Approaches for calculation of holding costs in the context of greenfield residential development

There are increasing indications that the contribution of holding costs and its impact on housing affordability is very significant. Their importance and perceived high level impact can be gauged from considering the unprecedented level of attention policy makers have given them recently. This may be evidenced by the embedding of specific strategies to address burgeoning holding costs (and particularly those cost savings associated with streamlining regulatory assessment) within statutory instruments such as the Queensland Housing Affordability Strategy, and the South East Queensland Regional Plan. However, several key issues require further investigation. Firstly, the computation and methodology behind the calculation of holding costs varies widely. In fact, it is not only variable, but in some instances completely ignored. Secondly, some ambiguity exists in terms of the inclusion of various elements of holding costs and assessment of their relative contribution. Perhaps this may in part be explained by their nature: such costs are not always immediately apparent. They are not as visible as more tangible cost items associated with greenfield development such as regulatory fees, government taxes, acquisition costs, selling fees, commissions and others. Holding costs are also more difficult to evaluate since for the most part they must be ultimately assessed over time in an ever-changing environment based on their strong relationship with opportunity cost which is in turn dependant, inter alia, upon prevailing inflation and / or interest rates. This paper seeks to provide a more detailed investigation of those elements related to holding costs, and in so doing determine the size of their impact specifically on the end user. It extends research in this area clarifying the extent to which holding costs impact housing affordability. Geographical diversity indicated by the considerable variation between various planning instruments and the length of regulatory assessment periods suggests further research should adopt a case study approach in order to test the relevance of theoretical modelling conducted.

Preliminary modelling outcomes : calculation of holding costs in greenfield residential development

Many of the costs associated with greenfield residential development are apparent and tangible. For example, regulatory fees, government taxes, acquisition costs, selling fees, commissions and others are all relatively easily identified since they represent actual costs incurred at a given point in time. However, identification of holding costs are not always immediately evident since by contrast they characteristically lack visibility. One reason for this is that, for the most part, they are typically assessed over time in an ever-changing environment. In addition, wide variations exist in development pipeline components: they are typically represented from anywhere between a two and over sixteen years time period - even if located within the same geographical region. Determination of the starting and end points, with regards holding cost computation, can also prove problematic. Furthermore, the choice between application of prevailing inflation, or interest rates, or a combination of both over time, adds further complexity. Although research is emerging in these areas, a review of the literature reveals attempts to identify holding cost components are limited. Their quantification (in terms of relative weight or proportionate cost to a development project) is even less apparent; in fact, the computation and methodology behind the calculation of holding costs varies widely and in some instances completely ignored. In addition, it may be demonstrated that ambiguities exists in terms of the inclusion of various elements of holding costs and assessment of their relative contribution. Yet their impact on housing affordability is widely acknowledged to be profound, with their quantification potentially maximising the opportunities for delivering affordable housing. This paper seeks to build on earlier investigations into those elements related to holding costs, providing theoretical modelling of the size of their impact - specifically on the end user. At this point the research is reliant upon quantitative data sets, however additional qualitative analysis (not included here) will be relevant to account for certain variations between expectations and actual outcomes achieved by developers. Although this research stops short of cross-referencing with a regional or international comparison study, an improved understanding of the relationship between holding costs, regulatory charges, and housing affordability results.

Neighborhood sustainability assessment : evaluating residential development sustainability in a developing country context

Rapid urbanization, improved quality of life, and diversified lifestyle options have collectively led to an escalation in housing demand in our cities, where residential areas, as the largest portion of urban land use type, play a critical role in the formation of sustainable cities. To date there has been limited research to ascertain residential development layouts that provide a more sustainable urban outcome. This paper aims to evaluate and compare sustainability levels of residential types by focusing on their layouts. The paper scrutinizes three different development types in a developing country context—i.e., subdivision, piecemeal, and master-planned developments. This study develops a “Neighborhood Sustainability Assessment” tool and applies it to compare their sustainability levels in Ipoh, Malaysia. The analysis finds that the master-planned development, amongst the investigated case studies, possesses the potential to produce higher levels of sustainability outcomes. The results reveal insights and evidence for policymakers, planners, development agencies and researchers; advocate further studies on neighborhood-level sustainability analysis, and; emphasize the need for collective efforts and an effective process in achieving neighborhood sustainability and sustainable city formation.

Competing and Conflicting Land Uses at the Rural-Urban Interface: Understanding the Impacts of Residential Development on Agricultural Landscapes

Rural communities are currently undergoing rapid restructuring as globalization impacts the future viability of many small towns. Agricultural regions throughout Canada, in particular, Niagara-on-the-Lake, are forced to adapt to changes within the industry. In addition to these challenges, sprawling residential developments from nearby urban centres are changing the dynamic of this town, resulting in conflicts between the residential and agricultural land uses. This thesis explores these conflicts from the perspective of the residents and the farmers. It was found that the initial sources of conflict related to noise-generating farm activities are no longer a concern, while the use of pesticide have become a source of contention among the residents. The farmers, alternately, were found to be proactive and strived to limit the potential for conflict with adjacent residents. Lastly, it was determined that planning legislation aggravates land use conflicts within Niagara-on-the-Lake and need to better address these land use conflicts.

