UN Undersecretary-General: “Supply and demand are not sufficient to guarantee housing affordability”

UN Undersecretary-General Joan Clos (left) meets with the author (right) at the COP21 climate conference in Paris. To his right are Louise Belfrage of Ax:son Johnson Foundation, and Raf Tuts of UN-Habitat.

The former chair of the UN’s Habitat III conference says, “If you leave the market alone, it’s going to be a spiral of prices.” 

Joan Clos, former Mayor of Barcelona and now head of UN-Habitat, has weighed in on the growing housing affordability crisis, now a global problem.  In an interview in Metropolis magazine he pointed to the need to address economic factors, and to target the financial mechanisms necessary — especially above the local level.  (For Oregon, this would presumably include the State.)

Clos chaired the recently concluded UN Habitat III conference, which produced an outcome document known as the “New Urban Agenda.”  The document was adopted by consensus by all 193 member states of the United Nations, including the US.

In the interview, Clos was asked what was required to meet the affordable housing crisis.  He replied:

“Successful affordable housing policies are always an outcome of a good coordination between a national housing policy and then local implementation. You need a strong national housing policy, which can help to develop financial mechanisms for addressing affordability, because affordability cannot be guaranteed only by the market. Supply and demand are not sufficient to guarantee affordability, especially in successful cities. If you leave the market alone, it’s going to be a spiral of prices.

“Strong affordability policies have two components. One is income redistribution, usually paid for by the redistribution funds of the budget, which are usually national funds. Then you need another component, which is the local design of the solution. How do you make sure that there are no gated communities, that they are not segregated, that there are no massive poor housing schemes, these kinds of things?

“These are mostly in the hands of local authorities. In order to be successful, you need a good relationship between both. This is the difficulty, because in many places you can have a very committed local authority that puts affordable housing at the center. But if you don’t have the financial mechanisms to support that, it’s not going to work.”

Read the full article here.