De-risking development of medium density housing to improve housing affordability and boost supply

Housing price inflation is a national concern given the serious decline in the number of low and middle income households able to purchase housing. In addition housing supply lags well behind demand. In Melbourne, urban consolidation policies explicitly seek intensification to promote housing supply but planning regulation is often criticised for being a significant cost driver for medium density housing. It is assumed that easing supply constraints will improve affordability. We suggest that laissez-faire planning exacerbates affordability issues because this approach fails to address the basic economic problem: the current inability of the market to efficiently match supply and demand in order to progress an orderly and de-risked development process. The role of “exchange” one of the four housing market sub-systems identified by Burke (2012) has until recently generally been ignored but our examination reveals significant economic transaction costs that manifest as development risks that impact on affordability. Fortunately these can be mitigated, but only if there is a more consumer driven supply response.

An Uber for apartments could solve some common housing problems

Speculative property developers, criticised for building dog boxes and the slums of tomorrow, are generally hated by urban planners and the public alike. But the doors of state governments are seemingly always open to developers and their lobbyists. Politicians find it hard to say no to the demands of the development industry for concessions because of the contribution housing construction makes to the economic bottom line and because there is a need for well located housing. New supply is also seen as a solution to declining housing affordability. Classical economic theory however is too simplistic for housing supply. Instead, an offshoot of Game Theory - Market Design – not only offers greater insight into apartment supply but also can simultaneously address price, design and quality issues. New research reveals the most significant risk in residential development is settlement risk – when buyers fail to proceed with their purchase despite there being a pre-sale contract. At the point of settlement, the developer has expended all the project funds only to see forecast revenue evaporate. While new buyers may be found, this process is likely to strip the profitability out of the project. As the global financial crisis exposed, buyers are inclined to walk if property values slide. This settlement problem reflects a poor legal mechanism (the pre-sale contract), and a lack of incentive for truthfulness. A second problem is the search costs of finding buyers. At around 10% of project costs, pre-sales are more expensive to developers than finance. This is where Market Design comes in.

Submission to Senate Economics References Committee, An Inquiry in to Affordable Housing

Developer paid fees or infrastructure charges are a commonly used mechanism for local governments to pay for new infrastructure. However, property developers claim that these costs are merely passed on to home buyers, with adverse effects to housing affordability. Despite numerous government reports and many years of industry advocacy, there remains no empirical evidence in Australia to confirm or quantify this passing on effect to home buyers and the consequent effect on housing affordability. Hence there remains no data from which governments can base policy decision on, and the debate continues. This research examines the question of the impact of infrastructure charges on housing affordability in Australia. It employs hedonic regression methods to estimate the impact of infrastructure charges on house prices and vacant lot prices in Brisbane, Australia during 2005-2011, using a data set of 29,752 house sales, comprising 4,699 new house sales and 25,053 existing house sales and 13,739 lot sales. The regression results for the effect of infrastructure charges on house prices in Brisbane indicated that for every $1.00 of infrastructure charge levied on developers, all house prices increase by $3.69 or a 369% overpassing of these government levies onto home buyers. Thus, this one government levy could be responsible for $877 per month on home owner mortgage repayments in Brisbane, Queensland. This research is consistent with international findings, that support the proposition that developer paid infrastructure charges are passed on to home buyers and are a significant contributor to increasing house prices and reduced housing affordability. Understanding who really pays for urban infrastructure is critical to both the housing affordability and infrastructure funding debates in Australia and this research provides the first empirical data for policy makers to assess their policy objectives and outcomes against.

Ecologies of housing and underlying assumptions of vulnerability

Purpose This paper is informed by a study that aimed to understand the difficulties in implementing models of housing, and to help address the lack of accessible and affordable private housing for people with disability in Australia. In responding to this aim, the study formulated an ecological map of housing models, which are examined in this paper in terms of their underlying assumptions of vulnerability. Design/methodology/approach The study involved explanation building, using a multiple case study approach, informed theoretically by an ecological framework. It included organisations, families and individuals with disability. Findings For the purpose of this paper, the study revealed a direct relationship between the nature of the housing models proposed, and assumptions of vulnerability. In the context of the study findings, the paper suggests that attempts to address individual housing needs are more likely to achieve a positive outcome when they are person driven, from a premise of ability rather than disability. Overall, it invites a ‘universalistic’ way of conceptualising housing issues for people with disability that has international relevance. Practical implications This paper highlights how assumptions of vulnerability shape environmental responses, such as housing, for people with disability. Originality/value This paper is based on a study that reconciled a person-centred philosophy with an ecological appreciation of the external and internal factors impacting housing choice for people with disability.

Enhancing information about sustainability features for sustainable housing delivery

Sustainability practices in government regulations and within the society influence the delivery of sustainable housing. The actual delivery rate of Australian sustain-able housing is not as high as other countries. There is an absence of engagement by stakeholders in adopting sustainable housing practices. This may be due, in the current Australian property market, to confusion as to what sustainability features should be considered, given the large range of environmental, economic and social sustainability options possible. One of the main problems appears to be that information demanders, especially real estate agents, valuers, insurance agents and mortgage lenders do not include sustainability perspectives in their advice or in their decision processes. Information distribution in the Australian property market is flawed, resulting in a lack of return-on-investment value of ‘green’ features implemented by some stakeholders. This paper reviewed the global sustainable development concept and Australian sustainable assessment methods. This review identified the possibility of a research project which aimed at identifying and integrating different perceptions and priority needs of the information demanders, for developing a model for the potential implementation of sustainability features distribution in the property industry. This research will reduce confusion on the sustainability-related information which can influence the decision making of stakeholders in the supply and demand of sustainable housing.

