Severe worldwide housing crunch predicted by UN settlements programme
12 September 2005 – With the world's urban population expected to almost double to more than 5 billion in the next 25 years, governments around the globe will need to build almost 100,000 new housing units a day, provide subsidies and support community loan programmes, or else compound the enormous slum conditions that exist now, according to a United Nations Human Settlements Programme (UN-HABITAT) report.

"If adequate financial resources are not invested in the development of urban shelter and services, this additional population will be trapped in urban poverty, deplorable housing conditions, poor health, and lower productivity," said Anna Tibaijuka, Executive Director of UN-HABITAT, in presenting the contents of the report today.

With already 900 million people worldwide out of the 3 billion urban population considered "slum dwellers," much of the world is already undergoing a severe housing crisis, and many more do not have the money to pay for better housing.

In Indonesia for example, 40 per cent of the population lives in cities, but only 20 to 30 per cent have access to formal financing. In urban areas such as in Zimbabwe, Mumbai, India, and Malawi, large scale evictions are leaving urban dwellers without shelter. And in Morocco, 93 per cent of households do not have access to financing.

In addition, housing prices in the developed and developing countries have increased by anywhere from 49 per cent to over 225 per cent over the last seven years, leading to a widening gap between incomes and housing, according to the agency's report, "Financing Urban Shelter: Global Report on Human Settlements 2005."

To meet the urgent needs of urban residents in developing countries, Mrs. Tibaijuka recommended that short-term micro-financing in amounts of $500 to $5,000 be provided for incremental housing additions in preference the more traditional long-term, larger mortgages often provided, which most households in developing countries cannot afford.

The report estimated that meeting the target of improving the housing of urban dwellers will cost on average of $294 billion or $440 per person over the 2005-2020 period.

Reducing slum conditions are part of a programme adopted by the UN Millennium Summit of 2000 to slash a host of socio-economic ills, such as extreme poverty and hunger, all by 2015.