A tapestry of land uses and land covers typify our study site. Here, a commercial farm surrounds a new residential development.

This material is based upon work supported by the National Science Foundation through the Florida Coastal Everglades Long-Term Ecological Research program under Cooperative Agreements #DBI-0620409 and #DEB-9910514. This image is made available for non-commercial or educational use only.

Sustainable urban development : formulation of indicator-based residential sustainability assessment framework for local level

Purpose–The purpose of this paper is to formulate a conceptual framework for urban sustainability indicators selection. This framework will be used to develop an indicator-based evaluation method for assessing the sustainability levels of residential neighbourhood developments in Malaysia. Design/methodology/approach–We provide a brief overview of existing evaluation frameworks for sustainable development assessment. We then develop a conceptual Sustainable Residential Neighbourhood Assessment (SNA) framework utilising a four-pillar sustainability framework (environmental, social, economic and institutional) and a combination of domain-based and goal-based general frameworks. This merger offers the advantages of both individual frameworks, while also overcoming some of their weaknesses when used to develop the urban sustainability evaluation method for assessing residential neighbourhoods. Originality/value–This approach puts in evidence that many of the existing frameworks for evaluating urban sustainability do not extend their frameworks to include assessing housing sustainability at a local level. Practical implications–It is expected that the use of the indicator-based Sustainable Neighbourhood Assessment framework will present a potential mechanism for planners and developers to evaluate and monitor the sustainability performance of residential neighbourhood developments.

Whole life cycle costing for Malaysia residential property development : the cultural environment

As knowledge of the residential development costing impact on resource and budgeting use increase, developers are moving towards more sustainable solution by implementing whole life cycle costing. Property management requires an understanding of infrastructure management, service life planning and quality management. Today, people are beginning to realize that effective property management in high-rise residential property can sustain the property value and maintain high returns on their investment. The continuous growth of high-rise residential properties indicates that there is a need for an effective property management system to provide a sustainable high-rise residential property development. For such reasons, this paper attempts to study the culture that have been applied due the residential property development in Malaysia as to improve to the best and sustainable practice in providing the best cost effectiveness management system in residential property development.

Framework of whole life cycle costing for Malaysian high rise residential property development

This project was an initial stage in formulating and management of the optimum budget allocation during the operational, maintenance and rehabilitation phases in high rise residential property development in Malaysia. The principal objective of this project is to develop a framework of Whole Life Cycle Costing for high rise residential property development that will enhance the quality and cost effectiveness of this building type in Malaysia. The researcher investigated 13 building components from 6 high rise residential property developments in Johor, Malaysia to determine the affect and economic impact of component initial cost and quality by applying them to a Whole Life Cycle Cost model approach. The results provide valuable data in respect to the overall cost of specific components over the whole life of a large high rise building. In addition, Dr. Mat Noor also determined the impact and satisfaction of quality of building components through WLCC.

Impact of past and future residential housing development patterns on energy demand and related emissions

The continued outward growth from a central business district has been the dominant characteristic of most cities in Australia. However, this feature is seen as unsustainable and alternative scenarios to contain the outward growth are being proposed. Melbourne is currently grappling with this issue while simultaneously trying to reduce per capita greenhouse gas emissions. Housing size, style and its location are the three principal factors which determine the emissions from the residential sector. This paper describes a methodology to assess the combined impact of these factors on past and possible future forms of residential development in Melbourne. The analysis found that the location of the housing and its size are the dominant factors determining energy use and greenhouse gas emissions.

Sustainable urban development : a quadruple bottom line assessment framework

Sustainable development has long been promoted as the best answer to the world's environmental problems. This term has generated mass appeal as it implies that the development of the built environment and its associated resource consumption can both be achieved without jeopardising the natural environment. In the urban context, sustainability issues have been reflected in the pomotion of sustainable urbanisation in a manner that allows future generations to repeat this process. This paper attempts to highlight an increasing urgency in formulating a suitable model for assessing sustainability at urban level, because this is where the bulk of a nation's population reside, and where sustainability problems mostly occur. It will also point out to the increasing importance of governance in facilitating urban sustainability research. This assessment involves the use of physical, social, environmental and goverance aspects in assessing the extent to which development of an urban settlement is sustainable. Specifically, this assessment model is carried out to determine whether or not sustainable urban development pratice is implemented in the provision of residential development, and in particular whether the development of master-planned residential communities have more desireable outcomes compared to traditional residential subdivision.