Courtyard housing as a subtropical urban design model

Through both theory and practice, this practice-based research develops and tests the idea that courtyard housing can deliver sustainable, compact housing in rapidly growing subtropical cities. It proposes a contemporary urban design model that incorporates urban design courtyard housing prototypes. These prototypes can be further developed by architects and urban designers for similar climatic conditions across the world.

Submission to the Senate Economics References Committee Inquiry into affordable housing 20 August 2014: De-risking development of medium density housing to improve housing affordability and boost supply

This submission addresses the problem of housing price inflation, the chronic under-supply of new housing stock, and the resultant decline in housing affordability for low and middle income households. It specifically focusses on the supply of medium density housing (multi-unit development) in Melbourne, although we believe that the observations made about housing in supply in Melbourne are relevant in other urban centres and to other types of housing supply. In terms of medium density housing (MDH) our concern also extends to the poor quality and design. Why the market tends to deliver generic apartments of poor quality and design which are uncompetitive with lower density housing and amenity despite planning objectives, and how this apparently intractable problem can be overcome is the topic of this submission...

Smarten up! Applying market design theory to housing supply

PROBLEM Cost of delivering medium density apartments impedes supply of new and more affordable housing in established suburbs EXISTING FOCUS - Planning controls - Construction costs, esp labour - Regulation eg sustainability

Odour Emissions from Tunnel Ventilated Poultry Housing

In Australia, factors such as local planning processes, urban encroachment into rural areas and intensification of the poultry industry have increased the potential for odour and dust nuisance. At present, accurate estimates of odour emissions from mechanically ventilated poultry housing systems do not exist for Australian conditions. This has made the poultry industry vulnerable to unsubstantiated criticism. Recently, the Australian poultry industry have made a significant investment in research to obtain accurate estimates of odour, dust and volatile chemical emission rates from typical poultry housing systems. This paper describes the measurement of odour emissions from tunnel ventilated poultry housing systems in different climatic zones in Queensland and Victoria, Australia (humid sub-tropical and Mediterranean respectively) during two seasons (summer and winter). Samples were collected at defined intervals over typical batch production cycles to define the odour emission profiles. These samples were analysed using dynamic olfactometry according to the Australian Standard 4323.3 to derive the odour concentration values. Ventilation rates were measured concurrently, allowing the calculation of odour emission rates. Odour concentration and emission rates were assessed in terms of ventilation rate, ambient and shed air temperature and relative humidity and litter moisture status. Odour emission rates varied with bird age. Seasonal differences in odour emission rate were also observed.

The relationship between the determinants of rental housing satisfaction and considering moving in Finland

Purpose The purpose of this paper is to discuss the relation between dissatisfaction with housing conditions and considering moving among residents of Finnish rental multifamily buildings. The paper examines physical attributes, socioeconomic factors, and subjective opinions related to housing conditions and satisfaction with housing. Design/methodology/approach Logistic regression analysis is used to examine survey data to analyse which factors contribute to dissatisfaction with the housing unit and the apartment building and whether dissatisfaction is related to consideration of moving. Findings The findings indicate that dissatisfaction with the building and individual housing unit are associated with greater probability of considering moving. Satisfaction with kitchen, living room, storage, and building age are the most important indicators of satisfaction with the housing unit, and satisfaction with living room, bathroom, storage, and building age are associated with satisfaction with the apartment building. These are the areas in which landlords could invest in renovations to increase satisfaction in an attempt to reduce turnover. Research limitations/implications The study is conducted with Finnish data only. The sample is not a representative sample of the Finnish population. A longitudinal study would be needed to determine whether dissatisfied residents indending to move actually change residence. Originality/value This study is the first of its kind in the Finnish housing market. It tests a general model that has been suggested to be customized to local conditions. In addition, much of the research on this topic is more than 20 years old. Examination of the model under current housing and socioeconomic conditions is necessary to determine if relationships have changed over time.

The potential for consumer segmentation in the Finnish housing market

This article examines whether cluster analysis can be used to identify groups of Finnish residents with similar housing preferences. Because homebuilders in Finland have been providing relatively homogeneous products to an increasingly diverse population, current housing may not represent the occupiers' preferences so a segmentation approach relying on socioeconomic characteristics and expressed preferences may not be sufficient. We use data collected via questionnaire in a principal component analysis followed by a hierarchical cluster analysis to determine whether different combinations of housing attributes are important to groups of residents. We can identify four clusters of housing residents based on important characteristics when looking for a house. The clusters describe Finnish people in different phases of the life cycle and with different preferences based on their recreational activities and financial expenditures. Mass customization of housing could be used to better appeal to these different clusters of consumers who share similar preferences, increasing consumer satisfaction and improving profitability.

Factory employee housing; Paul I. Landmann Manufacturing Factory; Mannheim-Neckarau Business Establishments; Factories

"Arbeiter und Mietshaeuser"

Factory employee housing; Paul I. Landmann Manufacturing Factory; Mannheim-Neckarau Business Establishments; Factories

"Arbeiter und Mietshaeuser"

Planning, Managing and Evaluating Group Housing Systems for Gestating Sows

This project will examine infrastructure changes required to existing gestation stall accommodation including performance and economics.

Factory employee housing; Paul I. Landmann Manufacturing Factory; Mannheim-Neckarau Business Establishments; Factories

"Arbeiter und Mietshaeuser"