World Cities Report 2026: Global Housing Crisis, Financialisation & Baku Call Explained

The flagship publication: The World Cities Report is the flagship global assessment produced periodically by UN-Habitat, the United Nations agency responsible for human settlements and sustainable urban development. The 2026 edition, titled "The Global Housing Crisis: Pathways to Action", is devoted entirely to housing, treating it not merely as shelter but as an enabler of health, employment, public services and economic opportunity, and therefore central to achieving the Sustainable Development Goals (SDGs).

The launch event — World Urban Forum: The report was launched on 19 May 2026 during the 13th session of the World Urban Forum (WUF13) in Baku, Azerbaijan. The World Urban Forum is a non-legislative technical forum convened by UN-Habitat, usually every two years, to examine the most pressing urbanisation issues. WUF13, held from 17 to 22 May 2026 on the theme "Housing the World: Safe and Resilient Cities and Communities", was the largest ever, with more than 57,000 participants from 176 countries.

The Baku Call to Action: The Forum concluded with the adoption of the Baku Call to Action, a shared roadmap that reframes housing as a "system" connected to land, infrastructure, transport, services and livelihoods, rather than as construction in isolation. It links housing justice with climate justice and calls for integrated, people-centred solutions. The next session, WUF14, is scheduled to be held in Mexico in 2028.

Meaning of adequate housing: Under international human rights law, "adequate housing" is more than four walls and a roof. It includes security of tenure (protection from forced eviction), availability of basic services (water, sanitation, electricity, clean cooking), affordability, habitability (durable structure, adequate space), accessibility, a suitable location near work and services, and cultural adequacy. The report uses an Adequate Housing Index covering 64 emerging economies and seven household-level dimensions, including improved water, improved sanitation, adequate living space, durable construction, secure tenure, electricity and clean cooking fuel.

The price-to-income ratio: Affordability for prospective buyers is commonly measured using the house price-to-income ratio, which divides the median house price by the median annual household income. Housing is generally considered affordable when the median house price is no more than about three times the median household income; a ratio above five is treated as a sign of severe unaffordability. Globally, this ratio rose from 9.5 in 2010 to 11.7 in 2023 — far above the affordability threshold.

The 30% rule for rent and EMI burden: A second common yardstick is the share of household income spent on housing. A household that spends more than 30% of its income on housing (rent or loan instalments) is considered "cost-burdened" or stress-burdened. The report estimates that about 44% of households worldwide cross this 30% threshold, meaning housing costs are squeezing spending on food, health and education for nearly half the world's families.

The global scale: The report estimates that up to 3.4 billion people — close to four out of every ten people on the planet — lack access to adequate housing. Of these, more than 1.1 billion live in informal settlements and slums, the highest number ever recorded, facing insecure tenure, overcrowding and a lack of basic services. The overall global housing deficit (the gap between housing need and supply) grew from 251 million units in 2010 to 288 million in 2023, worsened by conflict-driven displacement, rapid urbanisation, land speculation and climate shocks. Climate-related hazards alone are projected to destroy roughly 167 million homes by 2040.

India's affordability position: Central and Southern Asia, including India, recorded the sharpest relative rise in price-to-income ratios — up about 73% between 2010 and 2023. Within India, large metropolitan markets are among the least affordable: Mumbai shows a price-to-income ratio of around 14.3 and Delhi around 10.1, both far above the severe-unaffordability threshold of five. India's homelessness rate is estimated at about 13 per 10,000 people (Institute of Global Homelessness).

The shrinking affordable segment: A striking shift in India is the composition of new supply. In 2018, more than half of the new housing units built in India's eight largest cities fell within the affordable-housing segment; by 2025 this had fallen to fewer than two out of every ten units. Developers increasingly prioritise luxury units, which carry higher profit margins, pushing homeownership further out of reach for ordinary families.

The "wrong location" problem: The report stresses that the state has often built too few homes — and sometimes built them in the wrong places, far from jobs and services. An analysis of Delhi Development Authority (DDA) records by the Centre for Policy Research's "Cities of Delhi" project found that of 979,073 houses built in Delhi between 2003 and 2010, fewer than 23,000 (about 2.3%) were built by the DDA. More than 50,000 government-built flats reportedly lie unoccupied on Delhi's outskirts because of poor connectivity and a lack of nearby livelihoods.

The post-War public housing era: The report traces the modern housing story to the period after the Second World War, when many governments — facing acute shortages and economic depression — invested heavily in state-led public housing. International agencies such as the United Nations, the International Labour Organisation (ILO) and the World Bank initially supported this direct-provision model.

The shift towards markets: From later decades, the same agencies increasingly argued that mass public housing was too costly, especially for newly independent and transitioning economies, and advocated greater private-sector involvement. This critique gave rise to two approaches that still dominate policy: the "aided self-help" model, in which households build or improve their own homes with state support, and the "enabling approach", in which governments act as facilitators while private developers, community associations and others build. In practice, these programmes often failed to reach the poorest and sometimes displaced the very people they were meant to help.

How subsidies and cheap credit pushed prices up: The report notes that even well-intentioned demand-side housing subsidies can backfire: by raising buyers' purchasing power without expanding actual supply, they can push prices higher. Similarly, the long decline in interest rates from the 1980s onwards made borrowing cheaper and encouraged investment in real estate, intensifying demand and price growth. This sets the stage for the central theme of the report — the financialisation of housing.

Definition: Financialisation refers to the increasing involvement of financial actors (banks, funds, large investors), financial instruments (mortgages, mortgage-backed securities, real-estate investment products) and large pools of capital in housing and land markets. In this model, a home is treated less as a place to live and more as an asset to invest in and trade.

