Delving into the Heart of Housing Affordability: Crucial Talking Points and Awareness Raising Tactics
Factual Insights About Residential Spaces Often Ignored in Dialogues:
Venturing into the fiery debate on housing and its related issues can be muddling, with many facets to consider. It's easy to lose track and overlook the vital aspects. To shed some light, we chatted with global advisor Dr. Orna Rosenfeld, an expert in urban development and housing, who shares her invaluable insights on what we should focus on when discussing this burning topic.
Engaging with Orna for Housing Wisdom
If you’re seeking wisdom on complex housing concerns, Orna Rosenfeld, an international advisor, research scientist, and author, is the go-to person. With expertise in the Global North, working with foreign banks, EU, UN, and numerous international organizations, she is well-versed in diverse views, concerns, and aspirations regarding housing. In our enlightening conversation, she offers guidance on bringing awareness to the forefront.
Advanced Insights from a Proven Advisor
According to Orna, the following five points should be at the heart of any housing conversation:
1. The Irreplaceable Importance of Housing
Sometimes, the significance of housing might be underrated. If we aim to tackle the housing affordability crisis and other housing issues, Orna suggests emphasizing housing's indispensable role in our cities.
Think of each city part as a layer (like a city masterplan drawing!): there's traffic, public spaces, industry, shopping, and housing. Eliminate the housing layer, and not much of the city would remain intact. Orna underscores that housing makes up a significant portion of the cityscape's surface.
In addition, the cultural and physical infrastructure of cities – parks, theaters, cinemas, retail – loses relevance without housing. As Orna articulates, "If housing is abandoned, basically, cities are abandoned because who’s going to use the parks, who's going to use the theatres, the cinemas, and retail?"
2. Dismiss the Complacency Regarding Adequate Housing
In the developed regions of the Global North, good housing might be taken for granted, with few people thinking much about it. After all, most of them enjoyed favorable housing conditions while growing up. However, they often overlook that this comfortable situation is the result of decades, even centuries of policymaking.
One example is Vienna, which addressed its dreadful housing situation following the Industrial Revolution by erecting social housing. Today, it is renowned for its extraordinary liveability, thanks to its substantial stock of social and affordable housing. Vienna owns 220,000 municipal housing units, and an additional 200,000 units are subsidized (in a city of 1.9 million inhabitants).
We must respond to the new challenges posed by the COVID-19 pandemic, digital revolution, and other factors. As Orna points out, it's essential to act decisively to ensure housing remains affordable in cities. Yet, this will only occur if we understand the need for action.
3. Curb the Explosive Rise in Housing Prices
Orna contends that it's no longer about housing prices rising steadily but about their spiraling inflation. She mentions Berlin as an example, where housing prices have escalated by 197% over the past ten years. "This is not an increase anymore. This is an inflation of housing prices," Orna emphasizes.
We should treat this inflation as such instead of viewing it as a temporary trend. This implies regulating the housing market to adapt to trends and challenges flexibly. Failing to do so can lead to dire consequences. It was initially low-income households who struggled to afford housing, but today, numerous middle-income earners face the same plight, even in big cities like Paris, New York, Moscow, and London. In the future, this problem might even affect high-income households. As Orna ponders, "The rapid housing price increase we have witnessed over the past decade has not been matched by the salary increase in any income group!"
4. Housing is Unaffordable for Many
It's not surprising that many feel they can't keep pace with this inflation in housing prices. Orna points out that this inflation can make even those with good incomes feel vulnerable. Some rue that they can no longer afford city living due to shame and vulnerability. Most of us (especially Europeans) were raised with the idea, "Much effort, much prosperity," meaning that hard work will ensure a desirable life, including a reasonable-sized home. Now, many question, 'If I can’t afford such a home, am I not working hard enough?'
Orna underscores that we must abandon this way of thinking and concentrate on solving the housing crisis. The ability to afford has nothing to do with personal shortcomings; it's about the fact that housing is becoming less affordable for a growing number of income groups. Consider this: In 2021, the typical flat price in Paris was roughly €11,000 per square meter and could rise further depending on the district.
"Let's be clear, the housing price increase we observe is not linked to any increase in housing quality in any way. So, the question we should be asking isn't whether we can afford it or not, but rather does this all make sense or not?" Orna points out and adds:
"I'd like to shift the discourse from 'I’m not really sure I would be able to afford it,' to questioning ourselves, 'does this price, and this price increase, make any sense?'"
5. The Social Cohesion of Cities is at Stake
We must act now, as making city life affordable is essential for maintaining social cohesion and ensuring social mobility. "We are not just talking about feeling unwarranted feelings of shame and vulnerability," Orna explains. "We are actually talking about the long-term cohesion of our cities and the cohesion of our neighborhoods."
Why? Many already find it challenging to afford living in cities, with middle-income earners increasingly affected as housing prices climb at a quicker rate than salaries. If no action is taken, the next generation will likely be priced out of the neighborhoods they grew up in. Orna cautions, "Imagine if the housing prices in 10 years have gone up another 150% in cities. What are we going to do? What I usually tell people is: the cost of inaction, at this moment, is basically seeing our children being displaced."
Moving Forward: Solving the Conundrum
So, how can we untangle this chaos? Orna suggests speaking up. Whether on social media, through advocacy networks, or by engaging with policymakers, everyone can make their voice heard.
It's crucial to avoid placing blame. The housing affordability crisis is a complex issue with numerous factors at play, such as investors, local dynamics, regulations, and demographic shifts. Finger-pointing won't help us move forward and find long-term solutions to the crisis.
Also, remember to be patient. Solutions take time to evolve. However, Orna notes improvements in attention given to housing issues by institutions and organizations compared to several years ago. By emphasizing the arguments listed above, perhaps we can raise even more awareness around the discussion of housing.
Key Takeaways: Battling Housing Affordability one Talking Point at a Time
In discussions about housing, the following points should be raised:
- A city without housing is no city at all.
- Adequate housing must be safeguarded long-term through sustained policy and regulatory attention.
- Impose regulations to tame the inflation of housing prices.
- If we can't afford it, don't blame yourself; join the efforts to solve the housing affordability crisis.
- The social cohesion of cities hangs in the balance, so act now to preserve our neighborhoods and our children's prospects.
Investing in personal-finance education can provide insights into managing the effects of high real-estate prices and housing affordability issues. For instance, understanding the historical context of housing prices, such as the regulated social housing system in Vienna, may help in analyzing the current crisis.
When examining the housing market, focusing on the overall societal and cultural impact of unaffordable housing, such as the potential loss of social cohesion in cities and the displacement of future generations, can be a critical aspect of investing in real-estate and personal finance. Engaging in dialogues around housing affordability, advocating for policies that prioritize affordable housing, and being patient in the search for effective solutions will contribute to a brighter future for many.
