“Housing at the Center”: What the UN’s Sustainability Goals Mean for Real Estate

As the United Nations launches its 2030 Agenda for Sustainable Development next year, the organization will look to the global real estate industry for help in implementing its goals, says Rafael Tuts, coordinator of the Urban Planning and Design Branch of the United Nations’ Human Settlements Programme.

A sprawling initiative addressing issues ranging from poverty and hunger to appropriate integration of technological developments, the agenda tackles a number of areas relevant to the real estate sector, Tuts says. However, the extent of the sector’s interest in engaging remains to be seen.

“There is a lot of opportunity for the real estate industry, but so far the real estate sector has engaged marginally,” Tuts says, noting that the biggest players to date have been local authorities like mayors associations along with NGOs and research organizations.

In particular, Tuts says, real estate interests have a significant role to play in fostering affordable, sustainable, well-integrated housing, including residential and mixed-use development that is well-connected to resources like public transportation and employment opportunities.

He cites the example of Medellín, Colombia, where, he says, local government and the private sector have collaborated in recent years to reduce the city’s crime and poverty rates by better integrating low-income housing into the urban fabric.

“The city government has an aggressive strategy to integrate lower-income settlements into the mainstream,” Tuts says, noting that by using a variety of subsidies and guarantees, Medellín has encouraged private-sector development that has helped bring lower-income residents into closer contact with transit and job opportunities.

In this, the city has exemplified one of the core concepts of the 2030 agenda’s real estate aims, what Tuts calls the idea of “housing at the center.”

“That means bringing housing back to the center of cities and as a vehicle for urban development,” he says.

Another example of this principle in practice is Johannesburg, South Africa, where Tuts says the U.N. has worked with government at the local and national levels on policies for better connecting housing and workplaces—testing, for instance, incentives to encourage private developers to build more mixed-use projects.

Not everyone has fully embraced the “housing at the center” idea, however. In recent years, Tuts says, countries like China have moved in the opposite direction, adopting development and planning policies that have encouraged sprawl as opposed to tighter integration.

China “has used agricultural land as the prime source of revenue for local government,” he says. This, he notes, has led to a system in which local governments frequently extend their boundaries to incorporate rural land that they then use to raise money by putting it out for bid to private real estate developers.

“What you get are these big schemes on the outskirts, sometimes very far from the city center, and the jobs are not always connected to public transit,” he says. “In some cases you have complete ghost towns that are not occupied.”

“So you get huge outlays of investment and, yes, the private sector benefits in the short term. But in the long run, everyone loses,” he adds. “You get empty cities and no public spaces, and it’s really a loss for everyone.”

The U.N. agenda aims to turn those trends around. But the organization itself has only a limited capacity to bring about such change, Tuts notes.

“We can provide guidelines and [resources] for some relatively modest pilot projects,” he says, adding that he hopes to see the real estate industry play a bigger role as the agenda is put into action in the years ahead.

“We hope now that with the approval [of the agenda] the industry will come to the fore and be a little bit more active,” he says.