Testing the Waters: Whether ECOFIN is Succeeding or Failing?

YOGYAKARTA, Indonesia - The ECOFIN council this year focused on the global housing crisis. Delegates discussed taxing speculative real estate, reforming zoning laws, and promoting sustainable housing. These ideas sounded promising, but many remain impractical under current conditions.

Taxing speculative buying could reduce artificial price inflation, but it won’t fix high construction costs. Developers will likely shift expenses onto consumers, making homes no cheaper. Subsidies alone cannot offset the structural costs that drive unaffordability.

Zoning reform encouraging high-density projects also faces major challenges. Building vertically is costly, especially with rising material and labor prices. Private firms have little incentive to invest in dense housing without strong government backing or tax breaks.

Moreover, high-density development can worsen gentrification. When land becomes more valuable, poorer residents are priced out. Without rent controls or community safeguards, these plans may deepen inequality instead of easing it.

The council’s push for “green housing” adds another layer of complexity. Sustainable materials and renewable systems are expensive. Calling such housing “cheap and sustainable” is unrealistic until green technology becomes truly affordable.

If eco-friendly housing caters only to wealthier groups, “green gentrification” will emerge. The poor will be excluded from sustainable communities, widening the urban gap ECOFIN aims to close.

ECOFIN’s long-term vision is admirable, but immediate needs remain unmet. Millions still lack access to affordable shelter. Policymakers must pair sustainability goals with realistic short-term relief.

The council should seek balance supporting density and green design while protecting affordability. Without that, the vision of inclusive housing will stay on paper, not in the real world.