With every $1 in housing investment yielding $2–$3 in GDP, Davos 2026 leaders explore why supply constraints stifle opportunity and what fixes can help.
At Davos 2026, leaders argued housing has shifted from a “hidden” crisis to a political flashpoint because even middle-class families can’t live where they grew up. Stefanie Stantcheva framed housing as “opportunity,” citing evidence that neighborhood quality shapes children’s lifetime outcomes, while today’s financing costs intensify perceived inflation and “economic anxiety.” Shortages also fuel a “zero sum mindset,” especially among younger urban residents, with destabilizing political spillovers.
Romania’s Minister Dragoș Pîslaru described why housing lags on agendas: fragmented responsibility, siloed institutions, and muddled categories (social vs. affordable). The EU is now responding with a European Affordable Housing Plan, noting a gap of 650,000 homes per year and €150 billion in annual investment needs, alongside permitting simplification, new financing rules, and action on short-term rentals. Romania is testing delivery at scale using renovation vouchers up to €25,000, aiming for fast-tracked upgrades completed in months.
Mark Rose emphasized execution, not ideas: planning and permitting delays can stretch from weeks to five years, making projects unfinanceable. Lars Petersson argued technology is ready and retrofit potential is large, urging action: “This is not rocket science.” The shared conclusion: solve housing through targeted incentives, faster approvals, and public-private coordination—because the private return alone won’t capture the social return.
Good morning. I'm Jonathan Reckford, CEO of habitat for Humanity International and delighted to be with you in the room and online. Thank you for joining us today for a really important conversation about housing. I was in a session earlier this week in the icebreaker was, what's the one thing that you're very passionate about that we aren't talking about enough? That's really important at Weaf, and I was delighted that it wasn't me that raised the issue, but others and housing, as we will talk about, is so interconnected to so many other pieces. And it's been amazing to me how invisible it's sometimes been in many of these gatherings when you talk to people on the street. Certainly it is a first order issue now. And I would say now that we've had an invisible housing crisis globally for a very long time, it's now become a visible and political issue, I would argue, partly because middle class families, children can now not afford to live in the communities in which they grew up. And so that has has moved it. As you'll, as we'll talk about, housing is so fundamental to health, to economic growth, to education, to livelihoods, and really to social cohesion as well. And so we have a gigantic supply chain challenge. The last five years have really been a perfect storm of pushing all the indicators for housing in the wrong direction from a cost perspective. And I'm thrilled. Today we have a wonderful panel that brings multiple perspectives to the session, and I'm so delighted to introduce, in order, Minister Dragos Pislaru, who is the Minister of Investments and European Projects for Romania. Minister, thanks for being with us. Mark Rose, who is the CEO of Avison Young, global housing information and consulting firm. And I encourage all of you to look at their incredibly impressive backgrounds, which I am not going to go through right now. Lars Peterson, who is the CEO of Velux, Danish, housing products manufacturer leader, and Stefanie Stantcheva from Harvard, a, an award winning economist who is focused on many of the social impacts of housing. So thank you all for being with us today. I was struck, small anecdote. I was in a in an expensive part of the US, a mayor who had totally gotten religion and had basically got up and did a mea culpa, said I was missing this. I am all in. We've got to build more housing and we've got to break through on building more. And afterwards I said that was terrific. What changed? And he said, I've got to get my kid out of my basement. It finally became personal. And so, I think the, you know, part of our challenge is how do we take this general issue that everyone agrees with in concept and actually turn that into practical solutions that increase the supply of housing? And so I thought we might start actually with Stephanie, who has done a lot of research in this space, not only on the technical side, but the social side of what are the challenges. So, Stephanie, over to you.
