09 June 2021

Sustainable Housing as a driver for inclusive socio-economic development


Human rights issues are becoming increasingly important in corporate governance, and any company aiming at attracting funding as well as business these days faces questions on their Economic, Social and Governance (ESG) performance, Sustainable Development Goals (SDGs) implementation and supply chain standards from investors as well as from consumers and regulators. For many businesses in the real estate industry, it is no longer a question of whether but rather of how they address their human rights responsibility.

Ten years ago, in 2011, the United Nations Human Rights Council endorsed the Guiding Principles on Business and Human Rights (UNGPs). These provide the internationally agreed reference framework for economy, justice, politics and civil society, specifying corporate responsibility to respect human rights wherever businesses operate in the world. Accordingly, businesses must prevent their activities from adversely affecting human rights and provide remedy in case of abuse. This responsibility refers not only to their own acts (and failures to act), but also to their immediate impact on human rights with respect to business operations, goods and services – even if they themselves have not contributed to this impact. This means that all companies are required to act with human rights due diligence in all their business activities.

Companies that aggravate the competition for scarce resources – such as water, food, as well as land –, that do not address exploitative labour conditions, or ignore the rights of the local population will face difficulties attracting investors as well as clients. Especially in the context of regions with substantial socio-political issues such as the existence of corruption, or which lack official regulation, conformity with internationally agreed legal standards is an essential prerequisite for being able to show sustainability to e.g ESG investors.

Housing is an important driving force for inclusive socio-economic development, as providing adequate, affordable shelter can have an enormous positive impact on economic growth and sustainable development. In light of the disastrous consequences that the covid-19 pandemic has had on public health, economy, and the very fabric of society, it has become clear that sustainable housing must be a priority if we want to create resilient societies, where citizens live decently and contribute to creating shared prosperity and social stability while respecting the environment. Although this potential is great both in rural and in urban settings, the international community is increasingly urging public and private actors to prioritize socially sustainable residential development in densely populated areas to steer urbanization towards positive outcomes. The real estate industry can contribute to the creation of economic, cultural and political strongholds if it addresses the social and environmental challenges of its operations. If these issues are left unheeded, however, rapid urbanization can lead to increased homelessness, exacerbated poverty, and the formation of slums, with enormous negative impact on the standard of living of the local communities, as well as on the surrounding environment.

Sustainable housing does not only answer the need to provide basic services such as shelter, water and sanitation; it seeks to enhance the quality of life of the individuals, families and communities that occupy the residential units by promoting inclusiveness, accessibility, safety and security, strengthened civic participation and awareness of responsible waste disposal, energy and water management. It has the great potential to increase family income and further social inclusion by creating job opportunities for members of local minority groups, improving health conditions by safeguarding workers’ safety and guaranteeing them access to social security services, whilst contributing to community development through e.g. the use of local resources for the construction of resilient buildings and the provision of accessible and affordable renewable energy for the local community. On the contrary, unsustainable housing projects, which focus only on ecological and economical aspects may lack social acceptance and risk failing if they do not account for the importance that creating a sense of ownership and community around the residential units has on the overall success of the project, thereby facing issues of home abandonment and unsafe neighborhoods. It is therefore essential to understand the social complexities of the context where the housing project will take place, especially how members of the community relate with each other and use the living space, as well as the cultural interpretation of the home within the community. This will allow to plan accordingly, and to ensure that the development of these spaces promotes the community’s potential to evolve socially, culturally and economically.

A profound, authentic engagement with the community where the projects are based is essential to develop a human-centered project that tackles the real needs and requirements of the people, with special regard for the most vulnerable. The resulting impact on the quality of their lives needs to be measured through careful monitoring and evaluation of the operations, using indicators capable of capturing the short-, medium-, and long-term effect (and improvement) over time, and inform necessary adjustments according to the communities’ needs. These may include issues such as transit and transportation, access to jobs, healthcare and schooling, inequality, and local purchasing power. Addressing these issues is a clear and concrete contribution to the SDGs, for the achievement of which sustainable housing projects have been defined as “key”. As regards housing in urban areas, the pivotal role of urbanization for social development and safeguarding the environment has been widely acknowledged by the international community: sustainable urbanization has been enshrined in the 2016 UN Urban Agenda as indispensable for development and a prerequisite for prosperity and growth. The Group Urban 20, one of the Engagement Groups of the G20 (international forum bringing together the world’s major economies) also shows the increasing efforts of the international community to accelerate action for sustainable urban development, and to promote the role of cities as vehicle for the progressive realization of the SDGs. Besides having a very direct impact on Goal 11 on sustainable cities and communities, sustainable housing projects in both urban and rural settings can drive access to basic services, support the development of a sustainable future and contribute to mediate the effects of climate change, having thereby an impact on at least 14 of the SDGs.

Respecting human rights is not a passive responsibility. To truly work towards the achievement of the SDGs, human rights considerations must be systematically integrated into all corporate processes, including business management. This applies to the real estate sector as well.