We don’t have a global housing shortage – we have a global housing mismatch

Every week, the news delivers contradiction after contradiction: in one article, housing is lamented as hopelessly unaffordable, while in the next, a town is selling homes for just €1.

The paradox in the headlines is surface-level at best and the global housing crisis cannot be attributed simply to a lack of housing. Rather, the issue is that existing homes are not well-located, priced beyond the means of those who need housing the most, or ill-suited to support the way people live.

What we face may not be a global housing shortage but in fact, a global housing mismatch.

In many high-income countries, the number of homes being built has kept pace with and in some cases even surpassed the rate of population growth. Consider the United States, where census data reports a nationwide surplus of vacant bedrooms in the millions.

Yet, hundreds of thousands of Americans are homeless, residing in shelters, cars or on the streets. Instead of looking at the quantity of housing produced, see where homes are located, how much they cost and ultimately, to whom they are accessible.

Demographic changes introduce complexity and uncertainty to housing ecosystems. Many older adults continue to occupy large family homes long after their children have left. While downsizing seems logical, smaller, centrally located units are often equally or even more expensive. The result is a system that locks people into homes they no longer need, while locking others out of the ones they do.

This pattern of housing underutilization, entrapment and exclusion is not unique to the American housing system. In fact, the housing distribution crisis is unfolding on a global scale:

Globally, housing has become a significant political flashpoint, ranking among the foremost issues that shape and influence elections. Politicians respond to public pressure with ambitious, headline-ready promises, such as the pledges to build 1 million homes a year seen in the Philippines and in Nigeria.

While these easy-to-communicate figures help convey a sense of urgency and scale, they also obscure the core problem: a mismatch between what is being built and what people really need.

Many large-scale housing programmes fail not because of substandard construction but because they prioritize inexpensive land over well-connected locations, building homes far from jobs, transportation and services. Cheap land drives decisions, not quality of life.

Today, housing ranks among the foremost economic concerns for many families and has even surpassed longstanding voter priorities, such as inflation or employment. However, if new homes are unaffordable, inaccessible or misaligned with daily life, voters won’t feel the benefit, no matter how many units are delivered.

As one housing official from Southeast Asia candidly admitted to us: “Our targets are quantitative, not qualitative.” That mindset must evolve.

We often hear that the world needs to build 96,000 new homes per day to meet demand. In reality, this figure conceals more than it explains.

While millions live without adequate housing, many are not without shelter: they’re living in overcrowded, unsafe or substandard conditions. The problem is as much qualitative as it is quantitative. What’s needed isn’t just more homes, it’s homes that are better located, built and adapted to today’s realities.

When it comes to housing, there is no panacea or magical construction technology that will help bring down costs. Access to affordable, well-located land, not bricks or cement, is the real bottleneck. A McKinsey report found that land makes up the majority of housing costs in many cities.

That’s why simply increasing supply doesn’t necessarily reduce prices, because we’re often still building in the wrong places.

Solving the housing mismatch requires moving from volume to value and from outputs to outcomes. That means:

The housing debate needs reframing. We don’t lack homes – we lack homes in the right places.

If we continue to chase unit counts without addressing deeper inefficiencies, we’ll continue to see $1 homes in one town and million-dollar condos in another.