The lack of formal housing is the defining problem for the world's growing cities

 
 
 
 
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The lack of formal housing is the defining problem for the world’s megacities and growing mid-sized cities which together account for the majority of global GDP.  This problem threatens not only the health and wellbeing of residents, but also the health of the planet, and it could stall the incredible economic growth that has been generated with rapid urbanization.

 
 
 
 

US$64 Billion

NEEDED IN INVESTMENT TO CLOSE HOUSING GAP

6 Million

FORMAL HOMES LACKING IN REGION

 
 
Informal housing outside of Trujillo, Peru.

Informal housing outside of Trujillo, Peru.

 
 
 
 
Informal housing in the Dominican Republic, bordering SBC’s project, Pablo Mella.

Informal housing in the Dominican Republic, bordering SBC’s project, Pablo Mella.

SBC project Caminos de Sie North of Bogota, Colombia.

SBC project Caminos de Sie North of Bogota, Colombia.

250,000

INDIVIDUALS MOVING FROM INFORMAL TO FORMAL HOUSING THROUGH SBC PROJECTS

At SBC we are focused not only on the construction of housing units for low and middle income families, but also on building those housing units into communities.

The motive here is to make our projects more attractive places to live and worthwhile to the broader community - which should also have the impact of a positive increase in sales pace and, ultimately, investor returns.

We have partnered with Unicef to analyze the impact of our projects and increase that impact, wherever possible.

 
 
 
Existing informal housing in the Ica Region of Peru, lacking in basic services, relatively expensive for low-income workers to rent or buy.

Existing informal housing in the Ica Region of Peru, lacking in basic services, relatively expensive for low-income workers to rent or buy.

SBC project Piedras de Buena Vista in Ica, Peru. A couple can buy a home here with running water and security on a minimum wage salary.

SBC project Piedras de Buena Vista in Ica, Peru. A couple can buy a home here with running water and security on a minimum wage salary.

 

A DEEP DIVE INTO THE LATIN AMERICAN FORMAL HOUSING DEFICIT

In our target markets alone, there is a deficit of over six million formal homes.  To close this housing gap, the amount needed is conservatively estimated in the range of 7-8% of GDP, or about US$40-45 billion of investment.


34 million urban families in the region lack one or more of the following aspects that residents of developed countries take for granted: formal title to their property, proper water or sewage or adequate flooring or sufficient space for all family members.


There are many ideas on how to solve the problem, but there is one consensus among development economists – better housing generates externalities beyond its original borders probably more so than almost any other single public policy. 
 

 
 
 

MANY PUBLIC AND PRIVATE PARTNERS ARE REQUIRED TO BEGIN SOLVING THIS GLOBAL HOUSING PROBLEM.

Poverty is often a trap from which it is hard to break out from and the lack of decent housing is a significant barrier to social development, improved education, skills and ultimately economic growth and development.

Solving the problem affordable and accessible housing is a huge step towards breaking this poverty trap.  “Housing” in this sense is almost the perfect public and private good.  A wider provision of low and middle-income housing provide higher incomes, better health outcomes, less risk of disease, crime and so on to the owners, while at the same time also providing externalities to the wider public sector – higher tax revenues, less need for external resources from health and police services, better productivity and environmental improvements.

We have partnered with Unicef to analyze the impact of our projects and increase that impact, wherever possible.