Habitat III: Housing at the Center but not Real Estate

Published: Tuesday, November 15th, 2016 by Lenora

Habitat III - Quito October 2016UN Habitat had already placed “Housing at the Centre” of the now-adopted New Urban Agenda before Habitat III in Quito. Indeed, the convening in Quito was an important opportunity to bring together participants in the urban housing value chain to improve connections between key players and talk about mutual expectations for how to deal with the housing crises now ubiquitous in the world’s cities.

Many have highlighted the importance of building the entire housing value chain and understanding the whole industry ecosystem in order to address housing crises holistically (read this by Debra Erb of OPIC, this presentation I made at Harvard and this post about the World Bank’s Global Housing Finance Conference). From this broad landscape view, NGOs and community groups, urban planners, designers and architects, academics and consultants and, finally, development finance institutions (DFIs) are all critical market participants. These actors showed up in force at Habitat III.

Because so many key actors did attend Habitat III, the absence of other important participants in housing markets was a missed opportunity. These include real estate developers and investors, private financial institutions, impact investors and social enterprises. By contrast, large multinational corporations had much to share from their corporate engagement and product innovation especially about mobility, infrastructure, energy and other needed urban solutions.

A few shining examples highlighted pioneering work out there to make housing inclusive, sustainable, commercially viable and even, possibly, investable in the future. None of them were direct real estate developers, though all work with the industry:

  • The most ambitious is Reall, which is working develop an investable vehicle for directing capital to its network of early stage community developers.
  • Mexico’s EcoCasa is igniting a green affordable housing movement.
  • Barcelona Housing Systems deployed its innovative technology in a month to erect a four story apartment building made of steel and plastic, most of it recycled (great video below).

Check out a deeper dive on Reall here.

Although not directly focused on housing, the WRI Ross Center on Sustainable Cities, the Citi Foundation and C40 hosted a dialogue about transit oriented development (TOD) as part of its Financing Sustainable Cities Initiative. This was a welcome conversation about “what to invest in, how to pay for it, how to mobilize investment capital, and how to structure contracts and institutional frameworks.” This dialogue was important because TOD also aims at accessible and energy-efficient residential development and can be a powerful tool for cities in partnership with private real estate developers. Another Ross Center event touched on housing policy.

Beyond these, the countless sessions and exhibitors that highlighted public housing projects, academic research and community engagement elevated the conversation about inclusion, policy, land, equity, housing finance, infrastructure, security and even culture.

Given the capital constraints faced by cities and the critical challenge of housing supply, the current and future reality is that real estate developers are and will continue to be deeply involved in delivering affordable housing everywhere. Mission-driven housing enterprises, both for profit and non profit, are increasingly common. Traditional financial structures, like real estate investment trusts (REITs) and private equity, are starting to be leveraged to increase affordable housing supply. Energy and housing entrepreneurs are starting to collaborate, as Barcelona Housing Systems and WeLink illustrate.

UN Habitat and others in the effort to stimulate housing need to proactively reach out and include these key players and their investors to address this very urgent need.