Indicator 1.50 Affordable Housing - proxy indicator

Housing affordability in BiH has reached a critical point, with poor households spending over 40% of their income on housing. Many factors such as demand from diaspora and foreign investors, fragmented and poorly coordinated housing policies, have pushed prices beyond the reach of residents. Social housing systems remain underdeveloped, while informal rental markets induce tenants’ vulnerability and deprive governments of tax revenue.

Poverty and social exclusion harm individual lives and limit the opportunities for people to achieve their full potential by affecting their health and well-being and lowering educational outcomes. This, in turn, reduces opportunities to lead a successful life and further increases the risk of poverty. Without effective education, health, social, tax benefit and employment systems, the risk of poverty is passed on from one generation to the next. This causes poverty to persist and hence creates more inequality, which can lead to long-term loss of economic productivity from whole groups of society and hamper inclusive and sustainable economic growth.

In addition to desk research, this paper draws on insights from eight semi-structured interviews conducted with stakeholders in Bosnia and Herzegovina, Montenegro, Denmark, and the Netherlands. Interviewees included representatives from cantonal ministries, municipal governments, NGOs working on tenant rights and housing affordability, and researchers specializing in housing systems. These interviews provided practical perspectives on the challenges of social housing, informal rental markets, vacant properties, and affordability.

Bosnia and Herzegovina ranks among Europe’s least affordable countries for housing, with average price-to-income ratios exceeding 13, which is far above, for example, the Netherlands’ 7.7 and Denmark’s 6.6.