The Global Housing Crisis: Facts, Figures, and Solutions

Written by Rose Morrison, managing editor of Renovated
Revised and updated by Brett Stadelmann, managing editor of Unsustainable

This article is a hub for insights into the global issues and challenges around housing. It will be updated often, so feel free to check back regularly or sign up for the monthly issue to stay informed about developments, revisions, new stories, and articles exploring various aspects of this crisis.

If you wish to highlight how the housing crisis is affecting your local town, region, community, or country, please get in touch:

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Our Global Housing Shortage Is Influenced by the Labor Market, Materials Shortage, and Climate Change. How Do We Begin to Tackle It?

Countries around the world are experiencing a housing shortage that has left millions of people homeless. The main causes of this major crisis are a depleted labor market, shortages of construction materials and worsening effects of climate change. If we want to solve the housing crisis, we also need to solve these three big problems. Where do we begin?

The Housing Shortage by the Numbers

First, it’s important to understand and appreciate the urgency of the current housing shortage. As of late 2022, more than 1.8 billion people do not have access to adequate housing. At least 150 million live in permanent homelessness. An average of 15 million people get forcibly evicted from their homes every year.

The U.S. needs 6.5 million homes to solve the crisis, and that number gets bigger by the day. Across the pond, the U.K. needs 4.3 million homes to relieve the backlog of people living in public housing. Even countries with supposedly strong economies have not been able to solve the housing crisis.

It’s easy to blame the housing crisis on the COVID-19 pandemic shutting down the global economy, but the problem is much more complex. Although the pandemic certainly played a role, we can’t ignore the impact of climate change, labor deficiencies and building material shortages.

Issues Relating to the Housing Crisis

Let’s start with the most influential and most concerning problem — climate change.

Global Warming

Global temperatures have risen by an average of. 17 degrees Fahrenheit every decade since 1990. Each incremental temperature increase affects weather patterns, animal activity and environmental conditions. Unseasonably warm temperatures generally do not bode well for homeowners and the housing market at large.

Urban and suburban communities have suffered the most from global warming. The main building materials used in metropolitan areas are brick and steel, which retain heat and are turning cities into heat islands with uncomfortable conditions and high costs of living.

Natural Disasters

Natural disasters have significantly impacted housing markets in recent years. Atlantic coastal communities experienced a record-breaking hurricane season in 2020, while wildfires have devastated parts of the American southwest.

When natural disasters occur, home insurance premiums in the affected communities increase. Any uninsured homeowner must pay for the property damage out of their own pockets. Even if a hurricane or tornado doesn’t destroy your house, it will still directly make your property more costly.

In the worst-case scenario, a disaster can destroy entire neighborhoods and leave many people homeless with nowhere to go. This sudden displacement affects the dynamic of the surrounding housing market. Even communities that avoided the disaster could suffer an affordability crisis after an extreme weather event.

Rising Sea Levels

Sea levels rise by about .14 inches every year on average, which adds up to an increase of about 3.5 inches in the last 30 years. Climate scientists worry that this pace will speed up as greenhouse gasses from fishing and sea trading pollute the water and atmosphere. If the water level continues to rise, many coastal areas will be in jeopardy.

The biggest concern about rising sea levels is a potentially massive inland migration that causes the demand for homes to skyrocket. The supply of homes is already low and prices can’t get much higher. Affordable housing would be extremely difficult to find for people who need to relocate.

Potential Solutions

How Can We Fight Climate Change?

The key to solving climate change in conjunction with the housing crisis is to develop a better understanding of our environment. As urbanization increases and our cities become more populated, we must consider the risks and build communities that coexist with the environment instead of clashing with it.

Switching to more eco-friendly materials is a good start. Rather than relying on cheap carbon-based materials like steel and concrete, we can incorporate more natural elements like wood and stone. The adoption of fire- and heat-resistant materials is a great way to combat the problem of urban heat islands.

These big-picture ideas will certainly help, but our day-to-day habits will have a bigger impact. We must utilize renewable resources, reduce our energy consumption, reconsider our transportation methods and use locally sourced products. These efforts will simultaneously help to stabilize urban climates and housing markets.

Addressing the Labor Crisis

Now let’s talk about the labor crisis. The U.S. lost roughly 47 million workers from 2020 to 2021 in what economists call “The Great Resignation.” The construction industry has suffered great losses, as 89% of construction companies are struggling to fill hourly trades positions.

The main reasons for this trend are a lack of interest in the trades among younger generations, a sudden retirement spree and poor working conditions. To address these issues, The Associated Builders and Contractors spent $1.6 billion on training programs in 2022 alone. These programs include an emphasis on sustainability and learning about new technologies.

Even tool and equipment manufacturers are helping with educational efforts to attract people to the construction workforce. The “Empowering Makers Global Impact Challenge” is one such initiative that provides scholarships and training programs to support STEAM education and raise awareness for career opportunities.

Technology must also play a big role in solving the construction industry’s labor problem. Advancements such as 3D printing and modular building can drastically reduce labor requirements for residential construction and speed up the process of building affordable housing.

Smaller technologies like construction wearables and automated robotic devices can compensate for missing labor by helping employees do their jobs with greater speed and efficiency.

Addressing Material Shortages

The construction industry is full of material diversity, and yet material shortages remain an ongoing problem. The main reason for the shortages is increased government and commercial spending on construction projects. This simple problem leaves fewer resources available for residential construction.

Additionally, residential construction continues to rely on advanced technologies, expanding the material requirements for the average home. Most contractors can’t afford these technologies, let alone get consistent access to them. There are simply too many moving parts and not enough physical resources to build houses.

Due to volatile supply chain activity, prices for concrete, lumber and other basic materials are constantly fluctuating. These price changes cause delivery delays, which in turn lead to project delays. All of the timelines surrounding material production and shipment are inconsistent.

The solution to material shortages is the same solution to climate change — go back to the basics. Instead of relying on a plethora of different materials, we can use abundant natural resources like wood and stone to build affordable housing. Simplifying residential construction will then clear up supply chain backlogs and increase the availability of precious materials.

The Housing Shortage Is Fixable

Although you just read a lot of bleak statistics, you should still have hope. The housing shortage is fixable despite its high numbers. Progress may be slow, but if we take incremental steps to combat climate change, rebuild the labor force and simplify residential construction, we can continue to provide affordable housing for more and more displaced people.

Rose Morrison

About the Author

Rose is the managing editor of Renovated and has been writing in the construction industry for over five years. She’s most passionate about sustainable building and incorporating similar resourceful methods into our world. For more from Rose, you can follow her on Twitter.