Housing gap

The affordable housing gap is a socio-economic phenomenon characterized by the scarcity of affordable housing relative to the demand for it. This disparity is linked to social, racial, and economic inequality, and disproportionately affects households with lower incomes. The insufficiency of suitable affordable housing options can lead to negative outcomes for both families and communities.

India
India, as a rapidly developing nation with a burgeoning population and economy, faces a significant challenge in providing adequate housing to its urban residents. According to a report by the National Buildings Organisation (NBO) in 2012, the shortage of housing units in urban areas was estimated to be 18.78 million. The shortfall is particularly acute for households belonging to the Economically Weaker Section (total household income does not exceed 300,000 rupees), with a shortage of 10.55 million units, as well as the Lower Income Group (total household income is between 300,000 and 600,000 rupees), with a shortage of 7.41 million units. The Middle Income Group and above (households with a total annual income exceeding 600,000 rupees) face a shortfall of 0.82 million units.

United Kingdom
The UK National Planning Policy Framework uses the "standard formula" to assess local housing need. The formula uses household growth projections, adjusted for affordability Critics of this method say that it does not account for the present backlog of housing. Households that live in poorly maintained or overcrowded accommodations would not be represented in the standard formula. A 2019 report estimates that 4.75 million households in Great Britain are in need of adequate affordable housing.

In the 2019 general election, both major political parties identified the housing gap as an obstacle for the country, and pledged to increase housing supply. The Parliament has a stated target of 300,000 new homes a year by the mid-2020s.

United States
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The United States Department of Housing and Urban Development (HUD) defines affordable housing as "housing on which the occupant is paying no more than 30 percent of gross income for housing costs, including utilities." HUD uses the terms "cost burdened" and "severely cost burdened" to describe individuals or families that spend more than 30% and 50% of their income on housing costs, respectively. According to the 2020 U.S. census, 46% of American renters are cost burdened, and 23% are severely cost burdened. The affordable housing gap primarily impacts the lower-income households in America. A 2017 HUD survey found that 89% of extremely low income renter households were moderately or severely cost burdened. 83% of very low income households, 54% of low income households, 20% of moderate income households, and 6% of high income households met the same criteria.