The Challenge

Over 2 billion people will move to cities by 2030, and most of them will live in slums.

Rapid urbanization of the Global South brings the issue of quality, affordable housing to the forefront of global concerns today. Chronically underperforming housing systems cannot keep up with the demand, driven by the pace of household formation, obsolescence of buildings, and land scarcity.

In many cities around the world, these housing shortages are addressed by the informal sector, leading to the proliferation of slums in and around the formal city. Residents of slums often live in overcrowded, unsanitary, and dangerous conditions. They live under the perpetual threat of eviction, overlooked by public authorities and private investors.

Favelas in Belo Horizonte, Brazil

Affordable housing is key to the ability of developing nations to grow and thrive over the long term. Housing is essential national urban infrastructure. In the modern world, there is no enduring national wealth without jobs; and there are no jobs without housing, because housing is where jobs go to sleep at night. Housing is the basis on which people can improve their lives, and where the next generation of leaders are born and raised.

Affordable housing means secure access to a safe, decent home that is close to cheap transportation and jobs. Making housing affordable does not mean giving people a free house. It means making a decent home – to buy or to rent – accessible to all people within their means.

However, affordable housing, especially in urban areas, does simply come about. Under normal market conditions, affordable housing is almost always crowded out by more profitable uses of land, such as luxury high-rises or office buildings. Affordable housing is thus the result of a complex system of relationships, actions, and results between:

  1. Governments, that often want to provide affordable housing for their citizens, but either do not have the resources or do not know how to provide quality housing efficiently;
  2. Real estate developers, that may know how to build affordable housing, but don't know how to yield good returns by doing it;
  3. Banks, that know how to finance market-rate homes, but not affordable ones;
  4. NGOs, that provide housing to underserved populations, but don't know how to do it in a way that is sustainable both in implementation (we can't give everyone a house) and in practice (gifting a house doesn't mean that the people who receive it will be able to maintain or keep it).

Affordable housing requires ongoing intervention and collaboration between these actors. However, in many housing systems around the world, these processes are often disjointed and broken. The field urgently needs more research, funding, and innovation.

At AHI, we believe in fixing these systems. We believe in turning slums into assets, and we are committed to transforming the lives of the global urban poor.

To learn about how we do this, please see Our Approach.