December 22, 2008 17:15 ET

Affordable Housing Is a Priority for Overcoming the Crisis and Achieving the Millennium Development Goals

Secretariat and the Real Estate Market Advisory Group (REM) of the United Nations Economic Commission for Europe, With the Support of the International Real Estate Federation (FIABCI), to Develop Guidelines

NEW YORK, NY--(Marketwire - December 22, 2008) - "Beyond the seriousness of the real estate crisis and the economy, we must not overlook the effect on the social dimension of people's lives. It is now all the more imperative to strengthen the global partnership for achieving the internationally agreed development goals." This warning, from the Deputy-Secretary-General, Asha-Rose Migiro, was made at a seminar on the real estate and financial crisis organized by the United Nations Economic Commission for Europe (UNECE), its Real Estate Market advisory group (REM) and the International Real Estate Federation (FIABCI), held on 16 December in New York.

At the seminar, a panel of experts discussed the root causes, effects and impacts of, as well as possible solutions for, the current crises on development. Speakers stressed the need to focus on the different demands and realities as well as alternative models and tools, not merely the financial pitfalls facing just a few countries. Affordable housing remains a critical issue, with many countries still lagging behind in terms of providing basic housing services.

There is a need to address global markets and global imbalances related to the real estate, which includes a better mobilization of domestic resources. Warnings have been made concerning the use of foreign capital for housing and its unpredictability. Better, smarter and increased regulation should be part of any new real estate deal. The dangers of sub-prime mortgages were already highlighted in the 1990s, nevertheless, little was done. Bubbles were fuelled by bad policies. To avoid the same mistakes in the future, the experts concurred that stronger and more effective monitoring of the markets, combined with greater accountability, is absolutely essential.

Experts at the seminar also agreed that a collaborative system to supervise enterprises -- comprising private and public stakeholders, a greater role for government and improved international coordination -- was needed. According to Deputy-Secretary-General Migiro, "It has become apparent that the housing sector needs to take into consideration the broad spectrum of stakeholders with which it interacts -- not only the institutions providing financing, but also the people who are purchasing the houses."

In closing the seminar, Paolo Garonna, Officer-in-Charge of UNECE, emphasized that the political landscape now seems ready for change and that the post-carbon economy offers opportunities for renewed housing and real estate policies as well as for enhancing transparency of the system. A well-motivated regulatory system and promoting practical cooperative arrangements in practice, such as private-public partnerships, will also promote sustainability in refurbishment and construction, and help make housing more affordable for all.

The relevant UNECE committees are well placed and already actively providing concrete policy tools to its member States. In particular, practical advice for countries on the real estate crisis will be developed by REM, which is organizing a conference in late March in Rome to discuss a set of "Guidelines for the Development of the Real Estate Market for Social and Economic Benefits."

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