World Cities Report 2026, 40% Global Population Faces Housing Crisis

The World Cities Report 2026, released by UN-Habitat at the World Urban Forum in Baku, Azerbaijan, highlights a deep and widening global housing crisis. The report states that around 40% of the world’s population (about 3.4 billion people) is affected by inadequate housing, rising costs, and poor living conditions, making housing one of the most critical urban challenges today.

World Cities Report 2026 Key Findings 

The report shows that the crisis is both widespread and structural in nature, affecting both developed and developing countries.

• Around 40% of the world’s population, approximately 3.4 billion people, are impacted by a housing crisis that includes affordability, shortage and poor quality of homes, as well as poor access to clean water and sanitation, 
• Housing prices are increasing faster than incomes worldwide, making home ownership increasingly unaffordable for middle and low-income groups.
• The global price-to-income ratio rose from 9.3 in 2010 to 11.2 in 2023, showing declining affordability over time.
  • The price-to-income ratio measures housing affordability by comparing average house prices with average household income.
• In Central and South Asia (including India), the price-to-income ratio reaches 16.8, indicating severe stress on housing markets.
• Around 44% of households globally spend more than 30% of their income on housing, showing rising rental burden.
• Homelessness remains a significant concern, with rates such as India: 13 per 10,000 people, USA: 20 per 10,000, and China: 21 per 10,000.
• Also, as many parts of the world struggle with high or rising construction costs, the per-square-meter costs in India and China are lower, due to economies of scale, than in Chad, Zambia, or Ghana, where construction industries and supply chains are less developed.
• Cities are expected to absorb an additional 2 billion people by 2050, increasing pressure on land, infrastructure, and housing systems.

India-Focused Findings: 

• Mumbai and Delhi have price-to-income ratios of 14.3 and 10.1, making home ownership unaffordable for households earning the median income. 
• In India’s eight largest cities, the share of affordable housing in new construction fell sharply from 52% in 2018 to 17% in 2025, due to developers shifting toward high-margin luxury housing.
• The Pradhan Mantri Awas Yojana (PMAY) has improved housing access by expanding coverage from 0.3% of households in 2010 to 7% in 2023, with around 12 million houses sanctioned to support low-income groups.
• The Ahmedabad Slum Networking Project shows that upgrading existing slums through community participation and small financial contributions can improve living conditions without full relocation or high government expenditure.

Major Causes of Housing Crisis

• Rapid Urbanisation and Population Pressure: Large-scale migration to cities and expected addition of 2 billion urban residents by 2050 is increasing housing demand far beyond supply capacity.
• Income Housing Price Mismatch: Housing prices are rising faster than incomes globally, steadily reducing affordability for middle- and low-income households.
• Market Shift Towards Luxury Housing: Real estate developers are prioritising high-profit luxury and mid-segment housing, reducing the supply of affordable housing units.
• Rising Cost of Land and Construction Inputs: Escalating land prices and rising construction material costs are making housing development economically unviable for low-cost segments.
• Limited Access to Housing Finance: Limited access to formal mortgage systems restricts home ownership opportunities for large sections of the population.
• Climate-Induced Housing Stress: Increasing frequency of disasters is causing large-scale housing losses, with US$280 billion damages in 2023 alone, mostly uninsured.

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Impact of the Housing Crisis

• Rising Homelessness: Housing shortages and unaffordability are increasing homelessness.
• Growth of Informal Settlements: Lack of affordable formal housing pushes vulnerable populations into slums and unplanned urban settlements.
• Deepening Social Inequality: Unequal access to housing is reinforcing socio-economic divides within rapidly growing urban areas.
• Financial Stress on Households: High housing costs reduce disposable income, with a large share of households spending over 30% of income on rent or housing.
• Strain on Urban Infrastructure: Rapid expansion of informal housing increases pressure on basic services such as water supply, sanitation, and transport.

However, the housing sector has major economic potential: 

• In South Asia, every US$1 spent in the housing sector can generate up to US$5 in income.
• In India, an additional  ₹100,000 in demand for residential construction generates an estimated 2.61 new informal and 0.04 formal jobs, rising to 4.06 jobs (3.95 informal and 0.11 formal) when induced effects are included. 
• This is much more than the United States, where building a typical single‑family home is estimated to support 2.9 jobs, while an average rental apartment generates 1.25 jobs.

World Cities Report 2026 Recommendations 

• The report emphasises that the state must take primary responsibility in ensuring adequate and affordable housing, as market mechanisms alone are insufficient to address the crisis.
• It recommends a collaborative framework involving government, private sector, and communities to mobilise resources and improve housing delivery.
• It suggests adopting innovative models such as pay-as-you-go housing, rent-to-buy arrangements, and community cost-sharing mechanisms to enhance affordability and access.
• It calls for expanding non-profit affordable rental housing, particularly for urban poor and migrant populations.
• It highlights the need to strengthen access to formal housing finance systems, reducing dependence on informal credit channels.
• It supports community-led housing initiatives and in-situ slum upgrading, as effective and cost-efficient approaches to improve living conditions.
• It stresses integrating climate resilience into housing and urban planning to reduce vulnerability to increasing climate-induced risks.