Yes, that that's a really, really great question because housing is not just housing, not just where you live, but it has really big economic, social, political consequences. So let me go a little bit in that order. Let's start with the first one, which has been studied by so many people, which is that housing is really opportunity and creating, moves to opportunity, which is a program in the US, is really a way to get people, you know, into the higher income and social ladders, and especially matters for young children. So the research shows that where you grew up, down to the neighborhood level, will really influence your trajectory later in life. So if you move early on in life to better neighborhoods, you're going to do much, much better in terms of earnings, in terms of education, in terms of health, in terms of social outcomes. So it's incredibly important. And doing it a bit later, when children are already in their teenage years, is less effective than when they're really young. And for adults, there's barely any effect anymore. So it is a really important, you know, really important economic and social policy to get people into the right neighborhoods and housing supplies and constraints in those neighborhoods are major bottleneck to this. The second big implication of housing, especially right now, I mean, it's been something more permanent. But right now, with the inflationary episode that we've seen, housing costs are really feeding into the general economic anxiety. So we see this very clearly in the research that we do at the social economics lab at Harvard, where we study how people think and reason about economic issues and economic policies. And inflation has been weighing incredibly heavily on people's minds. And housing costs are actually not really captured well in our baseline inflation numbers. In the headline numbers like the CPI index in the US, you don't see mortgage rates, you don't see these financing costs that are very top of mind for many people when they're thinking of, can I afford a house? And so people perceive an inflation that is larger than the headline numbers for good reason. And this is very much weighing on the economic anxiety. And the final thing I wanted to say is that this has a very big spillover on politics, too. So housing shortages create something that we call the zero sum mindset. It's this belief that if a group or individuals gain, it must come at the expense of others, and that the world is a fixed pie. If you get a larger slice of the pie, I must be getting a smaller slice. And we show that this mindset is very prevalent among people in urban areas, where housing constraints are particularly prevalent and among the younger generation. It's absolutely striking in in the US and other rich countries, Germany, France, the UK, the younger generations are significantly more zero sum than the older generations. Again, they're facing the largest constraints in terms of housing competition. And this has big implications for politics and the policy views that that you will have this year some mindset. So housing has a lot of economic, social and political consequences.
Thank you Stephanie. So important. You know we actually know the data is so clear. Mixed income mixed use is the best model for everyone. And yet our cities are increasingly going in the opposite direction in many ways. And so it is. Minister, I want to come to you because in so many ways, maybe because it has gotten so bad, we're starting to see movement and opportunity. And the EU, for the first time last year, put together a major effort in housing. You have been deep in the middle of that, both for Europe and for Romania. I would love to have you build off of what Stephanie said.
Yeah. So so first of all, I mean, the question is if it's a topic that has so many implications, why it hasn't been, you know, the top tier priority in the political agenda. And there are several reasons for that. I mean, housing is a complex issue. And, you know, politicians had some trouble in tackling complex issues. We need a holistic policy approach. And that was actually missing. There is a fragmentation of policy in the sense that a lot of people consider that housing is a local responsibility, and it's not I mean, you need a national framework. I mean, that's that's a critical thing to do. Second, you have a silo institutional structure. I mean, housing is the, the, the direct responsibility of whom at the national level or federal level? I mean, is it about social service or it's about education for student housing, or is it about housing as an economic tool for growth? So so that actually created problems as well. And then of course, also conflicting legal categories, social housing, affordable housing, which is the more recent concept, you know, the different types of housing. And then we are assisting right now at a global shift. People realized finally at global level, OCD. Certainly. And I will say that throughout the globe as well, and in the EU, because I can talk more about that. We finally, after some exercises of thought with our EU, with, the renovation wave, we finally, first have the for the first time ever, a commissioner on housing, Dan Jorgensen. And that's very important. I mean, again, Denmark is on top of everyone's mind these days. We have a Danish commissioner on housing. And basically, there was a very clear study suggesting that the EU as a whole is lacking. There is a gap of 650,000 houses per year, per year. So we need an annual investment in Europe just to go towards, you know, solving this issue. About €150 billion per year. And now we have this this plan, the European Affordable Housing plan was launched on the 16th of December last year with this very ambitious aim to to push the agenda forward with the, you know, very clear four objectives. So first, boosting supply, which is a natural thing to do. Second is and simplification permitting and everything that goes on that. So regulatory things like but I think that we're going to talk about bottlenecks anyway. Second is about financing with an important role of EIB and also redefining state aid because so I mean, so far, member states were able to invest in social housing, but now we have this concept of affordable housing that is also for the middle class, not just for the vulnerable categories. And then the third part is support and reforms. I mean, here, you have this kind of very, very political hot potato, which is short term rentals. And we all know, the discussions about that, and also about the market speculations. And we've heard President Trump, talking about that. So this is an issue that it's on both sides of the Atlantic. Finally, something that unites us. Right. And last but not least, it's about protecting vulnerable groups. I mean, as former minister of Labour and chair of the Employment committee in the European Parliament, I have been working on that. I mean, how do you fight homelessness? We do have epoch, which is a, you know, fighting homelessness platform at EU level and then student housing and all the other things. So we have right now a strategy. We have a plan. There will be the first ever summit on housing during the Irish presidency. So next semester at EU level. And this is important and some of the things that have already been adopted are implemented in the member states. So I will just finalize, this, this line of thought by saying that in Romania, we use cohesion policy and the recovery and resilience plan. So two instruments of funding instruments from the EU that have been reshaped and redefined to allow investment in housing to do quite a few nice things. So we are right now, for instance, having deep renovation projects with vouchers that are given to households, which allows scalable delivery, because that's actually the problem. One thing is the policy. Another thing is really delivery. So we are right now piloting, with a €270 million, this kind of household implementation with these vouchers that go up to €25,000, and they have a component of deep renovation and then energy efficiency with solar panels and heat pumps and so on and so forth. And it's really attractive. I mean, the demand was surging for that. So this means that this is a scalable instrument. And the last thing that I want to say is that, truly in Europe, we need to go from EU recommendation to European delivery. And, you know, this kind of commitment that we realize how important this topic is for economic growth, avoiding social fracture and of course, political leadership in the future. So that's my first take on on the topic.
Fantastic. Thank you so much. So much to unpack there. If you think about pulling those together, you know, thank you for raising the qualitative piece because we've got 1 in 3 people in the world and especially as we think not just global north but global South, 1 in 3 living in substandard housing conditions. And a lot of that is, is qualitative as well as quantitative. So we need more housing, but we have a lot of poor housing that can be renovated, especially in Europe.
And it's cheaper, it's faster, and it produces, I mean, the impact of these kind of programs to, to, to just be able to go to standards is amazing. And when I was negotiating the repower EU at EU level and now implementing in Romania, the whole point is that the the easiest way to reduce the energy bill, for instance, is to do deep renovation and energy efficiency things. And we need to to think about that. So new houses of course, but renovation and rehabilitation of.
Existing I love that I have very quick anecdote because we've done it in Eastern Europe. We found so many families still living in former Soviet era apartment blocks that were terribly energy inefficient, and they were privatized, but with no common area reserves or with any homeowners associations. So no one was responsible for for care or maintenance. What we found, and we're doing this in seven countries, is if we went in and invested in creating a community in a homeowners association, once we had a functioning homeowners association, we can lend them the money for the energy retrofit, and they can pay it back out of the savings and energy. I mean.
It's I would just add the fact that there are very many innovative practices and maybe we can talk about them. I mean, right now in Romania, we have actually finally launched the financing and the policy for energy communities, which of course encourages renovations as well and increasing energy efficiency. So, so this kind of policy, community based policy, as you mentioned in the beginning, I really, really crucial. And just also as an anecdote, I mean, yeah, we do have those block of flats, Russian style, but right now with the Bauhaus style thing at EU level, they are becoming fashionable. Well, if you renovate them and you make them.
If you make them more livable.
Exactly.
Yeah. Thank you. Mark, I want to come to you. You see, you've got data from around the world, which is really valuable talk about, you know, we have lots of solutions. It's not an idea problem. But how do we move that? What is stopping us from actually executing and building more housing.
