CAN THE GLOBAL HOUSING PROBLEM BE SOLVED

CAN THE GLOBAL HOUSING PROBLEM BE SOLVED?

This is the finished house. 1000 SF. Stone floors, tile roof, adobe walls. Cost: $300.

Built with Local Resources. We have emphasized the use of local resources and local self-reliance. Surely there must be other solutions.

Specialization & Efficiency. As you may have noted, there were lots of inefficiencies in this process. A lumber mill can produce lumber that is more precisely cut and can produce it much faster and cheaper. A modern kiln can fire roof tiles of higher quality and produce them more efficiently using less energy and less labor. Other kinds of roofing are cheaper in the industrialized countries than clay tile. These people were not professional builders, tile makers, loggers or mill wrights. They were not specialists. They are farmers, and uneducated ones.

Wouldn’t it have been better to have them focus on what they already know or on some specialty? They are inefficient at some things. Wouldn’t it be better to have them focus on what they can do efficiently, for example grow coffee, sell that and buy what they need from efficient producers of those products? Why didn’t we do that?

Terms of Global Trade.

The answer is rather simple. The terms of trade internationally are such that this is not practical. The products of the developing countries and the labor of poor people in those countries is assigned a very low value in relation to the products they would like to buy from the industrialized countries.

For example, in 2001, it took 3 tons of Guatemalan coffee (1500 man hours of labor) to buy 1 personal computer.⁴ 1500 man hours in the U.S. at only $7/hour ($5.15 is federal minimum wage) is $10,500 for a personal computer.

Sources:

4. Global Exchange; www.globalexchange.org. 12/12/03

In 2000, it took 3.5 tons of sugar (at $0.052/lb.) from Cuba to purchase 10 barrels of oil. The same amount of U.S. produced sugar (which is subsidized for production in the U.S.) will buy 49 barrels of oil.5

5. Shmitz, Andrew (2003): “Commodity Outlook 2003,” UFL Institute of Food and Agricultural Science.

Even though they are inefficient at producing many parts of their housing, the terms of trade are so heavily weighted against them that it is more effective to simply make what they need themselves.

I recently did a search on the internet under low cost housing. There were a bunch of solutions offered: a prefab steel house for $8000, ready to ship anywhere in the world, and others. Although these buildings are cheap, they are completely useless under current circumstances. There is no way these people can afford these houses, they don’t have the income and they can’t trade their products for them.

What other avenues of solution are there?

Change the Terms of Trade. One obvious one is to alter the terms of international trade. If the developing countries could get more for their products or more for their labor, they might be able to afford to buy enough of our products to meet their needs in housing and elsewhere. While this is a good solution and may ultimately be the best solution, it was our conclusion that this is a much more difficult path, that it is a much slower one and that the resources to pursue this solution are farther from our hands. Every developing country would like to change the terms of trade. In general they are unable to do that. However, to proceed with our solution, based on local resources, all they have to do is decide to do it.

Charity. These are poor people. It is rather spontaneous in the U.S. to think that problems of poor people can be addressed by charity.

However, considering that the $211,000 billion housing deficit is 99 times the entire U.S. National Budget and 11 times the world GDP, the problem is clearly beyond the scope of charity. It is simply too big. The impact of charitable contributions are negligible. (Also they are not a sustainable solution).

There are some other problems with charity and with bringing in a solution from the outside. In our experience it can take away attention and resources from the more feasible solutions (which are may seem to be tougher and entail more work).

I’ll give two examples from our experience. In our Nicaragua project we had connected with a dairy cooperative in the Northern mountains that was willing to undertake our experiment and try to produce houses for themselves. This required their allocating a certain amount of their labor away from the dairy and into construction. However, about the time that we were ready to start some NGOs were talking about trying to help with the housing problem. They were going to bring in some prefab houses and give them to people in the region. The members of the coop thought, quite logically, “This housing with Groundwork is going to use a lot of our labor. It makes more sense to wait for these shiny new prefab houses that won’t cost us anything.” So our project came to a halt. Since the number of these free houses was very small relative to the housing need in the country, it was obvious to us that it would be only coincidence if the people we were working with were to get them. They didn’t get them for quite a while and eventually the coop concluded that they weren’t going to get them. So eventually they decided to proceed with our project. In the end, our houses were actually built and available before any of the donated units arrived in the region.

Problems are also created when the technologies brought in are not supported by or become a part of the local economy. For example, the dairy cooperative we worked with received a tractor as a gift of aid from an international NGO. One of the co-op members drove it into town one evening as it was the best mode of transport they had. He got drunk and drove it into a ditch on the way home. It broke the axle. There was no repair shop in the area and no replacement axle. The tractor was never resuscitated. It was like a foreign body injected into the community. It couldn’t survive. If you are going to bring in these outside elements they require a long train of education and support available over an extended period of time.

Government. Can government provided housing solve the problem and provide housing for the poor? No. For the same reason it can’t be solved with charity: at 11 times the world GDP, the problem is too big.

However, the problem is not too big for the resource contained in the 2 billion people living in slums and the 5 billion people with inadequate housing.

It is not my intent to discount or discourage charity or government programs. On the contrary, They help, especially if they are structured to address their own limitations. I want to see more charity. I want to see more government programs. But, we need to be clear that they are not remotely enough. However, the effort of 3-5 billion people and their natural resources is enough. Our conclusion is that the most serious and feasible way to address people’s housing needs, the housing needs of everyone, is for people to provide it themselves. As a planet, we need to ask ourselves, what are the conditions that will allow and encourage this to happen?

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CAN THE GLOBAL HOUSING PROBLEM BE SOLVED?