September 12, 2005

UN urges measures to avert urban housing crunch

UNITED NATIONS (Reuters) - Two billion more people will be
moving into the world's already overcrowded cities over the
next 25 years, requiring 4,000 new housing units per hour
between now and 2030 to accommodate them, a U.N. agency said on

Already three billion people, half the global population,
live in urban areas, the U.N. Human Settlements Program
UN-HABITAT said in a report which concludes the private sector
alone will be unable to finance housing for everyone in need.

While mortgage financing has expanded over the past decade
and is available in a growing number of countries, it is mainly
the middle and upper classes that benefit from mortgages,
leaving the poor mainly on the sidelines, the report said.

While a middle class is emerging or growing in many
developing countries, including China and India, it is
disappearing in other parts of the world such as sub-Saharan
Africa, overtaken by poverty, UN-HABITAT said.

The report calls on governments and financial firms to
explore ways to help those living in poverty, including new
subsidies, lending guarantees, microfinance and community-based
financing schemes such as shelter community funds and savings
and credit societies.

There are also nonfinancial constraints to the purchase of
housing that governments could help overcome including laws
that make it difficult for buyers to use real estate as
collateral for a loan, it said.

Legal and institutional reforms are needed "to protect the
rights of both lenders and borrowers as well as to enhance
access to credit," the report said.

The goal of such reforms is to create middle ground between
the two extremes of current systems: "affordable shelter that
is inadequate, and adequate shelter that is unaffordable," it