Cities Investment Facility and UN-Habitat address the housing affordability challenge

This article is based on the Sustainability Keynote at the PropertyGuru Asia Real Estate Summit originally presented on 8 December 2022.

Cities Investment Facility and UN-Habitat tackle the global housing challenge with key partnerships, sustainable practices, and the promotion of adequate housing for all

UN-Habitat estimates that about 1.6 billion people globally lack adequate housing. sommartsombutwanitkul/Shutterstock

Housing is more than just a physical structure; it serves as a safety net for the mental, physical, and social well-being of individuals, families, and communities. Housing is deemed affordable when its cost does not jeopardise the occupants’ ability to enjoy other fundamental human rights and meet basic needs, such as food, healthcare, education, and transport. This is commonly measured by setting a threshold of 30% of income dedicated to housing expenses. It is important to note that affordability should always be considered in conjunction with the other components of housing adequacy. Therefore, housing quality, infrastructures, services, and mobility should be considered when evaluating affordability.  

UN-Habitat estimates that about 1.6 billion people globally lack adequate housing, with 6.4 estimated to be in a state of absolute homelessness. Ensuring access to safe, adequate, and affordable housing for all is clearly a pressing challenge amidst rapid urbanisation. It is therefore paramount to put people at the centre of efforts to address housing challenges. In relation to this, the Cities Investment Facility (CIF) aims to mobilise private capital, foster public-private partnerships (PPP) for sustainable development, and provide technical assistance for projects in the housing sector. To meet global commitments such as the Sustainable Development Goals (SDGs), substantial funding is required. This demands the active engagement between governments, banks, investors, and developers. However, at the core of UN-Habitat and CIF’s mission is the accountability to ensure adequate housing for all and the promotion of social value.   

Housing affordability challenge 

In recent years, the COVID-19 pandemic has exacerbated an unprecedented housing crisis. The International Monetary Fund (IMF) reports that housing costs are becoming increasingly disproportionate to income, a primary driving force behind the housing affordability challenge. For instance, a study of 200 cities globally reported that the cost of purchasing a home was three times higher than the average income of city residents. 

Other factors, including a shortage of land, materials, and labour, have contributed to the crisis. Notably, land is inherently limited in supply and cannot be generated in response to increased demand, which impacts housing price structures and value chains. 

This shortage of adequate and affordable housing is expected to affect about 1.6 billion people globally by 2025, as the World Bank estimates. To counter this challenge, UN-Habitat estimates that the world must unlock 96,000 homes daily to support the estimated 1.6 billion individuals who will need adequate housing by 2030, primarily in rapidly urbanising and developing countries. These statistics highlight the gravity of the challenge, prompting a closer examination of how CIF can play a crucial role in addressing this concern. 

How CIF is solving the problem 

CIF proposes the Think-Do-Partner-Share framework established by UN-Habitat as a solution to addressing the housing challenges. Think entails breakthrough research and capacity-building that establishes standards, proposes norms and principles, discusses best practices, monitors worldwide progress, and aids in designing policies relevant to sustainable cities and human settlements. Through UN-Habitat’s capacity building and research, CIF can conduct market research to identify potential projects according to the needs of cities and assess the level of funding available to meet these needs. Do entails various forms of technical assistance, relying on the organisation’s unique expertise in sustainable urbanisation and crisis response. UN-Habitat undertakes initiatives to provide countries with value-added and personalised assistance. Under Partner, UN-Habitat and CIF recognise that tackling this complex issue requires collaboration and partnership with various stakeholders. UN-Habitat and CIF work with governments, international organisations, UN agencies, civil society organisations, foundations, academic institutions, and the commercial sector to achieve long-term success in solving urbanisation concerns. Lastly, through Share, UN-Habitat and CIF mobilise public, political, and financial support to reinforce development plans, practices, and investments in sustainable development at a local, national, and global level.


Country Housing Profiles are UN-Habitat’s flagship diagnosis tool that assists governments and housing stakeholders to assess and understand the structure and function of the country housing sector. The profile provides a tool for in-depth analysis of the housing delivery systems, including policy and institutional frameworks, legal and regulatory frameworks, financial and industrial ecosystems, land supply systems, and basic infrastructure provision. Understanding these aspects helps to identify the factors behind housing inadequacy, unaffordability, and informality, enabling the development of tailored investment strategies. By leveraging Country Housing Profiles, CIF and their partners can gain comprehensive insights into the housing sector of specific countries, thereby enhancing their ability to make well-informed and targeted decisions.  

Additionally, an emergent tool from UN-Habitat’s research is the housing value assessment methodology (VAM) tool. This tool is designed to assist national housing programmes and large housing projects by providing feedback on gaps and areas for improvement. It primarily focuses on aspects, such as governance and regulations, housing and urban design, environmental impact and resiliency, as well as resources and circularity. By using VAM, cities and housing projects can comply with a gold-set standard of regulations, standards, and guidelines. This approach leverages housing and construction to achieve the set SDGs. Currently, the VAM tool has assessed four projects catering to a population of 500 million in Africa and Asia. The objective of this tool is to provide a comprehensive overview of the housing market through diverse intersecting lenses. This approach is useful in advancing SDG 11.1, which aims to ensure access to safe, adequate, and affordable housing for all, primarily for the urban population in slums, areas with inadequate housing, and informal settlements. 