How it plays out in India: After the economic liberalisation of 1991, access to home loans widened considerably, making homeownership more attainable for the middle class — a positive development. At the same time, the report observes that in India, Non-Resident Indians (NRIs) and investors increasingly buy luxury housing as an investment rather than for occupation, adding speculative demand at the top end of the market.

The credit-supply mismatch: Globally, the report argues, the expansion of credit allowed lending to grow faster than the construction of new homes. This created self-reinforcing loops in which easier access to credit pushed prices up more quickly than supply could respond — so more credit chased a relatively fixed stock of housing, inflating prices further.

Why effects vary: Crucially, the report stresses that the impact of financialisation depends on local conditions, regulation and the responsiveness of supply. In markets with constrained supply, large informal-income populations or weak tenant protections, heavy capital inflows can trigger evictions, rent hikes and speculative redevelopment. In better-regulated environments with strong planning systems, the same investment can support new construction, the upgrading of older housing and professionally managed rental stock. The policy lesson is that capital is not inherently harmful — governance determines whether it builds homes or merely bids up prices.

The five interlocking dimensions: The report frames the crisis through five interconnected challenges. Affordability captures the gap between housing costs and incomes. Displacement covers forced evictions and people uprooted by conflict, disaster and redevelopment. Informality refers to slums and unplanned settlements where residents lack secure tenure. Resilience/sustainability concerns climate risk and the need for low-carbon, disaster-resistant housing. Liveability addresses access to services, connectivity and quality of life. These are described as mutually reinforcing — a failure in one tends to worsen the others.

A "new social contract for housing": The report calls for a new social contract that rebalances the roles of governments, markets and communities. Rather than relying on direct state construction alone or on unregulated markets, it advocates strengthening the social function of housing — the principle that housing must serve human needs first.

Specific policy directions: Key recommendations include expanding affordable, well-located housing and diverse rental options (so that housing is not built where people will not live); improving land governance to curb speculation; reforming planning systems to support compact, connected and climate-resilient cities; ensuring housing finance prioritises vulnerable and low-income groups, including informal workers and women-headed households; and recognising community-led and in-situ upgrading of informal settlements instead of forced eviction. International examples cited include community-driven upgrading models in Thailand and in-situ favela upgrading in Brazil.

The constitutional foundation: The Indian Constitution does not list housing as an express fundamental right, but the Supreme Court has read a right to shelter into the right to life. Article 21 guarantees that no person shall be deprived of life or personal liberty except by procedure established by law, and the courts have held that "life" means a life of dignity, which includes shelter. The right to reside and settle anywhere in India under Article 19(1)(e) reinforces this. The Directive Principles of State Policy — especially Article 39 (equitable distribution of material resources), Article 41 (right to assistance in cases of want) and Article 38 (social and economic justice) — direct the State towards welfare provision.

Landmark judgments: In Olga Tellis v. Bombay Municipal Corporation (1985), a five-judge bench held that the right to life under Article 21 includes the right to livelihood, and that pavement and slum dwellers could not be evicted arbitrarily without due process and consideration of rehabilitation. In Chameli Singh v. State of Uttar Pradesh (1996), the Court explicitly held that the right to shelter is a fundamental right under Article 21. Subsequent cases, such as Ahmedabad Municipal Corporation v. Nawab Khan Gulab Khan (1997) and Sudama Singh v. Government of Delhi (2010), reinforced that evictions of the urban poor must be accompanied by due process and, where appropriate, alternative accommodation.

Flagship housing schemes — PMAY: The Pradhan Mantri Awas Yojana (PMAY) is the operational backbone of India's "Housing for All" mission. PMAY-Urban was launched in June 2015 (Ministry of Housing and Urban Affairs), and PMAY-Gramin in April 2016 (Ministry of Rural Development), restructuring the earlier Indira Awaas Yojana. In 2024, the Union Cabinet approved building three crore additional houses — two crore rural and one crore urban.

PMAY 2.0 and the data: PMAY-Urban 2.0, launched on 1 September 2024, aims to assist one crore urban poor and middle-class families over five years, with government assistance of about ₹2.30 lakh crore and total investment estimated at ₹10 lakh crore; eligible beneficiaries receive central assistance of up to ₹2.50 lakh per unit. It runs through four verticals — Beneficiary-Led Construction (BLC), Affordable Housing in Partnership (AHP), Affordable Rental Housing (ARH) and the Interest Subsidy Scheme (ISS). PMAY-Gramin has been extended for FY2024-25 to 2028-29 to build two crore additional rural houses with an outlay of about ₹3.06 lakh crore, at unit assistance of ₹1.20 lakh in plains and ₹1.30 lakh in hilly/North-Eastern areas, on a 60:40 (90:10 for special category) cost-sharing basis. A 2020 slum survey estimated that about 6.5 crore people (1.39 crore households) live in slums in India — the domestic backdrop to the report's global findings.

UN-Habitat: The United Nations Human Settlements Programme (UN-Habitat) was established in 1978 (following the first Habitat conference in Vancouver in 1976) and is headquartered in Nairobi, Kenya. It is the UN's lead agency for sustainable urbanisation and human settlements, and it produces the World Cities Report and convenes the World Urban Forum.

SDG 11: Sustainable Development Goal 11 aims to "make cities and human settlements inclusive, safe, resilient and sustainable". Target 11.1 specifically seeks, by 2030, to ensure access for all to adequate, safe and affordable housing and basic services, and to upgrade slums — placing the housing crisis at the heart of the 2030 Agenda.

The New Urban Agenda: Adopted at the Habitat III conference in Quito, Ecuador, in 2016, the New Urban Agenda (NUA) is a global, non-binding framework guiding sustainable urban development for two decades. Together, SDG 11 and the NUA provide the policy architecture against which the World Cities Report 2026 measures progress and gaps.