The impact of planning delays and other holding costs on housing affordability

Housing affordability is gaining increasing prominence in the Australian socioeconomic landscape, despite strong economic growth and prosperity. It is a major consideration for any new development. However, it is multi-dimensional, has many facets, is complex and interwoven. One factor widely held to impact housing affordability is holding costs. Although it is only one contributor, the nature and extent of its impact requires clarification. It is certainly more multifarious than simple calculation of the interest or opportunity cost of land holding. For example, preliminary analysis suggests that even small shifts in the regulatory assessment period can significantly affect housing affordability. Other costs associated with “holding” also impact housing affordability, however these costs cannot always be easily identified. Nevertheless it can be said that ultimately the real impact is felt by those whom can least afford it - new home buyers whom can be relatively easily pushed into the realms of un-affordability.

Empowerment games : empathic design probes for user participation in community housing

This paper documents the empowering process of a group of public housing residents through different design probing exercises. These exercises worked along with existing social processes without any involvement of designers. This paper shows how a design researcher devised a series of probing tools called "empowerment games" with a group of active users. These games are self-learning tools for making the abstract language of design legible to users. The main purpose of this intitiative was to change the preconception of govenmental bodies and professional designers of the passivity of the users with regard to their designed environment. This was the first case of the application of a participatory design process in Hong Kong subsidized housing. Design empathy is a central skill when working with users throughout the whole design research project.

Forecasting trends in the Brisbane central business district office market

The Queensland Department of Public Works (DPW) holds a significant interest in the Brisbane Central Business District (CBD) in controlling approximately 20 percent of the office space within its confines. This comprises a total of 333,903 square metres of space, of which 170,111 square metres is owned and 163,792 square metres is leased from the private sector. The department’s nominal ownership extends to several enduring, landmark buildings as well as several modern office towers. The portfolio includes the oldest building in the CBD, being the former Commissariat Stores building and one of the newest, a 15,000 square metre office tower under construction at 33 Charlotte Street.

Selected elements of housing affordability impacting otherwise potentially sustainable communities

It is widely held that strong relationships exist between housing, economic status, and well being. Therefore, recent events emerging from the United States, culminating in widespread housing stock surpluses in that country and others, threaten to destabilise many aspects related to individuals and community. However, despite global impact, the position of housing demand and supply is not consistent. The Australian position provides a strong contrast whereby continued strong housing demand generally remains a critical issue affecting the socio-economic landscape. Underpinned by strong levels of immigration, and further buoyed by sustained historically low interest rates, increasing income levels, and increased government assistance for first home buyers, this strong housing demand ensures elements related to housing affordability continue to gain prominence. A significant, but less visible factor impacting housing affordability – particularly new housing development – relates to holding costs. These costs are in many ways “hidden” and cannot always be easily identified. Although it is only one contributor, the nature and extent of its impact requires elucidation. In its simplest form, it commences with a calculation of the interest or opportunity cost of land holding. However, there is significantly more complexity for major new developments - particularly greenfield development. Analysis suggests that even small shifts in primary factors impacting holding costs can appreciably affect housing affordability. Those factors of greatest significance not only include interest rates and the rate of inflation, but even less apparent factors such as the regulatory assessment period. These are not just theoretical concepts but real, measurable price drivers. Ultimately, the real impact is felt by the one market segment whom can typically least afford it – new home, first home buyers. They can be easily pushed out of affordability. This paper suggests the stability and sustainability of growing, new communities require this problem to be acknowledged and accurately identified if the well being of such communities is to be achieved.

CSI Lincoln : an investigation into a declining housing market

The residential property market in New Zealand has been experiencing a boom and bubble period from 2001 through to mid 2007. Following a number of increases in the Official Cash Rate by the Reserve Bank and a decline in net migration numbers the housing market was perceived to be over inflated and due for a major correction. Numerous media, Government Departments, property experts and economists have been predicting significant reductions in the median price of residential property throughout New Zealand. This paper will analyse house prices in specific socio-economic locations within Christchurch over the past 12 months to determine how significant the current housing decline is. This study will review the change in residential property prices, variations in property listings since April 2008, sale volumes and days on the market across a range of housing sectors to determine the extent and range of any residential property downturn in the NZ recession.

