Housing Policy: How the National vs. Local Disconnect is Harming Cities

I recently had a chance to meet and hear from Dr. Rudiger Ahrend the head for the Urban Programme in the OECD’s Directorate for Public Governance and Territorial Development.   He gave a presentation at Housing Europe’s yearly conference regarding the rise of large cities and the challenges that it presents for housing.  Dr. Ahrend brought out that in 1950, only NYC was considered a mega city but by 2015 there were 29 of them.  Housing costs continue to also increase in countries around the world.  This is causing a massive redistribution of wealth from poor to rich and young to old.

Challenges for Housing Policy:

Dr. Ahrend said that the main issues in housing policy are national vs. local, coherence of policy objectives, cross sectoral integration and metropolitan level coordination.  In more detail:

• National vs. Local– Most countries have policy to give money for housing. At the same time, in many regional levels there are policies that restrict housing.  It might be for urban form but it creates a disconnect between federal and local.  This increases housing prices.
• Coherence of Policy: Many spatial plans go in the opposite way of national policies for housing. For example, there are often lower taxes for family housing but the city wants to have density.  This is a clear disconnect.
• Metropolitan Level: Fragmentation in metro areas can have negative effects. Too many small cities cause issues because there is a lack of big picture thinking on a larger metro area scale.  This can cause issues in housing development.

Dr. Ahrend works intensively with various urban issues and recently gave an insightful interview regarding urbanisation to the website.  Urbanet.  You can find the full interview here.   In it he said,

Urbanisation as such is a phenomenon that can be very useful for multiple reasons. The first one – as I mentioned before – is that people in cities are more productive than in smaller towns or in the countryside. This process started in Europe with the Industrial Revolution and is now also on-going in the developing world, so there is huge potential here. But then again, it is not just living in a place with a higher population density that makes people more productive. People also need to live in a functioning city. Therefore, it is really important that the process of urbanisation is well-managed, that infrastructure is put in place and that there is a certain level of foresight in planning processes.

There are some countries that say “We do not want urbanisation because it is going to have a negative effect on our cities and they are trying to prevent it. This is a self-fulfilling prophecy. If cities are trying to prevent urbanisation, they are not investing in the required infrastructure, they are not trying to manage the process, and then the outcome obviously is going to be negative. So what cities need to do and what countries need to do is to be willing to embrace urbanisation, they need to manage it and they need to make sure that in the process of urbanisation, well-functioning cities are built.