Is their Housing Crisis near you? Why is there a housing shortage? Housing is one of the necessities for any human being. People are struggling now to get shelter over their heads. The last time the housing crisis occurred was after the Second World War. The reason was obvious back then. This time the reasons are parallel.
The World Bank estimates that the housing crisis could impact 1.6 billion people by 2025. Shortage of land, labor, material, and money are the root causes of the housing crisis. A study of 200 cities worldwide showed that 90% of them were unaffordable to live in, with the average home costing more than three times the average wage.
“We’re seeing a shortage, or housing underproduction, in all corners of the U.S.,” says Mike Kingsella, the CEO of Up for Growth. “America’s 3.8 million homes are short of meeting housing needs,” he says. “And that’s both rental housing and ownership.” The housing crisis is not limited to the U.S. only; it has been a global issue.
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What is causing the Housing Shortage?
The great recession hit in 2008 when 10 million people lost their homes. Their houses were confiscated, and home prices dropped by 33%. The market took ten years to recover slowly, and the prices increased by 50%. The market is now shifted to making big and expensive houses. This leads to a condition called “Missing Middle,” a shortage of entry-level and mid-level housing, including cottage housing, townhomes, garden apartments, duplexes, and smaller single-family homes.
People are unable to afford housing in this modern era. A growing population is another reason for that. The demand is higher than the supply, causing the housing shortage. Building or renting a house is a bit expensive for middle-class people. One can not afford a nice home even after selling the old one at the same rate.
Why Building materials are out of stock?
According to NAHB, more than 90% of builders reported delays and material shortages in 2021. “Shortages of materials are now more widespread than at any time since NAHB began tracking the issue in the 1990s, with more than 90% of builders reporting shortages of appliances, framing lumber and oriented strand board,” NAHB researchers wrote.
Even if people can get the material, it is too expensive, creating a hole in their pockets. Shortage of building materials is leading to a rise in its prices, eventually affecting the cost of building houses.
How are people and the Government tackling the situation?
The rising housing costs are causing people to spend less on other essential things like groceries, education, bills, and many more. The housing crisis is an upshot of homelessness. Housing affordability issues are forcing low-income workers to commute further to their workplaces, “requiring long and costly commutes and reducing productivity,” Moody’s Analytics says in its study.
By 2030, there will be 3 billion people who need access to decent housing, meaning that 96,000 new affordable homes must be built daily, UN-Habitat says. The organization says that its advice has helped over 43 countries improve their housing policies.
Several initiatives by UN-Habitat include prefabricated panels made from waste material, 3D-printed homes, urban planning, and a successful supply of affordable housing.
Due to certain reasons, we mentioned, the housing shortage happened in a few developing countries such as the USA, Canada, New Zealand, Uk and many more big cities worldwide.