As the concept of impact investment has developed and interest in it has grown, investment opportunities have emerged in many countries and across many different sectors. But there is one subsector that has been often overlooked: housing.
Inadequate housing is a problem that, according to Unhabitat, affects 1.6 billion people already. Moreover, cities in developing countries are growing at a very fast pace, and the housing deficit will correspondingly rise if is not properly addressed. The development of useful and lasting solutions in the housing arena will require the collaboration of public and private parties and huge amounts of persistence, but if impact investors really want to improve the lives of the poor, the housing problem must receive the attention it deserves.
Although challenges such as the lack of land titles, the intensive and patient capital requirements and local political problems have kept investors wary, the magnitude of the improvements in people’s lives that could be achieved through the provision of this fundamental need should make them realize the large social and economic opportunities that are contained within the development of the sector.
Yes, it is a very complex problem, but didn’t impact investment emerge to make a difference through investments? Because there is a huge difference to be made by allowing a person to have access to a shelter, better health, security and the improvement of their overall well-being. We should not ignore a rough diamond just because it doesn’t have the sparkle yet. Given the importance that housing has for people and society, finding the way to provide affordable ones and making it sustainably both financially and environmentally could turn housing into one of impact investment’s most precious gems.
The good news is that the way has started to be paved and some impact players are acknowledging the role of housing as an essential issue to break the poverty cycle and leading the way forward. Lets hope they set the trend!