Can Risk Management boost the supply of Affordable Housing Development and Management?

A shortage of affordable housing is a major problem in Australia today. This is mainly due to the limited supply of affordable housing that is provided by the non-government housing sector. Some private housing developers see the provision of affordable housing for lower income people as a high risk investment which offers a lower return than broader market-based housing. The scarcity of suitable land, a limited government ‘subsidy’, and increasing housing costs have not provided sufficient development incentives to encourage their investment despite the existing high demand for affordable housing. This study analyses the risk management process conducted by some private and not-for-profit housing providers in South East Queensland, and draws conclusions about the relationship between risk assessments/responses and past experiences. In-depth interviews of selected non-government housing providers have been conducted to facilitate an understanding of their approach to risk assessment/response in developing and in managing affordable housing projects. These developers use an informal risk management process as part of their normal business process in accordance with industry standards. A simple qualitative matrix has been used to analyse probability and impacts using a qualitative scale - low, medium and high. For housing providers who have considered investing in affordable housing but have not yet implemented any such projects, affordable housing development is seen as an opportunity that needs to be approached with caution. The risks associated with such projects and the levels of acceptance of these are not consistently identified by current housing providers. Many interviewees agree that the recognition of financial risk and the fear of community rejection of such housing projects have restrained them from committing to such investment projects. This study suggests that implementing improvements to the risk mitigation and management framework may assist in promoting the supply of affordable housing by non-government providers.

Constructing quality : the Hong Kong Housing Department journey

This paper explores the ‘journey’ along the ‘never ending quality road’ undertaken by the Hong Kong Housing Department over the last 15 years. It briefly covers the early history of public housing in Hong Kong, the catalytic effect brought about by the discovery of the infamous 26 sub-standard blocks in the mid-80s leading to the subsequent major improvements to process control and structural quality in the period 1985-1990. It then moves onto a discussion of initiatives taken since 1991, including the formation of the List of Building Contractors and the implementation of the Performance Assessment Scoring System (PASS). The paper ends with a discussion of the current status of quality issues within the Department and touches on future initiatives being developed to further enhance the quality of public housing in Hong Kong.

Can risk management boost the supply of affordable housing development and management?

Purpose: The purpose of this paper is to analyse the risk management process conducted by some private and not-for-profit affordable housing providers in South East Queensland, and draw conclusions about the relationship between risk assessments/responses and past experiences.----- Design/methodology/approach: In-depth interviews of selected non-government housing providers have been conducted to facilitate an understanding of their approach to risk assessment in developing and in managing affordable housing projects. Qualitative data are analysed using thematic analysis to find emerging themes suggested by interview participants.----- Findings: The paper finds that informal risk management process is used as part of normal business process in accordance with industry standards. Many interviewees agree that the recognition of financial risk and the fear of community rejection of such housing projects have restrained them from committing to such investment projects. The levels of acceptance of risk are not always consistent across housing providers which create opportunities to conduct multi-stakeholder partnership to reduce overall risk.----- Research limitations/implications: The paper has implications for developers or investors who seek to include affordable housing as part of their portfolio. However, data collected in the study are a cross-section of interviews that will not include the impact on recent tax incentives offers by the Australian Commonwealth Government.----- Practical implications: The study suggests that implementing improvements to the risk mitigation and management framework may assist in promoting the supply of affordable housing by non-government providers.----- Originality/value: The focus of the study is the interaction between partnerships and risk management in development and management of affordable rental housing.

Sustainable housing implementation through mutual benefits to stakeholders : a decision making approach

Improved public awareness and strong sentiments towards environmental issues will continue to create increasing demand for sustainable housing (SH) in the coming years. Despite this potential, the up-take rate of sustainable housing in new build and through home renovation is not as high as expected within the housing industry. This is in contrast to the influx of emerging building technologies, new materials and innovative designs seen in exemplar homes built worldwide. How we should use the increasing awareness of SH and emerging technologies as an impetus to change the un-sustainable designs and practices of the building industry is high on the agenda of the government and majority of the stakeholders involved. This warrants the study of multifaceted strategies that meet the needs of multiple stakeholders and integrated seamlessly into housing development processes. Specifically, the different perceptions, roles and incentives of stakeholders, who inevitably need to ensure their benefits and commercial returns, should be highlighted and acted upon. ----- This paper discusses the preliminary findings of a research project that aims to promote SH implementation by identifying and materializing the mutual benefits among key stakeholders. The aim is to be achieved through questionnaire surveys, structural equation modelling, interviews and case studies with seven major stakeholders within the Australian housing industry. This research identifies the influence and relationship of relevant factors, investigates preferences, similarities and differences between stakeholders on perceived benefits and in turn explores the mutual-benefit strategy package that facilitates decision making towards sustainable housing development.

