Habitat report: Emerging economies undervalue housing’s share of GDP, risk missing a key to COVID-19 recovery
ATLANTA (Oct. 5, 2020) — Emerging economies struggling to recover from the COVID-19 pandemic may be significantly underestimating how much their housing sectors contribute to gross domestic product and, as a result, missing opportunities for economic and social revival, according to a report released by Habitat for Humanity to mark World Habitat Day.
Existing datasets in low- and middle-income countries are often incomplete or inaccurate, and efforts to measure housing’s contribution to the economy have largely focused on developed countries, according to the report commissioned by Habitat’s Terwilliger Center for Innovation in Shelter and co-authored by Arthur Acolin, assistant professor of real estate at the University of Washington, and Marja Hoek-Smit, director of the International Housing Finance Program of the University of Pennsylvania’s Wharton School Zell/Lurie Real Estate Center.
But including the often-overlooked housing services and informal housing components reveals that housing accounts for up to 16.1% of GDP on average across 11 emerging economy countries analyzed in the report. That places housing on par with sectors such as manufacturing that often draw far more attention in economic recovery plans.
Inclusive financial interventions in the housing sector, particularly through construction or rental assistance, can stimulate economies in these countries while also improving the wellbeing of families through healthier housing conditions, according to the report, Cornerstone of Recovery: How Housing Can Help Emerging Market Economies Rebound from COVID-19.
“Look beyond the blind spots in the data and you see that housing can make or break a recovery,” said Patrick Kelley, vice president of the Terwilliger Center. “Investments in healthy, secure housing have greater-than-expected benefits, creating jobs, generating incomes and, critically, helping alleviate the overcrowding that makes communities more vulnerable to threats such as COVID-19.”
The authors recommend stimulus policies that, in cooperation with the international and private sectors, focus on middle- and lower- income families while also including formal and informal markets, rental and owner-occupied housing, and community organizations. They emphasize short-term actions to: improve land-tenure security and equitable access to land for housing; open access to finance for developers, households and landlords; provide equitable subsidies to households; and offer incentives to lenders and builders.
Kelley and Hoek-Smit join other housing experts in a conversation about some of the report findings, and their implications today during “+You: Is housing the secret to economic recovery from COVID-19?,” a panel discussion available at www.habitat.ngo/economicrecovery.
About Habitat for Humanity
Driven by the vision that everyone needs a decent place to live, Habitat for Humanity began in 1976 as a grassroots effort on a community farm in southern Georgia. The Christian housing organization has since grown to become a leading global nonprofit working in local communities across all 50 states in the U.S. and in more than 70 countries. Families and individuals in need of a hand up partner with Habitat for Humanity to build or improve a place they can call home. Habitat homeowners help build their own homes alongside volunteers and pay an affordable mortgage. Through financial support, volunteering or adding a voice to support affordable housing, everyone can help families achieve the strength, stability and self-reliance they need to build better lives for themselves. Through shelter, we empower. To learn more, visit habitat.org.
About Habitat’s Terwilliger Center
The Terwilliger Center for Innovation in Shelter, a unit of Habitat for Humanity International, works with housing market actors to expand innovative and client-responsive services, products and financing so that households can improve their shelter more effectively and efficiently. The goal of the Terwilliger Center is to make housing markets work more effectively for people in need of decent, affordable shelter, thereby improving the quality of life for low-income households. To learn more, visit habitat.org/tcis.