The McKinsey Report

In 2014, the McKinsey Global Initiative published one of the most comprehensive studies regarding the global affordable housing challenge. The report was entitled “A blueprint for addressing the global affordable housing challenge.”

Here are some of the highlights of the report:

  • About 1.6 billion people could occupy crowded, inadequate, unsafe housing and be financially stretched by the year 2025, based on current trends.
  • The housing affordability gap is equivalent to $650 billion per year, or 1 percent of global GDP. In some of the least affordable cities, the gap exceeds 10 percent of local GDP.
  • To replace today’s substandard housing and build additional units needed by 2025 would require an investment of $9 trillion to $11 trillion for construction; with land, the total cost could be $16 trillion. Of this, $1 trillion to $3 trillion may have to come from public funding.
  • We identify four ways to reduce the cost of delivering affordable housing by 20 to 50 percent: unlock land at the right location (the most important lever), reduce construction costs through value engineering and industrial approaches, increase operations and maintenance efficiency, and reduce financing costs for buyers and developers.

Needless to say, the McKinsey report clearly established the over whelming enormous economic size of the problems and opportunities within the Affordable Housing Industry.

 

©2019 Affordable Housing Collaborative, LLC

Log in with your credentials

Forgot your details?