Covid complications

The ongoing pandemic has stressed an already tight housing market, endangering the lives of nearly 2 billion lower-income people worldwide

Habitat for Humanity Thailand is building homes for the least fortunate. Photos Courtesy of Habitat For Humanity Thailand

The health and economic impact of the ongoing Covid-19 pandemic has heightened the housing crisis not just in Thailand but worldwide, amid reports that global poverty is at an all-time high.

In the hope of addressing these and related issues, Habitat for Humanity, a nonprofit organisation that helps people in communities around the world build or rebuild their homes, will organise the 8th Asia-Pacific Housing Forum: Building Forward Better For Inclusive Housing from Dec 7-9.

In a candid interview with Life, Luis Noda, Habitat for Humanity's area vice-president for Asia and the Pacific, shared that among a host of issues to be tabled at the event will be Covid-19's impact on affordable housing, climate change and sustainable recovery.

He noted that as the pandemic continues to have a devastating impact on human life and livelihoods, the urgency for safe, decent and affordable housing has become greater than ever, with UN stats reporting 1.8 billion people, or over 20% of the world population, in need of adequate housing.

The plight of over 1 billion slum dwellers has worsened, Noda noted, further marginalising those in already vulnerable groups that reside in informal settlements scattered around East and Southeast Asia, and Central and South Asia.

"The need is also evident here where the government has [according to news reports] said it will build 1.2 million houses over the next 10 years for those who are relocated from alongside rivers and canals."

Noda named climate change as the biggest driver of risk in the region. He said a record number of climate-related disasters in 2020 affected tens of millions of vulnerable people in the Asia-Pacific region already hammered by the Covid-19 pandemic.

He said it was encouraging to see Thailand's Ministry of Foreign Affairs, which co-organised a session during the 2021 Disaster Resilience Week held by the United Nations Economic and Social Commission for Asia and the Pacific, call for greater coherent policies to address the interlinkages of disaster, health and climate.

"To forge a sustainable recovery pathway after Covid-19, collaboration and innovation are key," Noda said. "Part of a global series organised by Habitat for Humanity, the Asia-Pacific Housing Forum gathers major stakeholders to promote innovations, share promising solutions, and enhance collaboration to improve policies and solutions that enhance access to affordable housing. Since the inaugural conference in 2007, more than 7,200 participants have presented diverse views through insightful plenaries and engaging discussions."

Two of the top experts invited to the forum this year include Maimunah Mohd Sharif, executive director of UN-Habitat, the first Asian woman to serve in this role since 2018.

She began her career as a town planner at the municipal council of Malaysia's Penang Island in 1985, and rose through the ranks to become the director of planning and development.

As mayor of a local authority, she led the municipal council of Seberang Perai in Penang to achieve its vision of a cleaner, greener, safer and healthier place to work and live.

The World Bank's Dao Harrison, a senior housing specialist, has more than 20 years of experience ranging from green‐field market entry assessment to building out extensive businesses in developing markets.

Harrison is well respected for her deep knowledge of multiple countries' housing and mortgage infrastructure, and for her ability to manage through the risks posed by unique characteristics of emerging markets.

A brand new home ready to move in. Habitat For Humanity Thailand

While Sharif will be a keynote speaker at the opening plenary of the Asia-Pacific Housing Forum, Harrison speaks on housing as an economic driver for building a sustainable economy.

Noda said that even prior to the pandemic, Asia and the Pacific reported almost no progress in Sustainable Development Goal 11, which is about "sustainable cities and communities" and is one of 17 Sustainable Development Goals established by the UN.

Covid-19 has worsened substandard living conditions in overcrowded informal settlements whose residents often lack access to quality infrastructure. However, with the right strategy, the issue can be addressed.

"For the 370 million people who live in informal settlements in East and Southeast Asia, a participatory approach to slum upgrading that includes housing improvements and inclusive infrastructure will help ensure that vulnerable groups are not left behind," said Noda.

"This requires intensive and co-ordinated policy responses and investment choices at both national and local levels in partnership with communities."

The Habitat for Humanity executive said conveying the importance of advancing sustainability in the housing sector for vulnerable and marginalised people during the pandemic is imperative as they are the hardest hit.

A happy couple in their new home. Habitat For Humanity Thailand

"As countries emerge from the Covid-19 crisis, the housing sector will be a key driver for economic, social and environmental recovery. The housing sector is a larger-than-expected contributor to a country's gross domestic product. Inclusive financial interventions in the housing sector can stimulate economies while also improving the well-being of families through healthier housing conditions."

Noda said lack of access to finance contributes greatly to the housing gap in Asia and the Pacific.

He noted that low-income families employed in the informal economy often lack the income proof and credit history required to be eligible for a mortgage. As a result, they are denied the improved health and educational opportunities and sense of security associated with safe, adequate housing.

On that, he added that the absence of adequate housing also affects their ability to maintain social distancing, which creates a set of issues in itself.

Furthermore, the gap between demand and supply of affordable housing finance products is huge, estimated at US$16 trillion by McKinsey & Company, which presents a sizeable business and social impact opportunity for financial service providers to develop new housing finance products and services for low-income families.

In a climate of uncertainty, Noda puts his hope in microfinance institutions (MFI) which he says are an essential channel through which low-income households access financing.

"Most MFIs remain focused on income generation or small business loans even though practitioners estimate that 10% to 20% of total microfinance loan disbursements are used for housing. We are seeing more and more traction in this space among MFIs, as they begin incorporating housing products into their business plans as part of portfolio diversification and risk management strategies. Such products also allow them to maintain high social impact standards, as safe and secure housing unlocks various socio-economic outcomes for families that further contribute to their overall well-being.

"Simultaneously, the financial ecosystem is evolving rapidly with the advent of tech-enabled and branchless banking models such as FinTech. In addition to MFIs, new business models and product innovations are taking place to improve access to affordable housing finance and climate-friendly construction materials and technologies. We will have to continuously facilitate the housing ecosystem to test and scale financing models that help people adopt green construction technologies and construct disaster-resilient homes as part of the sustainable development agenda."

While the global housing deficit continues to deepen, with approximately 1.8 billion people around the world still lacking adequate homes, coupled with a no-end-in-sight pandemic, Noda said a better outcome could be expected if the global housing challenge is addressed with people at the centre, especially the most vulnerable, and is implemented through people-public-private partnerships and with a deeper understanding of the entire housing ecosystem.

"For a housing ecosystem to work, both the supply and demand sides of housing value chains need to operate effectively and at scale. We also need all actors -- from governments to the private sector to nongovernmental organisations -- to do their part. Impactful actions include policy and systems change to remove the barriers to adequate housing; increasing the scale and depth of housing finance services; and involving vulnerable and marginalised communities in the design and decision-making process to ensure inclusive and equitable access to housing.

"As countries seek sustainable recovery from Covid-19, it should be highlighted that housing is an economic sector with strong multiplier effects on both employment and consumption. Investment in residential construction, in particular, represents a potential win-win for low- to middle-income countries, as it creates quality jobs while filling a massive void in affordable housing."

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