Housing affordability has become an increasingly urgent global issue, driven by factors such as inflation, rising living expenses, increased construction costs, rising energy prices, and deepening socio-economic inequalities. Urbanization further intensifies these challenges (Doorn, Arnold, & Rapoport, 2019, p. 5), with 56% of the world’s population living in urban areas as of 2022 (World Bank). This trend is expected to accelerate, adding 2.5 billion people to urban areas by 2050, with nearly seven in ten people living in cities (UN DESA). In many OECD countries, households with low incomes face severe affordability challenges, often spending more than 40% of their disposable income on housing (OECD Affordable Housing Database). This housing burden places significant financial strain on these households and increases the risk of homelessness, highlighting the need for targeted and inclusive solutions (OECD Report on Housing Costs).
Pioneers of the Malmö Commitment on Inclusive and Equitable Communities are actively working to address the complex challenges of housing affordability, equity, and sustainability through innovative initiatives. During a recent pioneers’ exchange, representatives shared their strategies, highlighting both barriers and solutions to support local populations. These insights provide valuable lessons for cities and regions worldwide.
Shared challenges
Municipalities in many regions are under increasing strain to address challenges related to housing affordability due to reduced state funding, rising demand as well as increasing construction costs and material supply issues. These challenges have intensified the pressure on local governments to develop innovative solutions to meet growing housing demands.
Economic pressures
Economic pressures, particularly inflation, have created significant financial challenges for municipalities. Inflation erodes the real value of municipal revenues, as highlighted in the National League of Cities report, which notes a steady decline in the purchasing power of city budgets despite increased tax collections. This strain is further intensified by reduced state funding, leaving municipalities with limited resources to address critical housing needs. For example, in Finland, the withdrawal of funding from Ara, the Housing Finance and Development Centre of Finland, has placed greater financial responsibility on cities like Turku to sustain housing production. Similarly, in Sweden, cities like Malmö must navigate shrinking state support while managing the compounded effects of inflation on their budgets.
Economic segregation
Economic segregation, meanwhile, reflects disparities in how different communities experience access to housing and resources, often deepening inequality. In Malmö, young residents, households with low incomes, and immigrant communities face limited options, while in Turku, the rising cost of living disproportionately affects the elderly, students and immigrants. In Pittsburgh, Pennsylvania, USA, displacement driven by economic segregation has significantly impacted households with low to moderate incomes (LMI) and black families, emphasizing the need for inclusive housing policies to address these systemic inequalities.
Housing stock and accessibility
Housing stock and accessibility challenges vary widely across cities, shaped by local contexts. In Porto Alegre, Brazil, irregular settlements and underused urban spaces highlight the need for revitalization and sustainable planning to address inadequate living conditions. Similarly, Makati, Philippines, faces constraints from its limited land area, which has led to overcrowding and informal settlement. In Manizales, Colombia, housing deficits are particularly stark in rural areas, where 67.4% of households lack adequate housing compared to 13.3% in urban areas, emphasizing the need for equitable solutions across the region. Newcastle, Australia, faces a different set of challenges, marked by a shortage in affordable and social housing, with 31% of renters experiencing severe financial strain. This highlights the importance of targeted interventions to support residents most affected by housing stress.
Innovative housing strategies from Malmö Commitment Pioneers
The pioneer cities of the Malmö Commitment have adopted different strategies to address housing affordability challenges in their local contexts. These approaches reflect the unique needs and priorities of each city, showcasing how content-specific solutions can create meaningful impacts. Malmö, Makati, Glasgow and Porto Alegre demonstrate how municipalities can use transformative housing policies to support their communities.
Malmö: Comprehensive strategy to address housing affordability
Malmö addresses housing affordability through several policies and tools designed to address the city’s specific challenges. These include working with a public housing company and housing agency on one hand, and on the other hand utilizing their land policy right and municipal planning monopoly.
The City of Malmö’s current Housing Supply Program has two key goals: expanding access to adequate housing for low-income households and promoting diverse housing developments across the city that accommodate population growth and reflect the financial capacities of different demographic groups. The program is based on statistics on demographics and population growth, income levels, and the existing housing stock.
A central element of Malmö’s strategy is its public housing company, which offers a range of housing options designed to serve households across different income levels and circumstances. Unlike in many other countries, Swedish public housing is not exclusively for low-income households. Instead, it is available to a broader section of the population, promoting social integration and a mix of different income groups within the same housing areas.