So do we really have solutions? It's so easy to identify the problem. It's so easy to talk about and have great people with the right intentions, very smart people to write on and come up with. How are we going to address this very significant issue? And then we run into the same problem over and over and over and over again. And it really is a complex situation that if simplified, I think we have a better shot at dealing with this. So you're right Jonathan, across the globe. First things first. Let me just say some countries are doing it well. Some countries are not. That's goes for anything. You know. You know, you know at the moment the politics of housing and I don't know how we got here has made it almost impossible to move forward. Now again, any particular country or city or state or province can say, well, I'm doing something great and probably are. But in general, the politics of housing is something that we need to go from theory to action plan. Obviously if we knew interest rates were coming down or interest or lower interest rates were available to help this situation, absolutely be fantastic. But you know, in the UK it still takes about five years to, you know, to get through planning and permits New York City for years to get a permit. Canada, 3.2 years on average from or. And then you have some southern states in the US, and you'll have some Midwestern states where the mayor will bring the permit out to you in weeks. So how can you have such a disparity in intent and effort and then get stuck in this period of time, which is more cost and doesn't help the situation? So, you know, your first anecdote? Yes, I actually believe and it's weird, but I could see a mayor sooner doing something to get his kid out of the house than actually trying to solve housing problems. Jonathan and I just want to say, I don't think you've ever seen a panel where the two of us weren't together. It's in our contracts. But we did one on Yimby as well. So there are there are communities who want to get together and build private and public sector private, you know, public private partnerships and actually grow and actually solve this problem. And then we also have the others, okay. And that's where we really need to focus, because this panel and this is an incredible panel, we can give you every reason why this is important. Right? I almost don't think there's a doubt anymore or you can't really defend that. We have again towns, cities, provinces, states, countries that are in dire need of housing, no doubt. I think we need something like 1,000,000ft² of housing built every day, starting now, to accommodate. But if we're not going to push through the bottleneck, and the bottleneck is this combination of, well, why should I or shouldn't we look at or I really can't get to this now, or we have a process when we have an emergency in low income housing, we have people who are taking notice of workforce housing because folks are saying, wait a second. Nurses, doctors, policemen, firefighters, they're having trouble getting housing. Yeah, yeah, they really are. What? You know, we can't let that. But you don't really want to look at the low income housing, which I think is at, just incredibly catastrophic phase right now. And so pulling all of this great work together and the great speakers. And that's why, listen, when this panel and getting us up here to talk about it is that first step, right. Getting to action plans, I would just kind of beg as we talk to the public sector and the private sector, the right returns with the right incentives, with a program and a process that is efficient, including not just building new houses. You know, we've already said it already, but retrofitting in blighted areas. There are homes sitting there that people could inhabit. It doesn't take that much to renovate them. So you have this entire stock. Why isn't any of this done? I hold out great hope, but the answers are sitting in front of us. We actually have to execute on them now.
Thank you Mark. It's and I want to circle back as as we move from bottlenecks to where are we seeing movement what it takes I do think it takes local takes state or county and takes federal in every country to actually move it. When you deal with the land and policy pieces. But some are moving and I think, you know, you look at I was just in Austin, Texas, we're doing a lot I think they permitted more housing than all of Southern California. So those differences are real in terms of movement. Lars, let's talk. We've talked about, the how but we don't talk much about how we build. And I think some there's some views that, my gosh, building houses looks a lot like it looked 100 years ago and 50 years ago. What is not quite true, though, is the building materials have changed significantly in terms of performance.
Absolutely. But I like where this, this is going. I mean, it's action oriented, right? I have a saying rather a speeding ticket than a parking ticket. I think it's true on this one. Also, we rather do something and maybe do a couple of mistakes and learnings and move because the needs are obvious. It's fact based. And it's important for the younger generation, even for demographics. So but let's give me a couple of examples. We did a study on Germany. Germany can be identified with 429,000 more houses, house living places, using existing structures, talking about retrofits. Okay. So and if you go and you look permit and economic viability because not all places are economically viable to renovate, it goes to 270,000, but it's 270,000. New living places can create it in Germany alone by retrofitting and upgrading. What's preventing. Well, if I was running a city, I would jump on it because it's also my city being competitive versus other cities, or my countries being represented against other countries. But that's for them to solve. But there are a lot of bureaucratic hurdles, but the technology exists. This is not rocket science, and we can build healthy buildings, affordable buildings, and to be more concrete and take it down on a micro scale. Next month we will launch in February and you're welcome. If you can make it, a project in Morangis in France, which we call Living Attic, and we have renovated a very standard 100 square meter house and brought it into 135 square meter house, which makes a big difference for the family. On the same footprint, we reduce the energy consumption with 70%. We reduce energy bill with 60%. It becomes six degrees cooler during the summer, which matters a lot, without any air condition, obviously. And it's also just a more healthy building. And the family is proud and the children sleep better. And and it's also increased the value of that house with €70,000. So it's also very financial. I mean, sorry, that's not even a word. Sorry. I was just talking to speak to a financial community. If anyone's listening to this, it's a good deal. It's a good deal. So we why do we do that? We do that together with partners just to show that it can be done. It can be done with current technology. Basically, we will do another one in Eastern Europe around the corner because there's plenty of very typical it's not always Soviet blocks, whereas also individual houses.
