There’s a desperate need for housing, so why isn’t more being built?

Even Singapore hasn’t been spared.

In a nod to its limited space, the wealthy island city-state carefully manages the availability of housing by subsidizing home purchases for more than 80% of its population. Yet, home prices there have nonetheless risen sharply of late – reflecting a troubling global situation.

The construction of new housing has generally lagged since the Great Recession. That’s had real consequences – according to the IMF, global house prices increased by nearly 70% in the first two decades of this century. And in many places the amounts people must pay relative to what they earn have become daunting.

The lack of housing supply has been fueled by anxiety about the impact of development on existing home values, apprehension about congestion, and a hyperlocal focus that magnifies both. Ultimately, it all adds up to the same thing: even relatively wealthy parts of the world share an inability to ensure people are wealthy enough to afford a home.

Now the pervasive impacts of COVID-19 and inflation are making matters worse.

However, some promising models for tackling the problem have emerged.

São Paulo, for example, has turned heads with zoning reforms that enable 36% more construction per property area than previously allowed, in a growing city with roughly 20 million residents – and its own experiences with NIMBYism.

Meanwhile Israel has deployed a scheme to boost its housing supply by letting residents sell additional development rights on their property in exchange for structural improvements (described as “upzoning an entire country”). Tokyo has mostly managed to keep homebuilding constant and home prices stable by relaxing restrictions on the construction of taller, denser structures.

Last month, the US unveiled a housing plan that also aims to foster more density by offering financial incentives for conducive land-use policies – while acknowledging a national shortfall of more than 1.5 million homes.

The new White House plan has been described as an overdue effort to counter a self-defeating NIMBYism that’s planted deep roots in places like the San Francisco Bay Area.

A recent story delved into ways activists in that region have managed to limit new housing – but it also described efforts to move away from NIMBYism to YIMBYism, by replacing “No” to development with a “Yes.”

Similar shifts could have an impact elsewhere. In Australia, where a recent government report projected an average housing deficit of 20,000 units annually between 2025 and 2032, some observers have pointed to a programme in Scotland as a potential role model.

That programme aims to deliver 100,000 affordable homes in the coming decade, through a combination of grants and private investment.

Housing markets have been hindered by a common flaw: those who manage to buy in tend to not want too many people to be able to enter behind them. So efforts to build more homes fall victim to a desire to preserve personal wealth, even if it means impoverishing others.

A consequence of this pattern is worsened inequality.

In the UK, for example, white British households are far more likely to own their own homes than ethnic minority households, according to government statistics published in 2020 – which showed that only 20% of Black African households owned their home, as did just 17% of Arab households.

Periods of crisis can aggravate already-troubling housing patterns like this.

A report published several years after the Great Recession found that in the US, a country where racist policies and lending practices have restricted Black home ownership, white households that owned their home had started to rebound from the worst effects – while Black households were still struggling to make up lost ground.

Similar discrepancies have emerged during the pandemic; by early 2021, a reported 13.4% of Black homeowners in the US were behind on housing payments and at risk of losing their homes, compared with 4.7% of white homeowners.

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