The city of Malmö also employs strategic land policies to influence housing development. The municipal land allocation policy contains overall goals and guidelines that should act as a guide when establishing or handing over land instructions on municipal land. The purpose of the policy is to promote a high rate of production that meets population growth in the city, create more opportunities for housing at reasonable costs and reduce homelessness. By guiding land use and determining housing proportions, Malmö ensures that new projects include a balanced mix of housing types to meet diverse needs. The municipal planning monopoly further supports this effort, granting the city the authority to regulate building rights and oversee the allocation of land for housing.
Finally, Malmö’s housing agency facilitates access to available properties by matching home seekers to housing options that align with their specific needs. It aims to create an efficient rental market, promote housing supply, and facilitate entry into the housing market.
Makati: Approaches to address overcrowding and support housing access
To address overcrowding and informality, Makati implemented a Comprehensive Shelter Plan focused on in-city housing and resettlement sites. Among these, Makati Homes 1 provided affordable rental housing exclusively for government employees, while Makati Homes 2 was open to all residents, making it accessible to households with low to middle incomes. Rental rates for both projects ranged from PHP 2,928 to PHP 6,000 (around 50 to 104 USD) per month, ensuring affordability for a wide range of residents
The Coryville housing project was a one-time initiative that enabled informal settlers to transition to homeownership through the Community Mortgage Program (CMP). This program offered flexible payment terms based on residents’ income and age, with monthly contributions starting as low as 900 PHP (around 15 USD). This initiative highlighted how targeted policies and collaborations can help to provide permanent housing for communities in need. The Comprehensive Shelter Plan also addressed the requirement for significant land allocation, estimating 187 hectares required to accommodate existing housing needs and future demand due to population growth.
Glasgow: Community-led housing and energy retrofits
Glasgow, Scotland, UK, has implemented a governance shift, transferring significant housing stock to community housing associations. This transition empowers community-led initiatives, ensuring housing decisions reflect local priorities and needs.
The city has made notable progress through policies such as the Affordable Housing Supply Programme, which has contributed to the delivery of over 21,000 homes since 2003, supported by a long-term investment of £1.69 billion (2.14 billion USD). The Home Energy Retrofit Programme has enhanced energy efficiency in existing homes, reducing costs and improving affordability. Additionally, the Empty Homes Strategy has brought 1,700 vacant properties back into use, strengthening the city’s affordable housing supply.
Porto Alegre: Housing security through regularization and strategic subsidies
Porto Alegre addresses housing challenges through a diverse set of initiatives tailored to the city’s needs. Together, these tools aim to enhance housing accessibility, improve living conditions, and promote equity.
A key element of Porto Alegre’s strategy is the Regularização Fundiária program, which focuses on formalizing land tenure for families in irregular settlements. This process includes feasibility studies, environmental assessments, community-approved projects, and infrastructure upgrades, ensuring that families gain legal ownership of their land while benefiting from improved living conditions.
The city’s efforts also extend to improving existing housing conditions through the Morar Melhor program, which provides up to R$ 18,000 (3,015 USD) per unit for renovations. This initiative focuses on households in areas undergoing regularization to enhance safety and habitability. Temporary housing stability is addressed through the Aluguel Social program, which offers rental subsidies to families affected by risk conditions, infrastructure projects, or land regularization, ensuring they have secure accommodations during transitional periods.
Porto Alegre further supports housing access with its Bônus-Moradia initiative, providing financial assistance of R$ 113,280.14 (18,974.42 USD) to families to secure permanent homes. The city’s Reassentamento Habitacional program addresses the needs of families displaced from high-risk areas, resettling them into safer communities such as Residencial Nova Chocolatão and Porto Novo Housing Complex. These communities are equipped with essential services, infrastructure, and opportunities, reflecting Porto Alegre’s commitment to holistic urban development.
Broader lessons and collaborative approaches
Despite operating in diverse contexts, Malmö Commitment Pioneers are united by their commitment to equity, sustainability, and innovative governance. A key takeaway from their efforts is the importance of developing robust, context-sensitive indicators to measure progress in housing affordability and inclusivity.
To ensure sustainable housing options are prioritized for all parts of the population, these indicators reflect the specific needs of diverse target groups, accounting for socioeconomic backgrounds, geographic disparities, and other contextual factors. By implementing targeted and relevant metrics, cities can more effectively evaluate their strategies, track outcomes, and share knowledge to learn from one another’s successes and challenges. The Malmö Commitment pioneers encourage other local and regional governments to join the network, share their strategic policies to address housing affordability, and work together in prioritizing safe, affordable and permanent housing solutions for all parts of their local populations.
*References:
Doorn, Lisette & Arnold, Amanprit & Rapoport, Elizabeth. (2019). In the Age of Cities: The Impact of Urbanisation on House Prices and Affordability. 10.1007/978-3-030-11674-3_1.