Absolutely.
And we just want to show that it can be done there too. So my point is just that, we, we have a technology, and, and if people understand that it's, whether we're running a country or a city or a community that that is actually needed to be competitive, because others are moving. I just coming from another meeting here and people are moving in India, in Malaysia, happily in the global south Lebanon. That was an example. So of course, we as European, we talk a lot, a lack of competitiveness. This is a this is important for Europe just to stay competitive.
I think it's a visceral issue. Thank you for for pointing that out because we're now seeing historically affordable markets are one of their value adds was come here because housing is relatively affordable. You can you can have a workforce that can afford to live here. As that shifts, that actually becomes an economic disadvantage. And I think we're seeing now politicians recognizing that this is an economic imperative and that's starting to maybe create the space for change. I do think you need catalysts, and it's how do you unlock that value? We've been pushing we have bipartisan support. It's like Congress is not functioning the way we would love. But something called the Neighborhood Homes Investment Act in the US context. And it would try to solve a dilemma for these undervalued homes. There are parts of cities in many cities that are undervalued, historically marginalized. You can buy a house for a small amount, but by the time you invest in retrofitting it, it won't appraise for what you've had to put in to buy and to upgrade it. This would be a federal tax credit that would actually close the gap. If you sell to a low income family, it would put hundreds of thousands of houses back in circulation, create value and create. You know, I think there are mechanisms, but it usually is a math issue. How do we ultimately get catalytic work? It's good to see the EU stepping in and funding. I think there are a couple of significant US bills on both the Senate and House side starting to move, because there's probably going to have to be some level of federal funding for the very low income families. When you look at the gap between what it costs to create retrofit a unit and what families can now afford. And now we've got insurance as a next crisis. Let's broaden now, I'd love from all of you, Minister, to jump in what's what's working? Let's let's tell some stories of how do we make this happen.
Exactly. So, so I mean, I would just like to, to give to perspectives what's because it's useful to look at what's not working as well. So, I will simplify a lot. But I will describe the traditional model of social housing in Romania. That is actually mobilizing or incentivizing politicians to act. So in our country, the idea is that, you will give money to a mayor, and the mayor will build, you know, houses, usually through a procurement that is not necessarily very transparent on the market. And then it comes the fun part, kind of lack of transparency. How do you allocate those social housing. The criteria that are kind of volatile discretionary policy on that and creating lack of trust on how those houses are allocated. They are sometimes, you know, allowed people just to stay there with, you know, paying rent. And then suddenly in a number of years, they are allowed to buy them and again, discretionary prices and so on. So nothing to do with markets, a lot of discretionary power, a lot of, you know, nice TV moments where they are actually, you know, cutting, the nice red ribbon, and showing we provide houses to the people. But in fact, I mean, lack of transparency, lack of trust, and certainly not good business. So that's what is, one of the things of, of not, you know, how not to do things. I mean, it's true that this is action. I mean, they are building houses. But I mean, I think that there is time to shift from that to a system where first you leverage private sector. So you come up with financial incentives and instruments on that. Second, you simplify things. I mean, you the bureaucratic things and you simplify things. You know, again, this practice of using vouchers for us was it's very effective. And just to give you the value of the ticket, I mean, we are able to do deep renovation on those houses with €25,000, which is a really good value now by the fact that we are not actually funding it from what is the equivalent of federal or state level, but involving local authorities as well in the process, then the permitting is fast tracked. So there is not a problem with that. So we can actually have those things done in 3 to 4 months, which is, by the way, something that if even if I will actually start to do it on my own, I don't think that I will do it, you know, by far faster. So I think that this is amazing. And then scaling and having this kind of things is really useful. So I mean, the two examples are at the opposite of one another. So in the in the first example, you give the money to the public authority. The second example, I'm giving the money to the building company that is actually part of a larger framework company where I'm having I had like 25 construction companies throughout the country that are registered, registering, you know, this kind of vulnerable households or, the need for affordable housing and then the local authorities on the loop, but they do not decide who is actually doing what and with what prices. So this is actually, how to avoid a little bit of the bottlenecks that we are talking about. There are many models. I mean, the social impact investment model. I mean, also in France, I mean, there are things going on there where they are renovating the the houses and then, they are getting paid through the difference in the energy bill. I mean, these are things that are going on. So I don't think that we need to reinvent the wheel. The practices are out there. The only thing is that most of them do not have a direct incentive for politicians. As the one like, I like to build a house as a mayor and into the citizens. So the whole point is, as a politician as well, are we ready, the political class to move to the next level where we focus on impact? When we focus on the fact that houses are about people and, you know, really delivering to them and not necessarily taking credit for, for for that in a very direct way.
