With urban populations projected to exceed two-thirds of the global total by 2050, cities face growing pressure to deliver adequate and sustainable housing. The United Nations’ Sustainable Development Goal 11 calls for urban environments that are inclusive, safe, resilient and sustainable. Yet achieving these ambitions is proving difficult, particularly amid high inflation and fiscal tightening that limit public-sector investment capacity.

Today, an estimated 1.6 billion people lack access to adequate housing. As affordability deteriorates further – driven by housing costs that consistently outpace average incomes – the need for scalable, long-term solutions becomes more urgent.

While private capital, particularly from institutional investors, could help close the gap, persistent short-termism in housing policy has dampened participation. Frequent shifts in regulation and political priorities deter long-horizon investors such as pension funds and insurers, who require stability and predictability to support decades-long commitments. The lack of continuity in national housing strategies leaves potential capital on the sidelines.

A shift in perspective may be necessary. Reframing housing as core infrastructure – on par with transport or energy – could unlock longer-term investment and encourage greater policy continuity. Doing so would strengthen economic and social outcomes and could also help mobilise the scale of funding needed to address the global housing shortage.

World’s most populous cities, 2025 vs 2050

Source: Savills Research using Oxford Economics

The global housing shortage

As cities continue to grow, local and national governments must ensure infrastructure and services are not overwhelmed. Schools, hospitals, roads and public transit networks – as well as housing – must keep pace. Cities that develop in a controlled and inclusive manner could benefit global society in several ways. More sustainable new housing developments can support the transition to a low-carbon economy and reduce air pollution, while incorporating shared and green spaces can improve inhabitants’ quality of life and safety. Increased provision of residential property also supports economic growth as employees can live closer to work and participate in the local economy.

However, the most significant obstacle to sustainable urban growth is the lack of housing availability. Shortages are fuelled not only by more people moving to urban areas, but also by the increasing cost of housing relative to incomes. A recent International Monetary Fund study of 200 global cities found that 90% were ‘unaffordable’ to live in – with the typical home costing more than three times average annual earnings. Meanwhile, figures from UN-Habitat suggest that the world would need to build 96,000 new affordable homes every day to adequately address the housing shortage between now and 2030.

New construction is not the only solution. The OECD estimates there are 42 million empty homes globally. In the US, more than 11% of homes are unoccupied. In Canada, the figure is almost 9%, representing around six years of housing supply. However, the legal and logistical challenges of making unoccupied homes available to the market are considerable.

Increasing housing supply

We’ve analysed housing supply pressures in several major cities to see how policymakers are tackling regulatory and logistical obstacles to increasing the supply of new homes.

Singapore success

Following high net migration in recent years, Singapore’s Government is targeting 50,000 new public dwellings annually between 2025-27. The city-state funds high-quality public housing through its Housing Development Board (HDB) to prevent locals from being priced out.

“Since independence, Singapore has approached the issue of housing holistically. Public housing and urban planning authorities worked together to provide affordable housing by identifying new towns to develop,” says Alan Cheong, Executive Director of Research and Consultancy, Savills Singapore.

“These estates were often developed near employment centres, initially manufacturing clusters. Modern HDB flats feature sleeker, condo-like finishings that offer a contemporary aesthetic and improved functionality, with laminated timber doors, steel entrance gates, larger tiles and improved sanitary fittings.”

Divided into 24 towns and three estates, each area is self-sufficient, with access to public transport, retail outlets, schools, recreation and healthcare. Around 80% of Singaporeans live in HDB housing, which benchmarks prices to local private-sector resale values minus a discount. The HDB makes no profit, and its annual deficit is covered by a Ministry of Finance grant.

Cheong adds: “By analysing population demographic and income trends, the provision of public housing in Singapore has become a well-oiled machine. Thanks to the Government’s encouragement of home ownership, public housing today serves not only as shelter but as a store of wealth for Singaporeans. For other governments to replicate this model, they must understand that success depends on political will, not just institutions.”

Supply shortfalls

To address growing demand and improve affordability, the UK Government has set an ambitious target of 88,000 new homes in London annually for the mayor’s office. However, the city delivered just 35,850 homes in 2024. Despite a policy push, including the flexing of planning rules like Development Consent Orders (DCOs) to streamline approvals, the capital’s housing pipeline is stalling. Private housing starts have plunged to their lowest level since 2010, dragged down by construction inflation, debt costs and regulatory bottlenecks. With completions dwindling to under 15,000 units per year and a shrinking backlog of projects, the gap between aspiration and delivery is widening.

New York City has seen a steady increase in new dwellings, reaching 34,000 deliveries in 2024. The city’s mayor has laid out a bold target of 500,000 new housing units by 2032, requiring the delivery of 66,000 units a year. However, 2024 saw just 34,000 completed. Still, the city is leveraging incentives: tax credits and a $500 million capital fund to nudge developers towards affordability.

Population pressures

In 2024, Shanghai completed an estimated 127,000 new dwellings, reflecting a consistent trend in China. While affordability remains a significant issue, there are also broader factors at play like the general cost of living, fewer job opportunities and other lifestyle pressures. These factors have contributed to a population decline over the past two years. Policymakers are focusing on boosting income growth and enhancing consumer confidence in the property sector to address these challenges.

Paris averaged 40,000 new homes annually from 2000-24. With limited land and high prices, the city is shifting focus from new construction to adaptive reuse. Under its 2024 housing plan, Paris aims to convert existing buildings and reach 40% public housing by 2035. To put idle units back into circulation, there are targets to implement vacant property taxes.

An infrastructure boost to investment

These cities are far from the only major population centres grappling with the need for more housing. By 2050, the world’s 10 most populous cities will be home to nearly 374 million people – and most will experience significant population growth over that period. These growing numbers of people will need housing.

To fund the construction of homes and support sustainable urban growth, more public and private capital is urgently needed. While housing continues to attract significant investment, planning systems, housing policy and political uncertainty can deter the flow of long-term, patient capital needed to deliver at scale.

Richard Valentine-Selsey, Head of European Living Research and Consultancy, Savills, notes: “Typically a residential property development might have a five-year investment horizon. However, institutional investors prefer to deploy their capital over much longer timeframes, of 20 years or more. Delivering housing, especially affordable housing, as infrastructure with long-term cashflows can unlock deep pools of capital beyond traditional real estate funds.”

One promising solution could be to reposition housing as a form of national infrastructure. When housing is treated with the same strategic importance as transport or energy networks, it becomes more attractive to long-term capital providers. Countries such as Singapore already take this integrated view, embedding housing within national infrastructure planning alongside utilities and social services. Similarly, Austria, Denmark and the Netherlands maintain robust social housing sectors as part of their long-term public policy frameworks.

Framing housing as infrastructure also offers structural advantages. Infrastructure projects tend to carry cross-party political support and long-term government backing – qualities that institutional investors value. Moreover, this approach could reduce the cost of housing delivery, support greater affordability and help incorporate broader objectives like climate resilience and sustainability into development pipelines.

Policy innovation is beginning to reflect this shift. In England, changes to the DCO regime are streamlining planning for housing tied to major infrastructure projects. By creating faster, more predictable approval pathways, governments can remove bureaucratic barriers that often delay or deter private investment.

Of course, redefining housing as infrastructure is not a panacea for the global housing crisis. However, it is a necessary step towards unlocking new sources of capital and aligning long-term investment with long-term needs. In an era defined by demographic pressure, affordability concerns and sustainability imperatives, such a reframing may be essential for cities seeking to build housing at the scale and pace required.