Rental Housing - UN-Habitat

Executive summary1. Few governments have taken rental housing very seriously over thelast thirty years. The report reveals the current level of neglect and suggestswhy the extent of encouragement given to homeownership has been misplaced.It then describes the diverse forms that rental and shared housing take beforeexamining some of the myths that underpin much thinking about the rentalissue. Finally, it suggests what governments might do to encourage landlords tocreate more and better quality accommodation for rent. The report discussesrental housing throughout the world but its main message is intended forgovernments in developing countries.2. Chapter I provides definitions for the key terms used in the report. Inparticular, it stresses that the differences that exist between formal and informalrenting often make little difference to people’s lives. The following sectionquantifies the role that rental housing plays in the housing markets of differentcountries and demonstrates that despite so many States attempting to increasethe level of homeownership, in several places renting and sharing have been onthe increase. The different trends reflect the diversity in tenure patterns bothbetween countries and within countries. The final section provides someexplanations for that diversity. The level of economic development is not aparticularly significant variable because housing tenure is so stronglyinfluenced by the process of urbanization, the form of land occupation andmost importantly by the nature of State policy.3. Chapter II shows that diversity is also characteristic of the rentalhousing stock. The kind of rental housing that dominates in one country isoften absent in another. In some countries, particularly in Northern Europe andin former communist countries, the public sector still provides a great deal ofrental housing but generally public sector involvement is in decline. In someEuropean countries, social housing institutions are taking over responsibilityfrom the State but generally it is the private sector that provides most of therental housing supply. In most developing countries, the principal source ofrental housing is now the self-help landlord. An increasing proportion of rentalaccommodation is thus found in the low-income settlements that surround mostcities of developing countries. As a result, much rental accommodation escapesgovernment rules and regulations and few contracts between landlords andtenants are formal. Because of the diversity of the rental housing stock, it isextremely difficult to draw up a simple list of policy recommendations. Theinformality of so much of the process also limits policy intervention.4. Chapter III examines the nature of landlords, tenants and sharerswith an emphasis on the private rental housing sector in developing countries.Executive summaryxix