Perfectly good lots aren’t being developed for homes, even though hundreds of millions of people worldwide live in homes that are unsafe, inadequate, or barely affordable, says a new report by McKinsey Global Institute. Even in densely populated New York City, the report says, one of every 10 acres of land zoned for residential development is vacant. “Unlocking land supply at the right location is the most critical step in providing affordable housing,” the report’s authors write.
Land may be cheap and plentiful in rural areas, but in the cities that the world is flocking to it’s “not uncommon” for land costs to exceed 40 percent of property prices—and they’re as much as 80 percent in some large cities, the study says. Despite the high prices that landowners can fetch, parcels aren’t coming onto the market for development because of such factors as “fragmented or public ownership, poor land records, and regulations and zoning laws that discourage development.”
Surveying the world, the report’s authors found six practices that cities have followed to free up lots for housing where it’s needed most:
Land may be cheap and plentiful in rural areas, but in the cities that the world is flocking to it’s “not uncommon” for land costs to exceed 40 percent of property prices—and they’re as much as 80 percent in some large cities, the study says. Despite the high prices that landowners can fetch, parcels aren’t coming onto the market for development because of such factors as “fragmented or public ownership, poor land records, and regulations and zoning laws that discourage development.”
Surveying the world, the report’s authors found six practices that cities have followed to free up lots for housing where it’s needed most:
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