Thank you. Stephanie, I want to come if you can connect that to Mark's comment, who's who's breaking through? Because not in my backyard is a bipartisan alignment, in much of the world. So what is helped to actually create acceptance for the model we know would work better?
So one thing that we spoken about a little bit is to actually not build new houses, but revitalize houses. So that's been working very, very well and has a lot of support. It's in everyone's benefit that neighborhoods look better. And actually, my colleagues at Harvard have been doing amazing work with programs in the US that take neighborhoods that are really, you know, really in dire shape, revitalize the buildings, the community, have people move in there and again, show that children who move in there with their family are going to do so much better. And so that's something that is, I think, very promising because it uses what's already there and just really underutilized, really substandard. And that's, I think, a very, very important type of programs that can generate a lot of support. The other thing I wanted to to say as well is that it's a little bit in this indissociable also from the issue of public transportation. So in many big cities, one way to make neighborhoods more desirable is to connect them better to the rest. And public transportation is an issue in many places. So I think, you know, yes, in some small medium sized cities, you know, in the US, the car will always be for a long time the main, the main way of going around. But for big cities that are expanding, I think a way to when we increase housing supply, public transportation has to be a major part of the of the discussion.
I totally agree. And but also value capture with the public transportation because if you don't, Seoul has done a good job. Hong Kong has been really creative. I think there are cities that have, as they've expanded transit, figured out how to create mixed income housing with that Seoul, you know, tripled in size, but they grabbed a third of all that land for housing as they put the train systems down south, as opposed to all of that value going, to the individuals on the way, it allows you to have a view on that.
No, it's just to build on that because we've seen some of our customers. I have an example in mine in UK where they also they don't just build housing and then you need a transport and you need to go somewhere else to job or to school or to shop, but they actually try to build a community so you have less need for transport. So instead of this kind of dead sleeping city where you have to go somewhere else, you can actually live your life or to a greater extent, live your life around where you live. And I just think that's also an important aspect, that it's not just a building, a sleeping place, so to speak, and then everything else is somewhere else. But try to build communities.
And it's a huge win. But it's been hard to do because and sometimes I think we talk about the 20 minute city, the 30 minute city. Unfortunately, it becomes a 20 or 30 minute city only for the economic elite and leaves out the rest of the city. And I think somehow we've got to we've got to break through that mark who's who's doing it. Well, yeah.
You know, again across the, you know, across the world, you'll see your cities in the UK, you know in the regions doing it. Well I don't think that London is doing it well. Right. I just think it's stuck. You know in the US again, you'll see, as I said earlier, kind of the southern states are doing it or, or some of the red states are doing it better. But there are, you know, there are some blue states that, you know, are there. Jonathan, it's really getting away from this. And, you know, you know, if we want to get to the the action piece of this, the, the oversimplification, then you find the, you know, the governmental bodies that understand, okay, if we bring interest rates down, which again, in the real estate industry, we all love that. But if you bring them down, you're going to siphon off because people are going to want it to go to data centers. People are going to want to go to office. People are going to want it to go to industrial and retail and everything else. So there has to be specific work and where local and federal, bodies are making sure that there could be targeted programs for interest rates, targeted programs for some sort of subsidy. Okay. We're seeing this work. And if you just leave it out there as a well, you know, it's part of a bigger ecosystem. Yes, it is, but but again, it's one of the reasons why we're, you know, we're not making progress. So a long way to say those who are focused, the private sector needs to understand that certain parts of affordable housing, that you're just not going to get the same returns, and therefore we're going to need the public sector for incentives. Those incentives where they have been targeted have done extremely well. And everything else is a little stuck.
