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 Sustainable Development Goals. This is observed in fewer people living in extreme poverty and with fewer unmet basic needs. This present article analyzes the correlation between the development in the main economic sectors in different regions (departments) of Colombia and the supply of low-income housing. Nevertheless, the most remarkable relation that was found was between the economic development of the regions (GDP) and the supply of non-social housing (more expensive commercial value) (Spearman’s Rho: 0.9). This means that there is an imbalance between regional economic capacity and the low-income housing supply because the regions with higher economic potential should have a less demanding population, that is, people living in poverty. These correlations are better when they go hand in hand with activities that are mostly developed in an urban environment, such as manufacturing, construction, real estate, and finance and insurance. On the contrary, these correlations are worse with industries such as mining and agriculture that mostly operate in rural areas. The analysis between low-income housing and economic sectors’ GDP yields low correlations, but these are worse for rural industries. Also, the investigation shows a positive change in the correlations’ trend for the year 2021, the beginning of the post-pandemic economic recovery.