A staggering 330 million urban households around the world live in substandard housing or are so financially stretched by housing costs they forgo other basic needs like food and health care, according to McKinsey.
Urban dwellers globally fork out $650 billion more per year on housing than they can afford, or around 1 percent of world gross domestic product (GDP), McKinsey estimated in a new report, highlighting the enormity of the affordability gap.
More than two-thirds of the gap is concentrated in 100 large cities. In several low-income cities such as Lagos and Mumbai, the affordable housing gap can amount to as much as 10 percent of area GDP.
McKinsey's study looked at the cost of housing as a portion of household income in cities around the world to determine where urban residents were most under financial pressure.
For this study, it defined affordability as housing costs that consume no more than 30 percent of household income.
It's going to get worse
Based on current trends in urban migration and income growth, the affordable housing gap would grow to 440 million, or 1.6 billion people, within a decade.