In the heated discussion about housing and the housing affordability crisis, it is easy to lose track. What points should we consider when talking about housing? What do we need to raise awareness of? We conversed with global advisor Dr Orna Rosenfeld who told us which (often overlooked) aspects matter most.
From various causes to multiple solutions and even more opinions: the discussion about housing and housing-related issues is complex. In fact, it is so complicated that we sometimes overlook the most important aspects. As a global advisor on housing, an expert in urban development, and a renowned research scientist and author, Dr Orna Rosenfeld changes that. She helped us gain some clarity.
When in Doubt, Ask Orna
When it comes to tackling housing-related challenges, Orna is the person to consult. Her work focuses specifically on the Global North, where she advises international banks and organisations, such as the EU and the UN. Having worked with people from around the world, Orna is familiar with the different thoughts, concerns, and hopes linked to housing. In our interview, she tells us what we need to do to raise awareness.
Advanced Advice from an Adept Advisor
According to Orna, we need to highlight the following five points when talking about housing:
1. Housing Matters
Sometimes the importance of housing is disregarded. If we want to address the housing affordability crisis and other housing-related issues, we need to show that housing is crucial to our cities.
Its relevance becomes evident when looking at the various layers of a city, Orna says. She suggests imagining each part of a city as an individual layer (like in a city masterplan drawing!): there’s a layer for transport and traffic, one for public spaces, such as parks or sports facilities, one for industry, another for shops, and, lastly, there’s a layer for housing. Now, if you mentally “switch off” the layer of housing, not much of the city will be left. Orna highlights that housing makes up a huge part of the surface of our cities.
Also, if there is no housing, and people can’t live in cities, what are the other urban functions there for anyway? As Orna puts it:
“When the housing is abandoned, basically, cities are abandoned because who’s going to use the parks, who’s going to use the theatres, the cinemas, and retail?”
2. Housing Should Not Be Taken for Granted
In the developed countries of the Global North, many people take good housing for granted and don’t spend much time thinking about it. After all, Orna says, most of them grew up having access to good and affordable housing. So, why worry, right? What they often don’t realise, Orna highlights, is that their situation is the result of decades, sometimes centuries of policymaking.
Let’s take the Austrian capital Vienna as an example. Following the Industrial Revolution, the city entered a period of rapid industrialisation with an influx of people seeking work. This led to a deplorable housing situation. To address this issue, Vienna began building social housing and continues to do so up to this day. It is now known for being one of the most liveable cities worldwide, partially due to its large social and affordable housing stock. The City of Vienna owns 220,000 municipal housing units and provides further 200,000 subsidised housing units (in a city of 1.9 million inhabitants).
Just like Vienna did back then, we need to react to new challenges coming our way, like COVID-19 and the digital revolution. We are again at a turning point, Orna says, and need to take action to ensure housing in cities remains affordable. However, action will only be taken if people realise that there is a need to do something. And there clearly is a need.
3. Housing Prices Are Inflated
For Orna, it’s clear that we are no longer talking about an increase in housing prices. We are talking about inflation. She mentions the example of Berlin, where housing prices have increased by 197% over the past ten years. “This is not an increase anymore. This is an inflation of housing prices,” Orna underlines.
And we should treat it as such instead of viewing it as a passing trend. That means regulating the housing market in a way that flexibly responds to trends and challenges. If we fail to do so, the repercussions could be dramatic. Back in the day, it was mainly low-income households struggling to afford accommodation. Today, many middle-income earners also face severe difficulties and can’t keep up with housing prices in big cities like Paris, New York, Moscow, and London. In the future, this problem could affect even high-income households. As Orna puts it: “The rapid housing price increase we have witnessed over the past decade has not been matched by the salary increase in any income group!”
4. Housing Is Unaffordable
It is no surprise that many feel like they cannot keep up with this inflation of housing prices. Orna tells us that it often makes even people with a good income feel vulnerable. Some of them are ashamed that they are no longer able to afford to live in cities. The reason behind this, Orna explains, is that many of us (especially in Europe) were raised with the middle-class motto, “Much effort, much prosperity”. Meaning, if we work hard enough, we will be able to afford a good life – including a decent, reasonably-sized home. Now, what many are thinking is: ‘If I am not able to afford such a home, I am not working hard enough’.
But that’s not true. According to Orna, we need to abandon this way of thinking and focus on solving the housing crisis. She stresses that it is not about our own ability to afford; it’s about the fact that housing is simply becoming unaffordable for an increasing number of income groups. Take this as an example: in 2021, the average price for a flat in Paris was roughly €11,000 per square metre and could rise higher, depending on the district.
“Let’s be clear, the housing price increase we note is not linked to increased quality of the offer in any way. Therefore, the question we should be asking isn’t whether we are able to afford it or not but rather does this all make sense or not? This makes no sense anymore,” Orna underlines and adds:
“I would like to change the discourse from ‘I’m not really sure I would be able to afford it’, to asking ourselves the question, ‘does this price, and this price increase, make any sense?’”
Not being able to keep up with the rapidly increasing prices is not a personal deficiency any more. It’s a sign that we need to take action.
5. Housing Will Impact the Social Cohesion of Cities
We need to act because making living in cities affordable is also crucial to sustaining social cohesion and enabling social mobility. “We are not only talking about the fact that we are feeling feelings that we shouldn’t feel, which are shame and vulnerability. We are actually talking about the long-term cohesion of our cities and the cohesion of our neighbourhoods,” Orna explains.
How come? Many are already struggling to afford to live in cities, with middle-income earners increasingly affected as housing prices rise quicker than salaries do. If we do not act now, the next generation will ultimately be forced out of the neighbourhoods they grew up in due to extortionate prices. Orna highlights:
“Imagine if the housing prices in 10 years have gone up another 150% in cities. What are you going to do? What I’m usually saying to people is: the cost of us doing nothing, at this moment, is basically seeing our children being displaced.”
What Now?
So, how do we solve this mess? Speak up. According to Orna, everybody can make their voice heard. She suggests, for instance, raising awareness on social media by using hashtags like #crazyhousingprice and challenging the status quo.
One thing she notes, however, is that it’s important not to point fingers. The housing affordability crisis is a complex issue, influenced by several factors. This is sometimes overlooked. For instance, investors are frequently considered the sole root of the problem, but Orna highlights: “We must actually engage with the problem, seriously examine all the facets, map all the actors, because we do not only have investors there”. Accusing one person or organisation won’t help us move forward and find long-term solutions to the crisis.
It is also important to have a bit of patience. As an advisor working with international organisations, Orna knows that “sometimes the phenomenon is faster than a policymaking process”. But solutions are underway. Orna mentions that institutions and organisations are increasingly paying attention to the question of housing. Working with them, she notices “a tremendous progress in terms of political attention to the issue” compared to several years ago.
By highlighting the arguments listed above, we might be able to raise even more awareness and bring clarity to the discussion about housing.
Talking About Housing in a Nutshell
In discussions about housing, the following five points need to be raised:
- Without housing, there are no cities.
- Affordable and adequate housing cannot be taken for granted. It requires long-term policy and regulatory attention.
- Housing prices are inflated and should be regulated accordingly.
- As residents, we need to stop blaming ourselves for not being able to afford and actively work towards solving the housing affordability crisis together.
- If we don’t act now, the next generation may see themselves displaced or have their prospect of social mobility seriously hampered.