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Housing is a universal challenge demanding new solutions, say Duncan Maclennan and Julie Miao
The privatisation and deregulation of housing and related finance systems in the Organisation for Economic Co-operation and Development (OECD) economies and the transition experience of former communist economies contributed to an internationalisation of housing policy in the early 1990s.
Emerging and transforming economies received advice from the World Bank, the International Monetary Fund and the OECD urging financial sector deregulation, an end to rent controls, the privatisation of public housing and the growth of home ownership across all income groups. The advice was seen as largely one way and in many respects an international consensus on housing policy advice emerged from Washington, London and Paris.
That consensus has crumbled post-2008. An awareness of how the housing sector shapes the growth and stability of economies has developed as nations reacted to the global financial crisis. There are new concerns that international advice may have helped squander many of the gains from the previous 'boom' by raising prices and instability in housing markets. The old policies are now seen, at least outside of the UK, to be flawed quick fixes with negative long-term consequences.
The RICS-funded Global affordable housing report assessed how housing in Brazil, China and India has been impacted by growth and how their governments have shaped housing policies, before considering whether these changes have potential international relevance. Brazil, Russia, India, China and South Africa (BRICS) demonstrate the importance of promoting markets to house emerging demands. But their experience also shows the importance of removing or lessening the inherent failures in market systems and addressing the difficulties of households that cannot afford adequate market solutions. Looking at the BRICS leads back to a wider conception of what housing policies are for and what they can achieve, globally.
Affordable housing
The term 'affordable' is now so elastic that it creates confusion unless referenced to incomes, income distributions and housing costs. Broadly, the research referred to low-income housing problems as the outcomes for the poorest third of households in each country.
Fast growth per year in per head GDP (in the range of 5%-10%) typified the BRICS after 2000 and remains their likely prospect until 2030. This has taken place in...