ABSTRACT
The global trend of metropolitanization is growing faster than the population. Despite the lack of a unified theoretical framework for defining unaffordable housing, this crisis is recognized as one of the greatest challenges facing metropolises. Unaffordable housing is conceptualized as a phenomenon, and its consequences, constituent entities, and structural determinants are examined systematically. Using a systematic review and critical realism as methodological approaches, this study first describes the events and consequences of unaffordable housing at the empirical reality level. Identified outcomes include increased poverty, social segregation, informal settlements, diminished public trust, reduced quality of life, and environmental threats. The structural and causal relationships underlying this phenomenon are examined within a systematic domain, which includes governance and housing policy structures, economic frameworks, spatial and urban infrastructure configurations, socio-cultural structures, and ultimately, urban sustainability structures. The interpretation of findings involved an examination of both internal and external relationships within the structures that give rise to the phenomenon. Through thematic analysis of the literature within the scope of this systematic review, the issue was explained within five theoretical frameworks. Subsequently, an explanatory inference hypothesizes two causal dimensions of the latent reality, drawn from Thapa and Omland’s approach within critical realism. The results indicate that mechanisms such as housing accumulation and the misalignment of local government policies with institutions and actors reproduce unaffordable housing. This study highlights the multi-level understanding of the phenomenon for effective policies. This insight urges us to identify effective strategies through institutional reforms in urban governance.
Extended Abstract
Introduction
The unaffordable housing in megacities is a complex and escalating global issue. Governmental interventions, even in free-market economies, are often necessitated by the housing crisis and human rights mandates. However, policies have frequently been misapplied, with affordable housing initiatives sometimes benefiting the middle class more than the intended low-income populations, and occasionally contributing to increased homelessness and informal settlements.
A significant portion of the systematic document is dedicated to elucidating the complex, multi-layered causal mechanisms underlying urban housing unaffordability. It critiques the tendency of policymakers to rely on superficial observations rather than analyzing the intricate decision-making structures, the interplay of various actors, and the dynamics of political power. The affordability problem is viewed less as a market failure and more as a consequence of inequitable resource distribution. Therefore, a multi-faceted understanding of urban housing markets - analyzed in relation to local structures - is deemed necessary, rather than focusing solely on supply shortages. The research categorizes existing studies on housing unaffordability into four theoretical dimensions:
1. Classical Economics: It concentrates on supply and demand, land use, zoning, subsidies, and taxes, linking housing affordability to factors such as access to employment, services, amenities, and the price-to-income ratio.
2. Political Economy of Space: This perspective emphasizes the roles of national and local governments, market relations, political and economic interests, financial considerations, and collective action in shaping housing policies and their impact on affordability. It critically examines the “commodification” of housing and the mechanisms of support.
3. Good Urban Governance, State Theory, and Institutionalism: This approach concentrates on the functions of various governmental and institutional bodies in policy formulation, planning, and the execution of affordable housing strategies. It addresses support mechanisms, legal frameworks, and stakeholder involvement, acknowledging that policy system variations can lead to diverse outcomes and that coherent budgeting for affordable housing programs necessitates overcoming institutional barriers.
4. Social-Spatial Justice and the Right to Housing: This viewpoint frames housing through the principles of equitable service and resource distribution, marginalized communities’ recognition, and their participation in policy development. It obligates governments to actively intervene in the housing market, prevent discrimination, and promote equitable distribution through policy and conflict resolution, asserting housing as a fundamental human right.
Current research exhibits a notable gap, underscoring the need for multi-level, in-depth analyses to fully explain the causal mechanisms of housing unaffordability in contemporary metropolises, thereby providing a robust foundation for informing effective urban policy interventions.