Indoor environment sustainability of residential industrial housing in Malaysia

The importance of sustainable development has been internationally recognized and the principles have been widely used as an impetus for promoting housing sustainability. In the situation of mixed-use urban development in close proximity to heavy industrial areas in Malaysia, rising incomes are developing hand in hand with higher expectations for better and more sustainable housing designs. Negative environmental impacts due current deficiency in Malaysia’s approach to the implementation of sustainable development principles can be seen in this case study of the Pasir Gudang Industrial Area in Malaysia. This study aimed to highlight the level of residents’ satisfaction with living near the industrial area, and to relate their awareness of the relevance of sustainable principles with indoor environmental conditions, which found that the residents’ has limited understanding of the environmental problems in their indoor living conditions and in their neighborhoods. This study has suggested that proactive and integrated involvement by housing authorities from all levels of government in Malaysia should be encouraged in order to rationalise the approaches to develop better planning solutions for such mixed-used urban developments. This initiative should then encourage housing vendors to provide innovative ‘smart’ technological changes to their projects and so, to achieve a new direction in sustainable housing development.

Building a successful partnership to increase affordable rental housing supply in Queensland

Accessibility to housing for low to moderate income groups in Australia has been experiencing a severe decline since 2001. On the supply side, the public sector has been reducing its commitment to the direct provision of public housing. Despite high demand for affordable housing, there has been limited supply generated by non-government housing providers. One possible solution to promote an increase in affordable housing supply, like other infrastructure, is through the development of multi-stakeholder partnerships and private financing. This research aims to identify current issues underlying decision-making criteria for building multi-stakeholder partnerships to deliver affordable housing projects. It also investigates strategies for minimising risk and ensuring the financial outcomes of these partnership arrangements. A mix of qualitative in-depth interviews and quantitative surveys has been used as the main method to explore stakeholder experiences regarding their involvement in partnership arrangements in the affordable housing sector in Queensland. Two sets of interviews were conducted following an exploratory pilot study: one set in 2003-2004 and the other in 2007-2008. There were nineteen respondents representing government, private and not-for-profit organisations in the first stage interviews and surveys. The second stage interviews were focussed on twenty-two housing providers in South East Queensland. Initial analyses have been conducted using thematic and statistical analyses. This study extends the use of existing decision making tools and combines the use of a Soft System Framework to analyse the ideal state questionnaires using qualitative thematic analysis. Soft System Methodology (SSM) has been used to analyse this unstructured complex problem by using systematic thinking to develop a conceptual model and carrying it to the real world situations to solve the problem. This research found that the diversity of stakeholder capability and their level of risk acceptance will allow partnerships to develop the best synergies and a degree of collaboration which achieves the required financial return within acceptable risk parameters. However, some of the negativity attached to future commitment to such partnerships has been found to be the anticipation of a worse outcome than that expected from independent action. Many interviewees agree that housing providers' fear of financial risk and community rejection has been central to dampening their enthusiasm for entering such investment projects. The creation of a mixed-use development structure will mitigate both risk and return as the commercial income will subsidise the affordable housing development and will normalise concentration of marginalised low-income people who live in a prime location with an award winning design. In addition, tenant support schemes and rent-to-buy incentive programs will encourage them to secure their tenancies and significantly reduce the risk of rent arrears and property damage. There is also a breakthrough investment vehicle offered by the social developer which sells the non-physical but financial product to individual and institutional investors to mitigate further financial risk. Finally, this study recommends modification of the current value-for-money framework in favour of broader partnership arrangements which are more closely aligned with risk minimisation strategies.