Up to 10.5% increase in GDP possible in some countries

MANILA (May 16, 2023) – Improving housing at a large scale in slums and other informal settlements can have substantial economic and human development gains, according to a first-of-its kind report released by Habitat for Humanity and its research partner, the International Institute for Environment and Development, or IIED. The report supports the launch of Habitat for Humanity’s five-year campaign, Home Equals, seeking policy changes at the local, national and global levels to increase equitable access to adequate housing in informal settlements.

“The Asia-Pacific region is home to the largest concentration of people experiencing urban poverty, with one third of urban dwellers living in informal settlements or slum-like conditions. The number will only grow bigger and the need for adequate housing more urgent as urbanization continues, driven by internal rural-to-urban migration—particularly of people from poorer backgrounds seeking economic opportunities in cities,” said Luis Noda, vice-president for Asia-Pacific, Habitat for Humanity International.

The report found that gross domestic product and income per capita could increase by as much as 10.5% in some countries. The resulting increase in living standards among residents of informal settlements, taken as a whole, is likely to exceed the cost of improving informal settlements in many countries.

Other startling findings include:

• an increase of up to 4% in life expectancy in some countries around the world, adding an average of 2.4 years of life;
• more than 730,000 preventable deaths could be avoided annually—more than could be saved by eradicating malaria globally; and
• an increase of as much as 28% in the expected years of schooling in some countries.

The report used a unique modeling methodology, which combines a review of more than 130 articles and reports with 72 indicators across 102 low- and middle-income countries. The model could not generate projections for specific countries on their own, so the researchers grouped countries into four typologies. Assuming the impacts in a country reflect those of the country type it is most similar to, improving housing in informal settlements in some Asia-Pacific countries could result in:

• an increase in GDP of up to 7.25% in countries such as Bangladesh, by as much as 3.3% in countries such as Fiji, and up to 10.5% in countries such as Myanmar;
• an increase in life expectancy rate of up to 1.7% in countries such as Cambodia and Nepal, and as much as 1.2% in countries such as Thailand; and
• up to a one-year increase in the mean years of schooling for countries such as India and Indonesia, and 1.35 years in countries such as the Philippines.  

At the global level, Habitat for Humanity is calling on G7 member states — set to meet this weekend in Hiroshima, Japan — to recognize housing as a critical lever for development progress and commit to addressing housing needs in informal settlements as a way to advance international development priorities in areas such as economic growth, health and education.

Noda added, “The report provides empirical evidence that adequate housing is a powerful catalyst for well-being and sustainability. It makes clear that we must invest intentionally to ensure that residents of informal settlements have access to adequate housing. As Habitat for Humanity launches the Home Equals campaign, we are eager to work hand-in-hand with residents of informal settlements, civil society organizations, local and national governments, and other stakeholders to improve, through policy change, the lives of 15 million people living in informal settlements.”

More than half of Habitat’s network, including 11 entities based in the Asia-Pacific, are working actively on the campaign. Habitat Australia will advocate with the government to adopt policies aimed at addressing the lack of adequate housing for informal settlement dwellers across the region. In Nepal, Habitat will work to integrate policies and guidelines so residents of informal settlements can equitably access land rights through an information campaign, dialogue between the local government and families and the establishment of a land support service center. Habitat Indonesia will help local governments identify funding resources to implement rehabilitation programs for inhabitable housing, to build new houses and explore funding mechanisms between governments and NGOs for housing programming. In Vietnam, Habitat will work with local partners to implement sustainable policy solutions that will enable Vietnamese returnees from Cambodia to have a secure home.