Rental Housing - UN-Habitat

I. Introduction: The significance of renting andsharingRemarkably few governments have taken rental housing very seriously over thelast thirty years. This chapter illustrates the current level of neglect andsuggests reasons why a drive for ownership has tended to dominate mostcountries’ housing policies. The chapter then provides some definitions of keyterms before attempting to quantify the role that rental housing plays in thehousing markets of different countries around the globe. It continues with adiscussion of recent trends in housing tenure and explains why differentpatterns are occurring in different parts of the world. Finally, the chapteranalyses statistical data in order to demonstrate how some of the assumptionsmade about rental housing are highly questionable. For example, housingownership does not increase as national per capita income rises. If there is acritical variable that explains housing tenure, it is the nature of State policy.I.A. The neglected sectorTwenty years ago, renting and sharing in the cities of developing countrieswere neglected topics. They were neglected in two senses. First, as UN-HABITAT indicated, there was profound ignorance about who most tenantsand sharers were, about the conditions in which they lived, and “almostnothing is known about those who provide rental accommodation”. 1 Second,governments were wholly uninterested in tenants and sharers, except to convertthem into homeowners.Today, more is known about tenants and something about sharers. As thisreport will demonstrate, a great deal of work has gone on in the 1980s and1990s to clarify how the rental housing market operates. There are still areas ofambiguity and issues that must be investigated in more detail. But the broadoutlines of the informal rental housing sector are no longer shrouded inmystery.What has changed very little is government policy. In 1989, a meeting ofexperts organized by UN-HABITAT concluded that:“governments should review their housing policies and deviseappropriate strategies for rental housing which remove biasesagainst non-owners”. 2Unfortunately, little has actually happened, and recognition of the importantrole played by the rental sector still constitutes perhaps the greatest hole inmost national housing policies. It is difficult to find more than a handful ofexamples of developing country governments that even admit publicly that arental housing market exists. In Nepal, there is a housing policy, but not aChapter I: Introduction 1