The global housing crisis, particularly acute in emerging markets, demands innovative solutions to provide affordable homes to millions. In this article, The World Bank sheds light on this daunting challenge, emphasizing the urgent need for sustainable approaches. The appropriate question here is why major institutions still rely on manual processes when technology can revolutionize accountability and efficiency across the housing sector.
The statistics are sobering**: c**urrently, 1.2 billion people live in substandard housing. By 2030, this number is expected to rise to 3 billion, underscoring the critical need for action. Shockingly, 93% of adults lack access to formal housing finance. The financial gap to bridge this crisis is staggering, estimated at $650 billion annually. While this crisis looms large, the article offers hope through innovative strategies and collaborations.
One standout solution highlighted is the International Development Association's (IDA) Private Sector Window (PSW). To kickstart private sector investment in developing countries, the PSW blends concessional funds with private investments, reducing risks and uncertainties that often deter investors. The PSW's role in leveraging funds for affordable housing initiatives, among other development areas, is invaluable. By mobilizing an approximate $4-6 billion additional private sector investment by 2020, the PSW became a catalyst for change.
By offering cost-effective local currency financing through the PSW, the IFC aims to extend the tenor of bonds, making mortgages more affordable and sustainable. Similar projects are underway in Bangladesh and East Africa. Construction costs also pose a challenge, particularly in Africa where costs are up to three times higher than in India or China.
The IFC's commitment to affordable housing is matched by its dedication to environmentally friendly solutions. The PSW's support in boosting the adoption of energy-efficient building materials could reshape the industry, lowering production costs and fostering demand for greener alternatives.
How will we make homes affordable by leveraging technology to transform the sector? The iBUILD Platform-as-a-Service stands as an exemplar of this transformation. Digitizing the housing value chain, it ensures transparency and accountability, paving the way for more homes of higher quality at a faster pace. As the affordable housing crisis deepens, collaboration and the adoption of advanced tools and technologies are paramount. By collectively embracing these solutions, we can build a brighter future for millions, one home at a time.