An assessment of development funding for new housing post GFC in Queensland, Australia

Purpose: The purpose of this paper is to identify changes in bank lending criteria due to the GFC and to explore the associated impacts on new housing supply in Queensland, Australia. Design/methodology/approach: This research involves a survey of each of Australia’s big four banks, as well as two prominent arrangers of development finance. Data on key lending criteria was collected: Pre GFC, during the GFC, and GFC recovery stage. Findings: The GFC has resulted in a retraction of funds available for residential development. The few institutions lending are filtering out only the best credit risks by way of constrictive loan covenants including: low loan to value ratios, high cash equity requirements, regional “no go” zones, and demonstrated borrower track record. The ability of developers to proceed with new housing developments is being constrained by their inability to obtain sufficient finance. Research limitations/implications: This research uses survey data, together with an understanding of the project finance process to extrapolate impacts on the residential development industry across Queensland. No regional or sub-market analysis is included. Future research will include subsequent surveys to track any loosening of credit policies over time and sub-market sector analysis. Practical implications: The inability to obtain project finance is identified as a key constraint to new housing supply. This research will inform policy makers and provide important quantitative evidence of the importance of availability of development finance in the housing supply chain. Social implications: Queensland is facing a supply shortfall, which if not corrected, may lead to upward pressure on house prices and falling housing affordability. Originality/value: There is very little academic research on development funding. This research is unique in linking bank lending criteria to new housing supply and demonstrating the impact on the development industry.

An analysis of holding cost impact on housing affordability in relation to midsized Greenfield residential property developments in South East Queensland

The position of housing demand and supply is not consistent. The Australian situation counters the experience demonstrated in many other parts of the world in the aftermath of the Global Financial Crisis, with residential housing prices proving particularly resilient. A seemingly inexorable housing demand remains a critical issue affecting the socio-economic landscape. Underpinned by high levels of population growth fuelled by 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 level ensures problems related to housing affordability continue almost unabated. A significant, but less visible factor impacting housing affordability relates to holding costs. Although only one contributor in the housing affordability matrix, the nature and extent of holding cost impact requires elucidation: for example, the computation and methodology behind the calculation of holding costs varies widely - and in some instances completely ignored. In addition, ambiguity exists in terms of the inclusion of various elements that comprise holding costs, thereby affecting the assessment of their relative contribution. Such anomalies may be explained by considering that assessment is conducted over time in an ever-changing environment. A strong relationship with opportunity cost - in turn dependant inter alia upon prevailing inflation and / or interest rates - adds further complexity. By extending research in the general area of housing affordability, this thesis seeks to provide a detailed investigation of those elements related to holding costs specifically in the context of midsized (i.e. between 15-200 lots) greenfield residential property developments in South East Queensland. With the dimensions of holding costs and their influence over housing affordability determined, the null hypothesis H0 that holding costs are not passed on can be addressed. Arriving at these conclusions involves the development of robust economic and econometric models which seek to clarify the componentry impacts of holding cost elements. An explanatory sequential design research methodology has been adopted, whereby the compilation and analysis of quantitative data and the development of an economic model is informed by the subsequent collection and analysis of primarily qualitative data derived from surveying development related organisations. Ultimately, there are significant policy implications in relation to the framework used in Australian jurisdictions that promote, retain, or otherwise maximise, the opportunities for affordable housing.

Measuring neighbourhood sustainability : a comparative analysis of residential types in Malaysia

The expansion of city-regions, the increase in the standard of living and changing lifestyles have collectively led to an increase in housing demand. New residential areas are encroaching onto the city fringes including suburban and green field areas. Large and small developers are actively building houses ranging from a few blocks to master-planned style projects. These residential developments, particularly in major urban areas, represent a large portion of urban land use in Malaysia, and, thus, have become a major contributor to overall urban sustainability. There are three main types that comprise the mainstream, and form integral parts to contemporary urban residential developments, namely, subdivision developments, piecemeal developments, and master-planned developments. Many new master-planned developments market themselves as environmentally friendly, and provide layouts that encompass sustainable design and development. To date, however, there have been limited studies conducted to examine such claims or to ascertain which of these three residential development layouts is more sustainable. To fill this gap, this research was undertaken to develop a framework for assessing the level of sustainability of residential developments, focusing on their layouts at the neighbourhood level. The development of this framework adopted a mixed method research strategy and embedded research design to achieve the study aim and objectives. Data were collected from two main sources, where quantitative data were gathered from a three-round Delphi survey and spatial data from a layout plan. Sample respondents for surveys were selected from among experts in the field of the built environment, both from Malaysia and internationally. As for spatial data, three case studies – master-planned, piecemeal and subdivision developments representing different types of neighbourhood developments in Malaysia have been selected. Prior to application on the case studies, the appropriate framework was subjected to validation to ascertain its robustness for application in Malaysia. Following the application of the framework on the three case studies the results revealed that master-planned development scored a better level of sustainability compared to piecemeal and subdivision developments. The results generated from this framework are expected to provide evidence to the policy makers and development agencies as well as provide an awareness of the level of sustainability and the necessary collective efforts required for developing sustainable neighbourhoods. Continuous assessment can facilitate a comparison of sustainability over time for neighbourhoods as a means to monitor changes in the level of sustainability. In addition, the framework is able to identify any particular indicator (issue) that causes a significant impact on sustainability.