No, it's I think that's really important. I think sometimes and it has to be multi-sector. I think sometimes it's like, let's beat up the developers. You know, the developers are going to need to have their projects pencil. It's really hard to do that right now. That's why we keep building supply at the high end of the market, because that's where you can make a return. You know, I used to think of carrots and sticks. A friend of mine, which I really liked, said, no, it's not that. It's a two by four in cake. So you're going to have to push a developer, but there has to be a big cake at the end, because otherwise they're just not going to build. And whether nonprofit or for profit. And if we need a lot more building, it's going to be a challenge. Our you know what, let's give some inspiration. We're going to we're going to come to the audience in just a minute. So be thinking about your questions. I would ask gently for not speeches, but questions because we have very little time. And maybe we'll grab a couple and and circle back. But but connecting these who you know, as you look around the world, the megatrends are tough. It's easier to admire the problem. Climate change, rapid urbanization, mass migration, all of those are gigantic housing challenges. And we can't stop people moving to where the jobs are. So in some ways, it's a mismatch, too, of how do we get more housing where people want to live because that's where they can they can find jobs. And of course, that's going to be more expensive, you know, from either the research side or the practical side. You know, when we think about the gap, who's, I'd be interested in, it's easier to think about cities sometimes than whole countries. But are there are there cities or states around the world that have really other than Singapore, which is a unicorn, that are, that are doing this? Well.
I mean, I would just jump in by saying that urban planning is actually key. And you may have in in one country, different, approaches to urban planning, even though, I mean, say, the regulations are almost the same, you know, so you have this case, for instance, when you would allow, people to build houses in a kind of an eclectic way and, you know, you allow the developer to try to maximize the use of space, you know, putting houses in a very narrowly, fitted, way. And then you have the other style that is, I think, the best practice when you will more or less constrain the developer to come up first with the utilities and everything, and then, you know, the houses and the end and not the vice versa. Now, of course, for maybe more structured societies, I'm looking even, you know, at the UK because the urban planning was a strong, point there. I mean, maybe these are some common practices, although I think lately there were some, you know, misdirections going on there as well. But what I can try to say that from, from an Eastern Europe perspective, where, you know, there was a freedom interpreted as a maximum in terms of urban planning that caused a lot of problems in terms of also the value of housing and the speed of doing it, and then the whole point that you first build a house and then you ask the city hall to come up with utilities to that. I mean, and then it creates a lot of bottlenecks. But so urban planning is key on that. So you need somehow a vision how to develop it. That's why you need a holistic approach to housing. Housing is not just to solve, you know, direct problem for the, for the president is to imagine the development with all the functions there. And it's very important to understand that this is not about, you know, space, this is about the functions that you put there. And you have been touching this particular topics there. Last word on it. I just want to say that right now, I think, in the EU, the kind of resources that we seem to, to, to, to mobilize are providing a lot of, you know, best practices. And one of the things that we are trying to do in Romania with EU instruments is to move more and more to what is known as trial and adopt. So instead of saying, we are going to put all money into a pot and, you know, having these instruments, we are actually experimenting with different type of instruments. And this is, I think, very useful because it gives us, you know, feedback on what is working and what's not. And then leveraging the private sector is very important because finally we can have some direct feedback from them. So I think it's a good thing to to do in the next period.
I think, you know, agile, which often is not the first word one thinks of, of EU. But but I think that's really important. And I loved your point around the planning because so many cities now you can see it. They didn't plan for growth. Exactly. And, you know, I think moving from the model to your earlier point that the city has to build the housing versus we're going to plan and allocate land for housing, then the market can create the housing and do that quite effectively.
Absolutely. Yeah.
We have a couple of questions. Let's take actually both and then circle because we're going to rapidly run out of time. Yes sir. And tell us who you are.
Peter Davis from Auckland in Auckland, a bit of a. Oh, that's a good idea. It's a bit of a breakthrough has been the acceptance that you can do build to rent as an asset class, you know, so that, for example, pension schemes are now saying, well, hang on, we can have long term tenants, we can build apartment blocks because we, like Canada and the US are stuck with the single story thing. Everyone wants a little block of land with a single story on it, and we just have just just started to break through to apartment blocks, which become an asset class. And I just think that might be one way of breaking through the Nimby thing. As long as you can get acceptance of it because it becomes a financial asset.
Thank you. That's a great comment. And and I do think, you know, there are no magic bullets. I think we need all of these, all of these answers. But I do think Bill Durant that is increasing supply as opposed to just reallocating existing supply.
