HOUSING

AND
ECONOMICS
Ahnaf-08111840000038
Filemon Niko W. -08111840000063
M. Iffrin Delifiano -08111840000089
 Abstract

The construction and use of decent housing affects economic development through
its impact on employment, savings,investment, and labour productivity. These facts
have only recently come to be widely acknowledged. In the early post-war decades
most writers viewed housing as a social expenditure and a drag on growth. A minority
argued that housing could be an important adjunct to specific development projects,
usually in isolated locations. Since the 1970s, housing has increasingly come to be
seen as a contributor to growth, not only because house building is a major employer
with large multiplier effects but also because housing is seen to have social
consequences with diverse economic effects.
The Theory The Devil Take Housing Theory
‘Housing is a durable form of investment
of Low requiring a substansial outlay to create it but

Priority paying off little per year’

Housing In mainstream economic thinking, housing

improvement was a by-product of economic
growth; hence it could be postponed until the late
stages of development. The critics’ belief at the
time was that if economic growth and good
administration were encouraged, the housing
problem would eventually disappear.
 “There are too many urgent thins
to attend to… the problem house
building in this part of the word is
one about wich we don’t want tobe
too urgent . The more important
Sir Percy Spender, Australian thing is to help people to obtain the
Ambassador facilities to increase production and
to the US
progressively they will thereby solve
the problem housing in their own
way”
 This theory is brought from several cases of housing
The that often occur. housing in the United States is cited
as an example. there is a $ 7.00 investment needed to
Modified produce an increase in the value of 1.00 dollars in
additional housing services per year. conversely, only

Devil Take 1.80 dollars of additional investment is needed in steel

mills to produce an increase of 1.00 dollars in the
value of steel produced per year.
Housing”
Theory “if our objective is to obtain the fastest possible rate of
growth of output, and if these United States ratios are
at all representative, investment in housing should be
kept down close to the lower limits of requirements.”

• Max F. Milikan-
 The “No housing before
Modified factories”
Devil Take This began to spread in the ears of the community, the
community began to be active in finding work, and even
Housing” sustained the development of this theory. a number of
government officials have rejected the theory that social

Theory change can be ignored as a factor in economic change.

general assembly, economic and social council, and social
commission of the united states and move for social
development. Some theorists have attempted to put forward
an ideal conception of balance or order of priorities between
social and economic.
The Effect of Views on the economic significance of housing have long
been characterized by fashions, both in the literature on

Housing on development problems and in planning and practice. For much of

the 1950s and 1960s, during which development was largely

Economic identified with economic growth, development economists tended

to reject any widespread investment in housing as a meaningful

Development development strategy. This was mainly due to its supposedly high
capital-output ratio in comparison with other investments.
During the same period, housing “reformers” challenged
this notion for a variety of reasons. Initially, they justified
investment in housing primarily in social terms: conditions were
poor, and social needs were pressing. Over time, other scholars
and international agencies came to appreciate the economic
aspects of housing. They also began to appreciate the role that
housing could play in planned economic development in such
areas as employment, improvement in health and productivity and
savings.
The Effect of Housing markets and housing construction in various
economies have served as an engine of growth. The housing

Housing on sector has typically played a leading role in the process of

economic recovery from depression. This is especially true

Economic in wealthier societies, notably the US and Japan. For

example, Green’s (1997) study of business cycles in the US

Development between 1959 and 1992 found that housing leads the
business cycle, ahead of all other investments. In Japan,
Hirayama (2003) mentioned the use of public housing
activities and housing loans as a macro-economic stabilizer
to increase demand and create employment during
recessions in the 1970s and 1990s. Other countries, such as
Thailand and Singapore, have also used investment in
housing as a recovery measure . A key advantage of housing
is that it is a domestic sector, and as such is protected from
external influences. Therefore, it could be used to achieve
short and long-term economic objectives.
 While there are no accurate yardstick to measure its
impact, housing should be acknowledged as a necessity of
life.
 Housing plays a major role in stimulating employment,
direct and indirectly it activates other industries and adds to
local purchasing power
SELF-HELP ,
CORE
HOUSING,
INSTALLMEN
T PROJECT
Ahnaf-08111840000038
Filemon Niko W. -08111840000063
M. Iffrin Delifiano -08111840000089
Self help • Self-Help Housing” involves groups of
local people bringing back into use
empty properties that are in limbo,
awaiting decisions about their future use
or their redevelopment.
• It differs from “self-build housing”,
which involves constructing permanent
homes from scratch.
How to? • Self help housing groups negotiate with
the owners of empty properties for their
use and then go on to organise whatever
repairs are necessary to make them
habitable. These are normally groups of
people who can’t afford to buy their own
housing and whose housing needs are
such that they will not be offered a
permanent tenancy by the local authority
or a housing association
• The properties are often “borrowed” on
the basis of a licence or sometimes a
lease, for a specified period of time.
Benefit • Making Use of Wasted Buildings
• A Source Of Housing or Community
Facilities
• Improving Neighbourhoods
• Engaging And Empowering People
• Supporting Social Enterprise
• Learning New Skills
Problems • Too long a time is required to build self help houses
• To construct the dwellings under a cooperative
arrangement with small groups that consist of 15 or 20
families is difficult owing to the delicate job of
orientation
• An organization of engineer inspectors and
administrative personel is required
• The cost of these dwellings, especially in rural areas
does not reflect the true cost
• The need of acquiring and operating costly
construction equipment
• Construction by the families is imperfect, because of
the lack of experience
Installment • When mortgage financing is unavailable and
housebuilding is dependent wholly or partly on a

Constructio money economy, many in the less developed areas

build their houses serially.

n • The roof is usually the costly item that keeps the family
from completing the structure
• Installment building is not a new concept
• Installment building is the only way many families
without savings can get their houses built
• The installment builder needs financing to help him
complete his building, and often a small loan will be
sufficient
 Core
Housing
 Core housing is a major variant of the self-help technique. Introduced into the
underdeveloped areas by United Nations missions, it has now become part of the housing
vocabulary. It aims to provide an organised, cheap, and practical scheme for the urban and
urbanising areas of poorer countries. Since the UN missions, the idea has spread and is on
its way to becoming an important building device in the less developed areas. (Abrams,
1964:175)
Standards • The house should be a livable minimum unit which
provides a good pattern for later extensions

for Core • Construction should not depend on self-help

exclusively or even mainly

Housing • Homeownership or hire purchase should be a

prerequisite in any project, since ownership will
stimulate investment of funds and labor toward
expanding the core
• Training in housebuilding should be concentrated on
those who can devote their new skills to continued
building
Study Case
• The lot should be sufficient to permit expansion
according to one of a series of alternative plans
• Local industries should be developed to provide
materials for completing the cores
• Material used for the core should also lend themselves
to house expansion
• In tropical climates, the rooms in the house should
have openings on two sides ; the windowsills should
be low; the roofs should be built to exclude heat.