Housing Needs Assessment

ppwk 16

MA
23 December 2015
Partly based on lectures
by Ellen Geurts, IHS
HOUSING NEEDS ASSESMENT

What is it? and why?

Methodology?
 Housing problem often regarded as a simple equation to close the
housing gap i.e. number of shelter units needed
Housing strategies are there for aimed at providing finished shelter
HOUSING structures, end products

NEEDS But are these strategies addressing the housing problems?

ASSESMENT Do we understand the housing needs well enough?

Define what people actually need, not what you think they need...
 Housing
Shortage?

What do you
Housing Housing
need to Needs? Demand?
assess?

Housing
Aspirations
?
 Housing shortage: shows the difference between the number of
households and the number of existing residential units
Example :
A survey depicts 10 million houses and 11.2 million families
Shortage is the difference: number of households minus number of
dwellings 1.2 million houses or 12%
Housing In reality the housing need was much greater:
shortage Many households lived in overcrowded units
Many units had no facilities
Housing needs survey found 30% of the urban population living
in substandard housing
 Preference of accommodation expressed, subject to the constraints
of income and price
Effective demand: economic concept that reflects the amount of
housing for which the population is able and willing to pay
Housing (affordability)

demand Consumers demand: measured in terms of bundle of attributes

(quality) of dwelling
 This is different from both need and demand as it reflects the
populations wishes regardless of national standards or ability to
pay. It is similar to felt needs and expressed needs.
Defining Felt Needs is based on surveys of peoples attitudes and
housing aspirations. It is generated in complex ways and may be prone to
changes in fashions and advertising.
aspirations Expressed Needs depend, for example, on pressure groups, so is
likely to over represent the better organized and more vocal.
 Actual housing shortage at the beginning of the plan period
Actual population growth: actual size of the market
(considering population projections throughout the plan
period)
HNA: factors Effective demand: ability to pay (affordability)
Different types of housing problems which determine different
to consider needs
Delivery and construction capacity
Availability of housing finance (and land)
 Planning instrument that estimates existing unmet housing needs
& future demand for housing relative to existing & anticipated
supply capacity
What is Baseline information in support to policy interventions

Housing Assessment can be short-term (3-5 years) or long-term (10-15

years)
Needs Level country, region, city, community
Assessment? Quantitative and qualitative
Must be linked to ongoing monitoring and
housing indicators
 INFORMATION NEEDS
To identify existing housing shortage & future needs for housing
(scale of problem)
To estimate existing & anticipated housing supply capacity &
bottlenecks to supply
Why Housing To identify existing housing resources & their ability to
accommodate future demand
Needs POLICY-MAKING NEEDS
Assessment? To formulate necessary policies & programs to meet
existing/future demand & address bottlenecks hindering effective
supply
To develop planning instruments & programs to address housing
needs of vulnerable groups (low-income, elderly, )
 1. Surveying population characteristics
2. Examining existing housing situation
3. Assessing housing demand
Housing Needs 4. Assessing housing supply
Assessment 5. Determining affordability
methodology 6. Identifying existing housing resources
7. Identifying policy interventions
8. Identifying target groups
 Existing population characteristics
Demographic: Population, Number of households, Average
1. Surveying household size, Special needs groups (e.g. single female-headed
households, elderly),
Population Economic: Income distribution, Percent below poverty line,
Characteristics Existing & expected annual rate of population growth
Existing & expected rate of new household formation
 Existing housing stock characteristics:
Number, type & condition of existing units, Tenure
2. Examining type (own vs rent),

Existing Trends in housing prices & rent levels

Housing Vacancy rates

Situation Estimate of existing housing shortage

Data disaggregated by district / neighborhood
3. Assessing
Assessing new housing stock needed to:
Housing Accommodate newly formed households
Demand Alleviate existing housing backlog (unmet demand, overcrowding situations,
substandard housing, )
Replace existing housing units lost to demolition
 Formal housing supply trends:
4. Assessing New housing starts (number of building
Housing permits issued annually)
Disaggregated by sector (public vs private)
Supply
Informal housing supply trends:
Aggregate informal sector production (balance between new
stock added in census period & formal supply, land coverage
estimates from satellite images, )

Forecast of housing supply capacity & ability to meet

anticipated demand
5. Determining
Identifying median household income for each decile of
Affordability income distribution
(1) Estimating effort ratio (maximum spending on housing as % of
annual household income)
How much do people currently spend on housing?
What is the maximum that they can spend on housing? 20% -
30%?
5. Determining What housing product can households
Affordability buy for this money?
Is housing finance available / accessible?
(2) If yes, determine housing product based on lenders guidelines
(maximum loan amount, maximum loan-to-value ratio, debt service
coverage ratio, )
If not, analyze how do households finance housing acquisition

How does each income groups affordability fare relative to

existing supply products?
6. Identifying Availability of housing finance
Availability of land & infrastructure services
Existing
Opportunities & capacity for densification (vertical expansion, infill
Housing construction, )
Resources Need & capacity for horizontal expansion
 Supply side interventions
Removing legal, procedural & administrative hurdles to supply (e.g.
abolish rent control, streamline building permit process, )
7. Identifying Supplying land & infrastructure services efficiently
Providing incentives to private supply
Policy
Demand side interventions
Interventions Making available mortgage housing finance
Providing transparent, well-targeted subject subsidies
Legalizing & upgrading informal settlements
 Low income groups:
Income-based targeting: 50-80% of Area Median Income
8. Identifying Other targeting: geographic/area-based, occupation,
Target Residents with housing problems:
Groups for Households evicted from their housing
Households living in substandard housing
assistance Homeless

Other groups:
First time homebuyers
Newly formed households
Young professionals
 1. If what is lacking is clear tenure, services, or both then what
may be the real need?
Housing 2. If what people are already living in are taken as acceptable
dwellings that can be improved then what may be the real
Backlog need?

against
Aspects usually neglected in defining the housing backlog is a
Housing Needs realistic assessment of financial resource available, peoples cultural
understanding of housing, and the ability and willingness of people
to pay for dwelling units and its housing attributes.
 Donts
Inaccurate understanding of housing needs leads to misguided
housing interventions;
Dos and Supply driven approaches often overestimate public financial
Donts of resources and underestimate market forces.
Dos
housing policy Adopt a feasible ambition, define real housing needs linked to
makers actual physical and financial capabilities of future beneficiaries
Housing supply should result from housing demand..
SEKIAN TERIMAKASIH