As the cost of housing rises globally, The World takes a look at how different cities around the world are trying to cope. We bring you stories from South Korea, South Africa, Austria and Venezuela, as well as a discussion for a wider perspective with housing research director Penny Gurstein.
The cost of housing is outpacing people’s incomes worldwide. This week, we’ve been looking at different cities around the globe to see how that problem presents itself, and how some places have tried to deal with it, with varying degrees of success.
The World focused on housing initiatives in four different parts of the globe. Click on the segments below to hear the full stories.
South Korea
South Korea’s rental market operates on what’s known as the Jeonse system. You put down a deposit equal to about 50% of the value of the home you’re renting. So, no small investment. But then, you pay no monthly rent and get the Jeonse back when you move out.
In this file photo, the Lotte World Tower is visible on the skyline from a helicopter in Seoul, South Korea, Aug. 14, 2017.Andrew Harnik/AP/File photo
Traditionally, middle and upper-class families gave newlyweds money for their first Jeonse as a wedding gift. But with skyrocketing real estate costs, the system has been out of reach for more and more people. Now, concerns about South Korea’s declining birthrate have prompted a new government intervention. Jason Strother reported the story from Seoul.
Click below to hear the full story:
South Africa
At the dawn of democracy in South Africa over 30 years ago, the country had to right some big wrongs. The Reconstruction and Development Program (RDP) was one such tool, offering government-subsidized, low-cost homes to those who could not previously afford or access them.
Residents milling about as people look at the apartment blocks in Johannesburg, South Africa.Courtesy of Elna Schutz
In their neat little rows of near-identical design, RDP houses are free for the poorest and the most needy. But as Elna Schutz reported from Johannesburg, the RDP hasn’t always worked out as hoped.
Click below to hear the full story:
Austria
House prices and rents have surged by up to 60% across the European Union over the past decade. But one capital is bucking the trend. In Vienna, around two-thirds of residents live in subsidised housing, with rents often less than half those in other major European cities.
The Karl-Marx-Hof, an iconic building in Vienna is a massive social housing complex built in the 1920s during “Red Vienna,” symbolizing the city’s commitment to affordable housing and socialist urban planning.Orla Barry/The World
The Austrian capital’s model has drawn global attention, with delegations visiting each year to study its success. But some experts warn that political shifts, including the rise of the far right, could threaten this long-standing system. The World’s Europe Correspondent Orla Barry reports from Vienna.
Click below to hear the full story:
Venezuela
In most places, housing crises are driven by scarcity. But in Venezuela, years of economic collapse and mass migration left homes empty — and prices in free fall. Now, after a dramatic political shift, the market is heating up again.
Real estate agent Irene Duran poses in front of a housing complex in Caracas, Venezuela.Courtesy of Irene Duran
But this rebound is driven more by expectations than reality — and for most Venezuelans, homeownership remains out of reach. The World’s Tibisay Zea takes a look at a housing market shaped by crisis, uncertainty and hope.
Click below to hear the full story:
For a broader perspective on the housing market around the world, Host Carolyn Beeler spoke with Penny Gurstein, the founding director of the Housing Research Collaborative at the University of British Columbia in Canada, to learn more about how to tackle the rising cost of housing at its root.
Carolyn Beeler: Penny, how would you describe the cost of housing in cities right now?
Penny Gurstein: They’ve far exceeded the average wages of many people, so that it is becoming increasingly unaffordable across the world, really. So, we’re now seeing an unprecedented number of homeless people, of people who are inadequately housed, who are paying far exceeding what they are capable of in terms of rent. So, that’s affecting other things that they need to live on, like food, transportation and other things.
Every housing market is different, but are there common reasons why lots of cities across the globe are having trouble bringing down the cost of housing?
I think the major thing is that housing has now become seen as an asset. It’s not just a place to live. And so, people are seeing this as a way of wealth accumulation, saving for their retirement, being able to pass along to their children. So, those who can get into the market are accumulating and those who can’t are really falling behind.
You’re in Vancouver, British Columbia, which has a reputation for expensive rents and housing costs. What is going on specifically there?
We’ve had a sharp increase in our housing costs, and that’s really affected the ability of people to buy into the market, but it’s also really attracted global capital [and people] see this as a really good place to park their money because it’s growing. They know that housing prices will increase. Now, just recently, we’ve had a downturn so prices are falling. They’re not falling that much, but they are falling, and that is because of some policies that the federal and provincial governments have introduced.
Were those policy changes enacted in order to bring down the cost of housing? And if so, are those potential solutions that could be enacted elsewhere?
Well, they hope so. For one thing, it made it very difficult for people to rent out their units for Airbnb. And that meant there would be more units available in the larger rental market. And generally, the instability in the world is affecting us. The units that were being built in Vancouver were primarily for speculators and global capital. They were these very small units that were really not suitable for families and very expensive.
One very standard response to high housing costs is to build more housing stock, but you recently signed on to a letter to the government of British Columbia urging leaders to think beyond that solution. Why is that? Is it because of this housing-as-asset problem?
What we’re saying is you need the right supply, which is the supply that actually is going to meet the needs of people living and working in communities. And that’s not happening right now. And I alluded to that before, but it goes sort of further than that. In Canada, not so much in Europe, but definitely in North America and the US and Canada, there’s a real lack of tenure neutrality, which means that there are real inequities between homeowners and renters in terms of policies.
So, the policies really emphasize tax breaks and other things for homeowners. They don’t get the same one for renters. And so, there is a real disincentive to be a renter. And what you’re doing is forcing people who may not have the assets to buy, but are trying to buy because they feel this is the only way they can live what is considered a good life.
So I’m curious: our Europe Correspondent, Orla Berry, reported from Vienna recently that it is quite common for people to be lifelong renters there. Do you think that is a better system for housing everyone who needs housing?
Yes, it is. I think it’s good as long as there is a really strong social safety net. So, if there’s good medical, Medicare, and other things that will support people so they don’t have to worry in retirement about taking care of themselves, so, that’s what I see in European countries. And I recognize that that’s being weakened for various reasons again, but that seems to have been, since the Second World War, a real emphasis on building that social safety net for people. And so they didn’t feel a need to buy.
Is there a city that is doing a good job at this, at putting in solutions to bring down the cost of housing?
One of the places that I look at is actually in Asia, in both looking at sort of Hong Kong and Singapore, and that’s not just most recently. Ever since Singapore was formed as a city-state, it has had a housing and development ministry that has been very, very strong because it recognized that you need to treat housing as infrastructure. You needed to treat the housing as a way to stimulate other aspects of the economy.
And that’s exactly what they did in Singapore and also in Hong Kong. So right now, two-thirds of the housing in Hong Kong is in some way publicly owned. And in Singapore, that’s even more, 80%. And so, that has allowed these places to flourish. And so, we don’t really think about that. We don’t think about how housing is fundamental to how people live their lives. If they had safe, secure, affordable housing, then they would feel they’d be able to take risks in starting businesses and doing all of these other things that you need to have a strong economy.
That’s interesting, thinking of it more as a public good and an infrastructure need like roads instead of a private asset.
Yes, and when you think about it, I mean, because Hong Kong and Singapore were both known as sort of little capitalist engines, and you know, that was what helped them grow, was the government subsidies, subsidizing housing.
This interview has been lightly edited and condensed for clarity.
Will you support The World?
The story you just read is not locked behind a paywall because listeners and readers like you generously support our nonprofit newsroom. Now more than ever, we need your help to support our global reporting work and power the future of The World. Can we count on you?
