Category Archives: AHI Activities

What makes housing affordable?

By Lindsey Kreckler, Engagement Strategist

Affordable housing, like so many other things in life, can be very difficult to define, and instead often is determined by normative statements. What constitutes “affordable” housing can vary widely even within a single city, never mind a country or the entire world. Affordable for whom? Affordable where? Many common definitions of affordable housing do not take these differences into account.

The most commonly occurring definition of affordable housing is that used by the United States government, which defines affordable housing as housing and related expenses (mortgages, utility bills, etc.) that do not exceed 30% of a household’s income. If a family’s housing expenses are higher than 30% of their income, they are considered burdened. This standard can generally be applied to households within the United States, and even in comparably developed countries, such as Australia, the United Kingdom, and Canada.

Another recurring definition of affordable housing, one that takes into account the differences between different geographic areas, looks at individual markets. The median multiple system, used in this report from Demographia and recommended by the World Bank and United Nations, determines the price to income ratio of a market by dividing the median house price by median household income. According to this system, a median multiple of 3.0 or less signifies an affordable housing market, while a median multiple of 5.1 or more demonstrates “severely unaffordable” housing. The map here at Numbeo, based on user-reported numbers, shows a similar measure, the Price to Income Ratio, defined as the “ratio of median apartment prices to median familial disposable income, expressed as years of income.” While these data are user-reported and should be taken with a grain of salt, the map provides an interesting visual of how the United States and other developed economies compare to the Global South and similarly developing economies.

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India photo-share: Slum upgrading in Ahmedabad, Gujarat

By: Vidhee Garg

On my recent visit to India, I went on a guided tour of Ramesh Dutt Colony, a slum settlement on the outskirts of Ahmedabad, led by Kinnariben of Mahila Housing SEWA Trust (MHT). MHT is a sister organization of Self-Employed Women’s Association (SEWA), with which AHI has partnered since 2008.

MHT was a key partner in the Ahmedabad Municipal Corporation’s Slum Networking Project (SNP), which aimed to transform the physical environment of the slums, and has been working with this particular settlement since the late 1990s. The transformation of the environment established several basic infrastructure services – household water connections, toilets and underground sewerage for individual households, and stone paving of internal and approach roads, among other things.

More than a decade in the making, the residents are now eagerly awaiting government permission to rebuild the settlement under the Rajiv Awas Yojana (RAY) scheme, which will give the residents title to land and permanent housing.

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Kinnariben (left) with one of the SEWA members in Ramesh Dutt Colony. Kinnariben is one of many field operation staff (called ‘Saathibens’) who interact regularly with community residents, thereby forming an integral part of SEWA’s last-kilometer delivery system in meeting the banking needs of SEWA members.

Children play gully cricket in the mid-afternoon. Narrow alleys (gully in Hindi) between the houses are good locations for children to play while being supervised by family and community members. 

Children play gully cricket in the mid-afternoon. Narrow alleys (gully in Hindi) between the houses are good locations for children to play while being supervised by family and community members.

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Indonesia photo-share: self-help housing in Depok

By: Duong Huynh, Project Manager

As part of the housing sector mission to Indonesia, I joined another colleague Matt Nohn, whose work focuses on incremental housing, and a team of staff from Indonesian Ministry of Housing to visit Depok. After a 1+ hour drive through some peaceful Indonesian peri-urban farm land, we landed in Depok to begin our tour of a few of the city’s self-help housing project.

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Self-help housing belonging to a family of one working mom and three daughters.

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