Upgrading living conditions in slums will become critically important as climate change intensifies. These communities – typically found in megacities – are home to 12 percent of the world’s population, and their houses are more liable to collapse in extreme weather events. Upgrading homes in slums and informal settlements is a space for innovative, affordable, and resilient housing.
According to award-winning architect Alejandro Aravena, architects will need to build the equivalent of 1-million-person city every week for the next 15 years – with a budget of just 10,000 USD per family.
Slum residents are innovative and entrepreneurial by necessity, having created homes and infrastructure from seemingly impermanent materials and scarce resources. Hence, when developing and deploying solutions for housing in slums, there is an opportunity for mutual learning and innovation rather than a one-way exchange of products. This process of mutual listening and learning has the potential to foster innovative solutions relevant to the global market, combining resilience and affordability – a winning formula in any market.
PRODUCTS AND SERVICES
Investing in housing in slum communities has an array of positive and multiplying side effects, such as providing residents with the ability to divert their energy towards pursuits other than simply keeping a roof over their heads. Slums contain both an opportunity space for new products and services, as well as new investment opportunities. Products and services in this opportunity space include whole-building retrofitting; climate-proofing adaptation add-ons, such as affordable compressed gravel flooring to combat health problems from dirt floors; energy-positive and pre-fabricated houses; reusable air filters and building material; sustainably sourced low-cost bricks and mortar; and coatings that have a cooling effect and absorb pollution.
Building half houses is a piloted approach in the favelas of Chile , where slum dwellers use their savings and government subsidies to get help from an architect to build half a house, with the shell for the other half to be completed over time. The owner of the house completes the other half as they gain resources for the materials. Hence, once the entire house is completed it is truly co-created by architects and residents.
MARKET SIZE AND DEMAND DRIVERS
Market reports on the slum housing market are virtually non-existent. However, with 828 million people around the world residing in slums, the number of potential consumers is important and growing. The number of people moving to urban areas is increasing every day, and housing supply in slums is nowhere near meeting the growing demand, which is projected to double by 2030.
Considering the enormous demand and substantial size of the low-income housing market, which is worth more than 300 billion USD globally, surprisingly few market-based approaches exist to provide housing solutions for poor people residing in slums.
The Wall AG has developed the Universal World House, a light-weight, low-cost house made out of cellulose – easily assembled, environmentally friendly and earthquake-proof.
Location: Zimbabwe and Nigeria See this solution
Elemental developed Villa Verde, half finished units that enables future residents to fill in the remaining unfinished living space to fit their needs and financial situation.
Location: Chile See this solution
The iShack Project is providing solar electricity, on a pay-for-use basis, to residents of an informal settlement.
Location: South Africa See this solution
An alternative to concrete, EarthEnable provides healthy and affordable floors made out of natural materials and then sealed with the company’s own drying oil.
Location: RwandaSee this solution
The Abod Shelter Foundation has created Abod, a sustainable, lightweight home for slum dwellers, which is easily shipped and can be built by their owners in just one day.
Location: South Africa See this solution
Eco-BLAC Brick, a low-cost way to manufacture quality bricks which makes use of waste boiler ash from paper mills and requires no firing.
Location: India See this solution
Nevhouse builds low cost, durable, prefabricated houses out of recycled plastic waste.
Location: Australia and Singapore See this solution
Construction Process Moladi provides a low-cost and efficient construction process with a unique technology utilizing removable and recyclable plastic that can be reused 50 times.
Location: Global See this solution
Upgrading informal housing in slum communities is ranked lower than most opportunities, ranking 13th in the list of 15 opportunities. The opportunity is ranked the highest by leaders in China and the MENA region, where it is the 5th most preferred opportunity of all.
A very low perceived capacity to develop this market across all surveyed regions indicates a lack of belief in the potential of this opportunity. In fact, respondents have evaluated the political, economic, and technological capacity to be lower than all other opportunities in the survey. Nevertheless, respondents in China – where it is a preferred opportunity – evaluate the overall capacity to mature this market higher than all other regions. Hence, the market for delivering housing to slum residents can be expected to mature faster in China relative to other regions.
Globally, respondents do not believe their organisations are likely to be positively impacted by the opportunity, nor do they expect their organisations will engage in this market opportunity. The leaders surveyed perceive the business case to be less attractive relative to most of the other opportunities, as it is ranked second to last in terms of the strength of its business case.
The financial sector ranks this opportunity highest (8th) with regard to its likelihood of pursuing it; however, no business sector is truly eager to pursue this opportunity compared to the other opportunities. The majority of business sectors believe this opportunity has one of the least positive impacts on society. The survey reveals it is the opportunity business is most likely to actively advocate for in China, which supports the notion that the market for slum housing can be expected to mature fast in China.
Perceived benefits from pursuing this opportunity (x), and capacity to do so (y), World and geographic regions. Scale goes from -10 to +10.