Change the World for Renters, Change the World’s Housing Crisis

Change the World for Renters, Change the World’s Housing Crisis

Why overemphasizing homeownership is a mistake.

(Photo by Gabriel Santiago) 

This is your first of three free stories this month. Become a free or sustaining member to read unlimited articles, webinars and ebooks.

Become A Member

The affordable housing crisis — a source of headlines in many U.S. cities — takes on fresh urgency when you consider the global figures. According to a new paper from the World Resources Institute, 330 million households, or roughly 1.2 billion people, lack access to secure, affordable spaces to call home.

“The rapid shift toward urban housing makes it all the more challenging for cities to grow equitably and sustainably,” the paper states. “These challenges are most acute in the global south (India, Africa, Asia, Latin America) where the lack of affordable, adequate and secure housing in cities is projected to grow the fastest.”

The paper spotlights three key challenge areas “to providing adequate, secure and affordable housing in the Global South,” as well as suggestions for tackling them. They include the growth of informal or substandard settlements (i.e., slums), policies and laws that push poorer residents out of the city, or to its fringes, and, interestingly, an overemphasis on home ownership.

That last one might seem counterintuitive. At least in the U.S., property ownership is usually viewed as a boon to the economy as a whole, not to mention a key facet of upward mobility. But look at housing through a public health lens, and you see more opportunity for more people by boosting the rental market, the paper contends.

The authors write:

Home ownership has been encouraged the world over as a way to create assets. The process of creating personal assets has influenced how cities grow and how citizens accumulate wealth. Governments have influenced and supported individual home ownership through incentivizing policies and financing options. …

However, policies that overemphasize home ownership implicitly penalize those who cannot benefit from them. Subsidies benefit people with regular and documented incomes, not the under-served or those who work in informal markets. Mortgage markets require documentary evidence of a job and income stability to successfully qualify candidates for loans, which are often explicitly or implicitly subsidized.

More problematically, the overemphasis on ownership in many economies just takes up too much mental bandwidth, according to the paper. Other policies (one that might “promote more housing at all price levels”) go unconsidered.

Cities could choose to embrace rental housing as a solution. They could improve the enabling environment for landlords, provide protections and mediation options for tenants and landlords, and foster a spectrum of rental housing options. In this way, it would be possible for cities to meet the housing needs of many more people, and in a wider range of locations, than if they focus merely on ownership

The paper makes a number of suggestions in the policy area — for example, governments could restructure their tax codes to incentivize renting (and providing rental units) in the way that property, income, capital gains taxes and tax breaks tend to incentivize homeownership.

Beyond the policy-side, however, it also looks at a number of creative rental models, from land leases and co-ops to lump-sum rentals, which are popular in a number of Asian countries, including Thailand, China and India. In lump-sum agreements, tenants tend to pay a large sum up-front and then minimal monthly rent over the life of the lease. The paper also makes a case for a practice known as “hot bedding,” in which “a bed space in a shared room is rented for a specific number of hours to sleep, typically 7 to 10 hours.”

(Credit: The World Resources Institute)

“Promoting a range of rental housing options expands opportunities for more renters while testing which types of rentals best meet local demand,” the authors conclude.

Rachel Dovey is an award-winning freelance writer and former USC Annenberg fellow living at the northern tip of California’s Bay Area. She writes about infrastructure, water and climate change and has been published by Bust, Wired, Paste, SF Weekly, the East Bay Express and the North Bay Bohemian

Follow Rachel .(JavaScript must be enabled to view this email address)

Tags: affordable housinghealth

Next City App Never Miss A StoryDownload our app ×

You've reached your monthly limit of three free stories.

This is not a paywall. Become a free or sustaining member to continue reading.

  • Read unlimited stories each month
  • Our email newsletter
  • Webinars and ebooks in one click
  • Our Solutions of the Year magazine
  • Support solutions journalism and preserve access to all readers who work to liberate cities

Join 653 other sustainers such as:

  • Eric at $60/Year
  • Dina in San Francisco, CA at $60/Year
  • Anonymous at $10/Month

Already a member? Log in here. U.S. donations are tax-deductible minus the value of thank-you gifts. Questions? Learn more about our membership options.

or pay by credit card:

All members are automatically signed-up to our email newsletter. You can unsubscribe with one-click at any time.

  • Donate $10 or $5/Month

    Next City notebook

  • Donate $20 or $5/Month

    The 21 Best Solutions of 2021 special edition magazine

  • Donate $40 or $10/Month

    Brave New Home by Diana Lind