Methodology
Through the critical realist paradigm, three layers of reality are distinguished as follows:
· Empirical Reality, which refers to the observed events and their consequences.
· Actual Reality encompasses events and outcomes that occur.
· Real Reality comprises the underlying structures, entities, causal powers, and relationships that exist independently of observation and are responsible for generating phenomena.
Thapa and Omland (2018) propose a four-step framework for implementing critical realism, comprising the following stages: (1) description of events, (2) identification of entities and their associations, (3) theoretical abduction, and (4) retroduction for identifying candidate mechanisms. Applying retroduction and abduction as analytical logic, moving from observable effects/events to inferring the underlying causes. A qualitative research strategy was adopted, focusing on housing in megacities from 2009 to 2025. Data collection was primarily conducted through a systematic review from Databases such as Google Scholar, Web of Science, Scopus, and ResearchGate, resulting in 59 relevant sources after filtering. Thematic analysis has been used to identify and categorize the events and consequences of housing unaffordability. Subsequently, explanatory analysis was applied to identify entities, structures, and their causal relationships. then, the roots, causes, sources, and context of these relationships were searched to uncover structures and their interactions. Finally, findings were reinterpreted to formulate two mechanisms, combining all stages with the layer of latent reality.

Results and Discussion
Nine pervasive outcomes of housing unaffordability were identified:
· Economic Burden on Households: Manifesting as housing stress, cost burden, unmet non-housing basic needs, and homelessness. Concepts such as 'housing stress' (He et al., 2022:6; Liu et al., 2021:5; Liu & Ong, 2021:7) and its most severe form, homelessness (Pawson et al., 2020:17), as well as 'cost burden' for renters (Liu & Ma, 2021:5; Ortiz et al., 2020:505), fall directly into this category. Housing shortages also precipitate crises in other essential needs (Amar & Armitage, 2025). The financial pressure imposed by housing costs reduces household resources available for other basic requirements, such as food, medicine, healthcare services, and clothing (Saha et al., 2025).
· Spatial gaps: Such as urban segregation, urban exclusion, and informal settlements. As land prices rise in central areas, affordable housing is often located on the urban periphery or in areas with lower land values. This leads to the spatial segregation of low-income populations (Shi et al., 2015; Won, 2022). Such segregation can also result in the urban exclusion of residents from opportunities and urban services.
· Displacement: Often a consequence of redevelopment, gentrification pushes residents to the periphery. Typically, these projects are implemented on the urban periphery due to cost and land acquisition considerations (Galster & Lee, 2020). There is a significant difference in population mobility between residents of formal subsidized housing and those of informal housing, which reflects locational preferences and commuting time. Redevelopment and gentrification are also among the policies that, while generating housing supply, displace the existing resident population from the area (Celhay & Gil, 2020:9; Gopalan & Venkataraman, 2015:134; Ye et al., 2017:2).
· Jeopardized Health and Well-being: Direct negative impacts of housing cost burden on physical and psychological health, and also access to food and medicine. Some researchers have directly linked housing cost burden to negative outcomes in physical health (e.g., hypertension) and limited access to essential resources such as food (Saha et al., 2025; Wang et al., 2024; Wang & Melton, 2023; Daniel et al., 2020:37). In general, the relationship between housing costs and restricted access to food, as well as its impact on health, is readily understandable.
· Job-Housing Mismatch and Increased Commute Distances: Leading to traffic congestion, strain on infrastructure, reduced balance, and decreased productivity. The settlement of populations on the urban periphery results in a mismatch between employment and residential locations. This spatial mismatch increases commuting time and creates a spatial gap between residence and workplace. The increase in distances places pressure on transportation infrastructure, elevates traffic volumes, and reduces the efficiency of the transport network (Ye et al., 2017:8-10).
· Reduced Public Trust and Participation: Public dissatisfaction and resistance to urban management initiatives and actions. Local public pressure has emerged as a municipal response to the imperatives of affordable housing (Davis & Huennekens, 2024:15). Political pressure, the capacity to mobilize resources, and local public pressure can also influence the fate of housing support and provision policies. Redevelopment and consolidation projects aimed at producing subsidized housing generate conflicts of interest and, if not properly managed, lead to a decline in stakeholder trust in local government (Adkins et al., 2017; Davis & Huennekens, 2024:15; Potsiou et al., 2022). This, in turn, results in resistance to state interventions.
· Safety and Security Threats: Resulting from low safety perceptions, insecurity, and challenges in multi-family housing. Security issues or perceptions of lower safety constitute a specific area of study and are considered factors influencing resident satisfaction (Ortiz et al., 2020:505; Mehta et al., 2020:78; Celhay & Gil, 2020:6). An outcome such as multi-family housing, which violates privacy, threatens household security (Martin et al., 2018).
· Environmental Impacts: Such as increased energy consumption, greenhouse gas emissions, and unsustainable materials. This outcome, indirectly through amplified commuting distances resulting from spatial segregation, can lead to higher energy consumption and greenhouse gas emissions. Unsustainable buildings and the use of polluting materials are also among the problems associated with unaffordable housing (Lawson et al., 2022:8; Saha et al., 2025; Amar & Armitage, 2025).
· Commodification of Housing: Housing became an asset for capital accumulation and speculation, rather than a part of public interests. Housing serves as a capital asset and a tool for speculation and profit maximization in metropolises. High-density construction in central and commercial districts is pursued to increase value and attract investment, rather than achieving public benefit. Thus, housing has become a lever for accumulation and investment (Daniel et al., 2020:46; Martin et al., 2018; Dezhi et al., 2016:3).
Key themes emerge through central research questions. The phenomenon of unaffordability was conceptualized as an emergent outcome arising from the interaction of the underlying five structures-real reality layer:
1. Governance and Policy: Characterized by central government mandates, local government reliance on land-based revenues, and the often-ineffective implementation of housing policies.
2. Housing Economics and Resource Provision: Defined by land or construction costs, inadequate financial support, and insufficient household income.
3. Spatial and Urban Infrastructure: Influencing the location of affordable housing (often peripheral), access to public transport, and job-housing balance.
4. Social and Public Perception: Encompassing community safety, social support, residential satisfaction, and participation.
5. Urban Sustainability: Incorporating environmental quality, social inclusion, and long-term economic viability related to housing.
The theoretical framework of this study draws on multiple perspectives: classical economics and urban economics, the political economy of space, institutionalism and urban governance, the theories of social justice, spatial justice, and the right to housing, urban sustainability and resilience approaches. The complex interplay of components in these structures generates the phenomenon of housing unaffordability. Analytical steps with retroductive reasoning identify the underlying causal mechanisms generating unaffordable housing in metropolitan areas. The synthesis of all findings and causal relations yielded unaffordability mechanisms. Therefore, the analysis traces backward through systematic literature to evaluate mechanisms, adhering to critical realism’s emphasis on retroduction as a method for uncovering generative mechanisms. Two mechanisms emerged:
First, the commodification of housing, transforming it from a consumer good into an investment asset under prevalent neoliberalism, drives up housing prices and speculative demand. A strong correlation exists between housing prices and investments, supported by the economic structure where housing serves as a secure investment, intensifying demand. While China has implemented strategies to curb speculation, the underlying trend remains evident in other contexts.
Second, Policy misalignment between local governments and central agencies regarding housing policy leads to policy failure. This results in failed affordable housing programs, secondary impacts, and local governments facing budget limitations, often deferring responsibility to national levels. The influence of economic elites in shaping housing policies further exacerbates this issue. This hypothesis finds strong support across various megacities.

