As well-housed nations go, the United States has few peers. Yet there are lessons this country could learn from other parts of the globe, said researchers for the World Bank and United Nations.
That is one message emerging from a recently released collection of comparative housing data from 52 countries as represented by a major city in each, often the capital.
The researchers have identified nearly 40 different housing indicators to assess a country’s shelter conditions, including information on housing prices, quality, finance and production.
“Needless to say, we are a well-housed nation compared to other countries and we are getting increasingly well-housed over time,” said World Bank economist Stephen K. Mayo, who heads the housing indicators project.
But things have been better.
Historically, U.S. home buyers-based on the experiences of Washington, D.C., area residents-could purchase a house with two years of earnings, Mayo said. In 1990, the year for which the indicators data was collected, buyers spent the equivalent of four years’ worth of income.
The most affordable deals in 1990 were found in developing countries such as Kenya, Malawi, Tanzania and Pakistan, where less than two years’ wages can still purchase the typical home.
At the other extreme, residents of Beijing, China, must toil for nearly 15 years to cover the cost of a typical home. In Poland, the standard home purchase in Warsaw requires nearly 12 years of income.
In most of the European cities, the typical housing expenditure consumes four to six years of income.
U.S. residents also live in more spacious quarters than any other country, with 742 square feet per person. Australians come in second with 549 square feet of elbow room, followed by Norway, Sweden and Canada.
The most crowded conditions are found in countries such as Bangladesh, Tanzania, Madagascar, Kenya and Morocco, all with 65 square feet or less of livable space per capita.
Japan beats the United States on many economic fronts, but not housing. The typical Tokyo dwelling unit provides only 172 square feet of space per person, yet takes 11.5 years worth of income to buy.
“Everybody is used to thinking that the Japanese have it so much better than us, but housing is one area where economic growth has not translated into improved conditions over time,” Mayo said.
Despite the success of the United States in meeting much of its shelter needs, the country could still pick up pointers from elsewhere, Mayo said, including how to better cope with its inner city housing problems from the developing countries.
Ganti L. Rao, director of the North American office of the U.N. Center for Human Settlements in New York, said he recommends looking to the native countries of the immigrants that are winding up homeless in U.S. inner cities.
“Even with all good intentions, local authorities are totally insensitive to the cultural differences” of people arriving here from the Caribbean, Central America and Asia, Rao said.
The United States might also do well to emulate the less exacting housing standards of developing countries for its poorer neighborhoods, said William C. Apgar Jr., director of the Harvard Joint Center for Housing Studies.
The high costs of complying with this country’s building codes and zoning requirements, Apgar said, often means “you cannot build a home for less than $100,000, unlike housing in Asian countries, which are obviously not the poorer for it.”
Another lesson may be contained in a cautionary tale from the United Kingdom.
A liberalization of the banking rules in the early 1980s encouraged Britons to borrow heavily against the equity in their homes, Mayo said.
The personal savings rate plummeted and the country’s balance of payments deteriorated as households purchased imported goods rather than investing the equity back in their homes as improvements. The resulting financial pressures in turn drove interest rates up.
The United Kingdom’s unhappy experience with housing finance policy is a “potentially very powerful metaphor” for this country, Mayo said.
Despite the emphasis that real estate interests in this country place on the statistic, a nation’s homeownership rate is one bench mark the housing indicators project does not particularly stress, Mayo said.
John Geraghty, a Department of Housing and Urban Development official who researches international issues, agreed that homeownership rates are not necessarily revealing.
“Homeownership rates are a tricky business. A number of less-developed countries have high homeownership rates, but they are counting the stilt house in the estuary,” Geraghty said.
Conversely, less than 20 percent of the Austrian and German populations are homeowners, yet “no one would argue they are badly housed. Lots of people are perfectly content living as renters,” Mayo said.
U.S. renters spend a quarter of their income on rent, as do their counterparts in London; Caracas, Venezuela; Istanbul, Turkey; and New Delhi, India. Rent takes the biggest bite out of income in Singapore, 38 percent; Monterrey, Mexico, 36 percent; and Seoul, South Korea, 35 percent.
The lowest rent burdens are in Sub-Saharan Africa, the Middle East and North Africa, including several countries with pervasive rent control, Mayo said.
The United States devotes 44 percent of the assets of its banking system to housing credit, more than any other country. Johannesburg, South Africa comes in a surprising second with 39 percent of its credit tied up in housing.
“That indicates the disproportionate allocation of resources toward housing, reflecting the enormously high standard of housing for the white population and not for the poor” in South Africa, Mayo said.
South Africa, though, has invested the least of its total economic resources in housing, 0.9 percent. That again is a result of racial segregation, because the majority of the population cannot afford to spend more on housing due to “spatial taxes imposed by apartheid,” Mayo said.
In the U.S., housing investment accounts for 2.4 percent of total economic activity.
Tidbits from the Housing Indicators Program:
– In Chile, 42 percent of mortgages are three months or more in arrears.
– Only 9 percent of homes in Amsterdam, The Netherlands are owned by their occupants.
– Squatter housing makes up 44 percent of the housing stock in Pakistan.
– Only 38 percent of New Delhi homes are connected to water.
– Slightly more than one-quarter of Washington, D.C. residents changed residences in 1989; less than 2 percent of Algerians did.
– Nearly 15 percent of the Egyptian housing stock is unoccupied.
– It takes 30 months to build a typical home in Hong Kong but only three months in The Phillipines.
– Home values in Rio De Janeiro, Brazil appreciated 96 percent in 1990, well under the 228 percent inflation rate.
– People live nearly six to a room in Madagascar.
