How Better Housing Could Boost Economic Growth In Latin America

Access to dignified housing could also result in greater access to education, and encourage the enrollment of more than 41 million more children worldwide, according to a study

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Bogotá — Ensuring equitable and adequate access to housing in informal settlements could not only have a direct impact on the economy, but also on better life expectancy and levels of schooling in Latin America, according to a report by Habitat for Humanity.

Making progress in this area can generate a direct impact of up to 10.5% of economic growth, measured as gross domestic product or gross national income per capita, says the document titled Improving Housing in Informal Settlements: Assessing the Impacts in Human Development.

“The resulting increase in the standard of living of informal settlement residents, in aggregate, is likely to exceed the cost of upgrading informal settlements in many countries,” it explains.

In terms of life expectancy, it could be increased by up to 4% globally, adding 2.4 years on average.

According to Habitat for Humanity, more than 730,000 preventable deaths could be avoided annually, a larger number than the global eradication of malaria, the report explains.

Projected years of schooling could also be improved, increasing by as much as 28% in some countries as a result of more access to adequate housing in informal settlements.

Access to decent housing could have an impact on aspects such as access to primary and secondary education, with up to 41.6 million new enrollments globally.

According to the report, this is equivalent to 16.1% of the total number of children and youths currently not receiving formal education.

This means that “providing access to adequate housing in informal settlements could lead to a jump of up to 18 places in the HDI ranking of countries and a change in the level of human development from low to medium or from high to very high”.

In terms of percentage of GDP growth, the Latin American countries that would benefit the most would be Haiti with 10.5%, followed by Colombia, Peru and Guatemala with 8% each.

Bolivia, Honduras and Nicaragua are nexy, with 7% each, as well as Brazil, Mexico and the Dominican Republic, with 6%.

The lowest benefit would be reflected in Argentina, with an estimated 3% GDP growth.

It is estimated that more than half of the 1.8 billion people worldwide who currently lack adequate housing live in informal settlements.

Policies recommended for increasing access to adequate housing:

  • Prioritize housing as a lever for equitable human development by alleviating poverty, improving development outcomes, generating economic growth, and caring for the environment
  • Adopt a holistic approach to housing interventions in informal settlements, including secure tenure, basic services, climate resilience, and empowered resident participation
  • Elevate informal settlement upgrading as a means to achieve international development and transformation
  • Prioritize knowledge and data by, about and for informal settlement communities in ways that connect data to decision making