Conclusion
The research describes a critical bidirectional relationship between housing unaffordability and urban governance structures in metropolitan areas. Market-driven strategies like gentrification and urban renewal, often framed as equitable, instead deepen spatial inequalities and displacement. Local governments' dependence on land revenues exacerbates job-housing mismatches by concentrating low-income housing on peripheries. The research underscores the need for context-specific approaches that address institutional structures, actor networks, and governance dynamics to foster equitable housing solutions. Housing unaffordability in megacities is not an isolated issue but a complex, multi-layered phenomenon shaped by the interplay of governance, economics, spatial planning, and social dynamics within competitive urban environments. The key contribution lies in unearthing these hidden layers and the intricate networks of formal and informal actors that shape housing outcomes. Effective intervention requires understanding these causal mechanisms and interdependencies. Rather than dismissing these factors, policymakers should proactively engage stakeholders and integrate these dynamics into housing policies to prevent housing from becoming a tool for capital speculation. The findings emphasize tailored interventions, accounting for each megacity’s unique characteristics and stakeholder networks, to ensure sustainable and inclusive urban development.

Funding
There is no funding support.

Authors’ Contribution
The second author contributed to the conceptualization, while the first author was responsible for the writing and implementation of the article. The content of the article and all its aspects have been agreed upon by both authors.
Conflict of Interest
Authors declared no conflict of interest.

Acknowledgments
We are grateful to all the scientific consultants of this paper.