The Effects of Economic Sector GDP on Low-Income Housing Supply. Colombia’s Regions Case

Abstract

The regions with the best economy have a greater capacity to develop low-income or social impact housing, thus contributing to the reduction of poverty, and therefore, to the fulfillment of the Sustainable Development Goals. This is observed in fewer people living in extreme poverty and with fewer unmet basic needs. The present article analyzes the correlation between development by the main economic sectors in the different regions (departments) of Colombia, and the offer of low-income housing. The valid relationship found is between the economic condition of the regions (GDP) and non-social housing (more expensive commercial value) (Spearman´s Rho: 0.9). That means that there is an imbalance between regional economic capacity and the low-income housing offer because their economic potential allows them to have less of a demanding population, that is, living in poverty. This correlation is higher with activities that are mostly developed in an urban environment, such as manufacturing, construction, real estate, and finance and insurance. On the contrary, the correlation is lower with industries such as mining and agriculture, which mostly operate in rural areas. The analysis for low-income housing and economic sectors GDP yields low correlations, but are especially dismissible for more rural industries, such as mining and agriculture. The analysis shows the change of trend in the correlations for the year 2021, the beginning of the post-pandemic economic recovery.