that only seven of Asia’s 51 biggest cities boast formal housing markets that are affordable”, according to its thresholds.

All this is hurting Asian economies. For one thing, squalid conditions may be discouraging rural people who could find more productive work in the cities from starting new lives in them. A study in India in 2020 found that villagers in Bihar, a poor north-eastern state, would rather earn 35% less at home than endure difficult conditions in cities.

Cheaper, safer housing would also bring more direct economic gains. Good housing reduces time lost to sickness. It provides space for people to carry on a trade from home. Security of tenure and room to study make it easier for children to enroll in school and to stay enrolled. A global study by Habitat for Humanity finds that replacing slum housing with better homes is associated with a 4% increase in life expectancy, a 28% increase in school attendance and a boost to local GDP of up to 10%. Climate change raises the stakes. Those living in rickety housing will be hurt most by shocks such as heatwaves.