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The UN-Habitat report 'Unlocking the Potential of Cities: Financing Sustainable Urban Development' has highlighted the annual requirement of about $3-4tn to tackle the global building deficit.
The report emphasizes the scarcity of suitable land and the high value of land.
It also estimates that approximately 28.25 million new housing units per year are needed to address the housing shortage.
To meet the targets set by SDG11, an annual investment of about $3-4 trillion is necessary to ensure adequate housing for all.
Furthermore, significant funds will also be needed for the maintenance and improvement of the existing housing stock.
According to the report, owing to rapid urbanisation, the gap in investments is growing, and social and demographic changes are leading to a greater demand for housing.
The Report said: “People are living longer, and choosing to marry later, and in recent years, there has been a rise in the number of single-parent families.
"The result is an ever-larger number of smaller households, all requiring accommodation. However, building new, affordable homes in urban areas is difficult. Land values are very high and suitable land is in short supply.
“Increase in costs of construction, labour shortages, commodity price including supply chain bottlenecks also contribute to the difficulty for the provision of affordable housing.”
UN-Habitat estimated that about 830 million people were living in slums in the world, and considering another 2 billion additional urban population by 2030, about 3 billion people, or 40 per cent of the world’s population in 2030, would need new housing.
It added, “According to a study of 130 countries by Pew Research Centre in 2020, the average household size in the world is 4.9 persons, while it is 6.9 persons in Sub-Sahara Africa, 6.2 persons in the Middle East and North Africa, and 5 persons in Asia Pacific, and 4.6 persons in Latin America and Caribbean, 3.3 persons in North America.
The need for 565 million new housing units in Europe is estimated due to the population growth of 3.1 persons. This translates to a requirement of 28.25 million housing units annually from 2011 to 2030, equivalent to 77,397 units per day or 3,234 units per hour.
The challenge of meeting this need is compounded by the cost-of-living crisis in developed countries and the expansion of informal settlements in developing countries, leading to a lack of financial resources at the city level.
This infrastructure investment gap is not limited to developing countries but is a global issue, with estimates indicating a gap of $1.1tn to $1.5tn in developing countries and significant gaps in the Asia Pacific, Latin America, and Africa. Fragile African states specifically require more than 37% of GDP to be invested in infrastructure.
According to the Organisation for Economic Cooperation and Development, there is an estimated global need for infrastructure investment of between USD30tn to $40tn in the next 20 years.
The developing world is especially affected by the infrastructure challenge, with a significant portion of the population lacking access to essential infrastructure.
The World Bank's estimates reveal that 1.1 billion people live without a safe water supply, 1.6 billion people lack access to electricity, 2.4 billion people do not have sanitation services, and over 1 billion people do not have access to basic roads.
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