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Two boys on a bike in new housing development in Malawi

Photo: Reall

Could affordable homes deliver the SDGs?

12 March 2019
Author: Ian Shapiro

The Sustainable Development Goals (SDGs) are a shared blueprint for achieving a more equitable and sustainable future for our planet and people. With the 2030 deadline on the horizon, could placing affordable homes at the centre deliver the SDGs? Homes stimulate economic and social impacts that range far beyond putting decent roofs over people’s heads and could be the catalyst for many of the Goals.

Don’t take my word for it. The London School of Hygiene and Tropical Medicine studied the effects of their sanitation, hygiene and infant nutrition project and concluded that the socio-economic status of the recipients made marginal differences to outcomes. Likewise, the project interventions themselves, while worthwhile, did not get the desired change. What did? Living in a higher standard home.

There are 900 million people living in informal settlements. 1.5 billion without secure shelter. This is a colossal challenge but also an incredible opportunity.

Reall (previously Homeless International) has been working for 30 years to demonstrate a commercially viable solution for people living on low incomes. Our financial model allows funds to be reused and recycled to help the next community and the one after that. Reall’s mission is to build an affordable homes movement that improves the life chances of 100 million people in urban Africa and Asia by 2030. 

This is not a narrow response to SDG 11, "Sustainable Cites and Communities". This is a recognition that affordable homes can be a development catalyst and offer a compelling sustainable solution to many of the challenges posed by the SDGs. 

Every hour 86 more people call the Nigerian city of Lagos home. Every hour. 

Urbanisation rates across Africa and Asia are accelerating at pace.

Our track record shows that deploying long-term capital can de-risk investments. Providing the opportunity for people to own an asset and gain access to formal finance mechanisms can break the cycle of poverty. The repayment rates are high. I’ve just come back from Nepal where our work has introduced thousands of vulnerable people to home loans with the lowest default rates of the bank’s entire suite of products.

A family with a safe and secure home cuts right to the root of poverty. Whereas a vaccine can cure an illness, the WHO evidence shows that a decent home can reduce the spread of disease. Likewise, UN Habitat has shown that integrating water and sanitation solutions with the design of communities is an effective and sustainable way of securing services. 

The benefits are visible through decent work and economic growth. Greater entrepreneurial opportunities and job security become a reality for homeowners. Earthscan highlights broader impacts on the local job markets, supply chains and growth. McKinsey’s modelling identifies five jobs indirectly created for each home built. Reall’s early findings suggest this figure may be higher for affordable homes.

Housing’s carbon footprint and environmental impact can be greatly reduced by formalised settlement planning, maximising the use of land and using appropriate materials to make service delivery efficient.  

Decent homes ensure that girls can attend school and no longer need to travel for miles to provide clean water for their family. Safer neighbourhoods greatly reduced instances of sexual assault and provide a more comfortable environment in which to experience menstruation. 

All this with an approach targeted at the bottom of the income pyramid with a commercially viable model that will graduate from aid financing. We want to crowd-in others to improve the offer and push us further. 

We can’t build the 300 million affordable homes needed. But with your help we could get them built. We’d love to hear from people who want to explore innovation, share evidence and collaborate.

About the author

Ian Shapiro
Reall

Ian has been the CEO of Reall since 2018. He was previously chief strategy officer for Crown Agents and has worked in various roles at DFID and in NGOs.