Thanks for the floor. Lucas Kistler, I'm a politician and architect from here in Switzerland. And,
Very affordable place.
Very affordable place. Yes.
So I was happy that you identified the also the quality aspects of, of the built environment and especially the social qualities, because I think that's really important, because I think, there is actually, the thing that we, where we can build great communities where people thrive. But I often see the problem that especially with investor driven housing, that when it comes to building for social, qualities, that they often see higher costs up front and that they're not easily convinced by, by those, that are not easily, easily convincible. So how can we measure kind of the, social quality that we have kind of hard numbers to, to convince the investors?
Yeah. You know, pricing properly is such an interesting one, Stephanie. They may come to you on that because I do think, we undervalue some of these other pieces. But they have other costs. So in fact, when people have better housing, we spend less on all these other dimensions.
I'll be very quick. But as an economist, you know, there's the private return of an investor and there's the social return. And we can't actually expect the private market to internalize the social return. So that's the job of policy, to, to set the right incentives. So whether it's through tax credits, additional subsidies, when there's a higher social return than the private return, that's that's what economic theory would say. Unless, you know, people internalize the social return because they have a nonprofit motive or a foundation, in which case it could work.
So we're going to go lightning round because I want to give each of you a chance. Go ahead. Mark, sorry.
Just one quick anecdote. Probably one of the most horrifying things that I've been involved with over the last five years is talking to Sovereign Wealth Fund, who could very well have helped their own country. And we had the conversation about what you need to do and how you need to do it. And the answer was that the investment committee couldn't get it to pencil out because they need everything at a at a minimum, at a minimum of 12. That is not how we're going to address affordable housing.
Thank you. And let's, give the floor to you. We are down to our last two minutes. So what's the thing you most want our audience to take away as they think about fixing this big problem.
When it comes to pricing, I just want to underline the fact that we are talking about the whole value chain. It's not just developers. I mean, we are encouraging a lot entrepreneurship, and, you know, coming up with new materials, new solutions that are going to, you know, have an impact on pricing as well. Second is traditional tools where, you know, this kind of subsidies and directly going to loans and so on that were not very effective right now. Targeted policies that goes to, you know, interest rates or coming up with leverage on the private sector are much more efficient. Last but not least, again, I'm really glad that Romania is creating a momentum as part of the momentum in Europe, which means more business. That means more return globally. So I mean, this is attracting the size of business. The kind of the fact that you have a multi-year plan is attracting business and creating a momentum to to have, prices dropped and then have a social impact as well. So you cannot just manipulate things because, you know, you can't do that, but you can go on the value chain. You can you can create a larger market. And then with permitting and reforms, you can even, you know, unleash basically the potential that is there with, social and economic returns and political as well. But that should be the last objective. In in the roast.
Thank you. Mark.
Great strategies out there. Brilliant people who are writing and talking about how to address this. Issue. Simplify it. Get to action plans. Action plans need to be targeted and we will get something done. I could speak an hour on this. You need to target. You need to simplify this thing.
Very good. Lars.
Well, it would be so. The technology is already there. This is not rocket science. Speaking for the built environment, we can solve this. So. And the best buildings are often the building already existing. That's true for the Western world. Of course the global South is a little bit, duality needed of course. But be demanding and there is no conflict between quality, sustainability or cost. It is just a knowledge question. So if you have a time and the knowledge to prevail, you can solve the equation. You don't have to choose between sustainability, livability or health and cost. Technology actually already exists. Perfect.
Stephanie I have 10s nine now.
All right.
All I'm going to say is that this requires both the private market to do a lot, but also the public sector. So it's very much a private public endeavor.
So we need multi-sector solutions. It is going to take all. I would gently say that I do think the tech is there, but we need to price it in. So if you actually think of housing more broadly that you need a physical structure, but you need also access to transit, you need, insurance, which is becoming a gigantic challenge. And you need to pay your utility bill that allows you then to go down that materials curve faster. I want to thank Stephanie, Lars, Mark, Minister, thank you all for being part of the conversation. I would argue this is the most urgent issue if we want to have economic growth, political stability and, human cities in which families can grow and thrive. So thank you for being part of it. And that will conclude this.
Thank you. Thank you.