Source: UN-Habitat The Housing Value Assessment Methodology (VAM)


UN-Habitat, through CIF, is addressing the housing challenge by providing technical assistance in housing project preparation to ensure their appeal to the private sector. The ultimate goal, however, is to guarantee universal access to adequate housing for all. One of CIF’s key strengths in this sector lies in its methodology for project preparation. CIF’s methodology is divided into two phases: the strategic development phase, which involves identifying and assessing projects under the guidance of UN-Habitat and its private sector partners, and the implementation phase, which guides projects through concept, feasibility, development, and financial close.  

UN-Habitat has provided technical assistance to several housing projects globally, including a housing project in São Tomé and Príncipe, an island country in Central Africa. In São Tomé and Príncipe, UN-Habitat led two municipalities in mobilising investments from international and local partners to contribute to two housing projects valued at $5.5 million. The projects resulted in the construction of 133 new houses built in an environmentally sustainable manner, benefiting 504 individuals. 


Source: UN-Habitat – Terra Prometida Housing Project in São Tomé and Príncipe

Currently, CIF has five projects in its pipeline geared towards affordable housing. These projects aim to build at least 18,000 new and affordable homes for populations in middle- and low-income countries, including Kenya, Rwanda, Malawi, India, and Ethiopia. These projects are realised through partnerships with implementing partners, such as Reall, an innovator and investor in affordable housing.  


Public-private partnerships can be leveraged to pool complementary resources, accelerate innovative solutions, and share risks and rewards. These partnerships are most effective when they’re based on a commitment to the right to housing and shared goals of sustainability and affordability. 

CIF’s main commitment is to the people who stand to benefit from universal access to adequate housing. By placing people at the centre and prioritising accountability, CIF and its partners can create a transformative investment facility that proactively tackles the housing challenges. 


The main aim of the project preparation work undertaken by CIF’s implementing partners is to deliver adequate housing for all and promote social value by ensuring projects reach financial close. By assessing the financial feasibility of projects, CIF, through its investment vehicles, helps make these projects attractive to private investors. These investors will then unlock the capital needed to actualise the projects’ potential and positive impacts. 

Unlocking private capital is a key driving force behind CIF’s mandate. This mandate is influenced by the gap in infrastructure financing, estimated at $3.2 trillion annually, due to the lack of well-prepared projects that meet international financing standards. This is also in line with the concept of long-term strategic public finance. Such public finance, encompassing tax reliefs, subsidies, strategic procurement, and long-term loans from public investment banks, complements private investment and facilitates the achievement of global commitments. Governments actively engaging with banks, investors, and developers ensure that partnerships with private actors align with governments’ principles and goals, which are geared towards promoting the common good. This collaboration between public and private sectors is crucial in addressing the housing affordability challenge, as private capital plays a significant role in housing development projects globally. Through this integrated approach, CIF can increase the supply of affordable housing units, fostering a people-centred and accountable investment strategy to fulfill the human right to adequate housing for all. 

Moreover, it’s worth noting that all projects in CIF’s pipeline require public-private partnerships, involving collaboration between governments and the private sector. Both sectors can harness each other’s strengths and resources to streamline the regulatory process, utilise subsidies and tax incentives, and secure funding, thereby increasing the supply of affordable housing units.  

During the phases of financial close and construction, CIF can monitor and evaluate data pertaining to adequate and affordable housing projects, enabling the assessment of their success and the identification of gaps for improvement. This enables CIF to share best practices for adequate and affordable housing globally and facilitate the scaling and replication of successful projects across diverse regions while adapting to local contexts. 

Leveraging the power of stakeholders 

Housing is a human right and a crucial pathway to realising most SDGs. However, the reality is that a significant portion of the urban population is excluded from safe, affordable, and adequate housing, and this problem is expected to worsen without targeted interventions. CIF holds significant promise in addressing the established predominant concern affecting the global real estate market. It does so by following the Think-Partner-Do-Share framework established by UN-Habitat.  

Through Think, UN-Habitat and CIF provide tools such as the Housing Profiles and VAM to help improve housing from an intersecting perspective. Through Do, CIF responds to the housing affordability challenge by providing upstream project preparation advisory services for affordable housing projects across developing nations, aimed at ensuring their financial close. Through Partner, CIF partners with organisations, such as Reall, which have unique expertise on housing affordability and market access to the regions where the development projects are located. Finally, through Share, CIF aims to mobilise private capital to ensure projects reach financial close and achieve their potential.  

The success of CIF in addressing the housing affordability challenges rests on how it leverages the strengths and expertise of diverse stakeholders. By facilitating dialogue and collaboration among these stakeholders, CIF fosters innovative solutions and ensures that investments in potential projects align with sustainable development principles. 

This article was originally published on ARES White Paper Volume 3. For more information, visit or email [email protected].