If you want to make new affordable housing, don't just think about the purchase price

Houses under construction in Sydney. Image: Getty.

Solving the affordable housing crisis is a high priority for state governments around Australia. The Conversation

This is understandable given the hyper-inflated property markets in many Australian capital cities. Rising concerns that interest rates will increase over coming years also fuel the unaffordability fires.

Proposed solutions to this crisis often focus on opening up new greenfield areas of land in the outer suburbs to develop lower-cost housing. Hence, the solution to the affordable housing process is often thought to lie in creating housing with a low purchase price. This approach incentivises developers and housing suppliers to keep the price of new housing stock as low as possible.

But this leads to houses that are more costly to own and maintain. Construction savings on features such as insulation, passive solar design, and heating and cooling systems mean such houses have high energy demands. That, in turn, means ongoing living costs such as the cost of air conditioning remain high for the life of the house.

Such houses are also constructed to the minimum standards dictated by the building codes. Poorer design and lower-quality materials can lead to large deferred maintenance costs and lower resilience to natural hazards.

In addition, housing in the outer suburbs has poorer prospects for capital growth, effectively trapping poorer households on the fringes of our cities. The residents of these suburbs also generally face higher transport costs to get to work and services.

We are, in effect, encouraging new home owners to take on larger future risks and costs just so they can buy a house. This keeps government happy by increasing the number of new home owners – a proxy for affordable housing.

But this approach ignores the issue that home owners increasingly cannot afford to continue to own a home, not just buy one.


Exposed to future risks

Increasingly, the first cost-saving action for struggling home owners is to be uninsured or underinsured. About 14 per cent per cent of people have no home or contents insurance whatsoever.

Of those who are insured, many know they are not adequately covered. Back in 2012 it was identified that around one-quarter of home owners and renters had no insurance cover for house contents. Other estimates suggest that nearly one-third of households in Australia remain uninsured. Other studies more recently concluded that 41 per cent of tenants do not have contents insurance.

Events like the recent Cyclone Debbie remind us just how exposed many families are to natural hazards, including physical damage to assets and the associated emotional hardship.

In many cases, families have been financially wiped out as a result of their lack of insurance coverage. These families then go back onto the long waiting list for affordable social housing.

Therefore, by defining affordable housing in terms of only purchase price of housing and number of new home owners, we are dramatically understating the problem of housing affordability.

By facilitating families to invest in houses that require high energy demands to be liveable, and which are located in areas increasingly exposed to natural hazards while households are uninsured or underinsured, we are simply mismanaging the affordable housing challenge.

Reframing affordability

A key action that can be taken is to frame housing affordability in terms of whole-of-ownership-life costs. This means we move away from defining affordable housing in terms of the initial capital cost and instead consider the total cost of owning a house over the term of ownership.

This approach explicitly encapsulates the risks of under-insurance and higher interest rates.

This is the approach used when funding infrastructure and major utilities assets. When planning major infrastructure, cost-benefit analyses must now consider the whole-of-life costs. This is to account for enthusiastic infrastructure advocates deferring costs through to increased maintenance obligations so the capital costs remains low, and hence the project becomes more attractive.

It’s the same for housing development. Therefore, the same approach needs to be adopted for home ownership.

Mark Gibbs is chair of Green Cross Australia at Queensland University of Technology.

This article was originally published on The Conversation. Read the original article.

 
 
 
 

Covid-19 is highlighting cities' unequal access to green space

In the UK, Londoners are most likely to rely on their local park for green space, and have the best access to parks. (Leon Neal/Getty Images)

As coronavirus lockdowns ease, people are flooding back to parks – but not everyone has easy access to green space in their city.

Statistics from Google show that park attendance in countries across the globe has shot up as people have been allowed to move around their cities again.

This is especially true in urban areas, where densely populated neighbourhoods limit the size of private green space – meaning residents have to go to the park to get in touch with nature. Readers from England can use our interactive tool below to find out how much green space people have access to in their area, and how it compares to the rest of the country.

 

Prime Minister Boris Johnson’s announcement Monday that people are allowed to mingle in parks and gardens with groups of up to six people was partially following what people were doing already.

Data from mobile phones show people have been returning to parks across the UK, and also across Europe, as weather improves and lockdown eases.

People have been returning to parks across the world

Stay-at-home requirements were eased in Italy on 4 May, which led to a flood of people returning to parks.

France eased restrictions on 1 May, and the UK eased up slightly on 13 May, allowing people to sit down in public places so long as they remain socially distanced.

Other countries have seen park attendance rise without major easing of lockdown – including Canada, Spain, and the US (although states there have individual rules and some have eased restrictions).

In some countries, people never really stopped going to parks.

Authorities in the Netherlands and Germany were not as strict as other countries about their citizens visiting local parks during lockdown, while Sweden has famously been avoiding placing many restrictions on people’s daily lives.


There is a growing body of evidence to suggest that access to green space has major benefits for public health.

A recent study by researchers at the University of Exeter found that spending time in the garden is linked to similar benefits for health and wellbeing as living in wealthy areas.

People with access to a private garden also had higher psychological wellbeing, and those with an outdoor space such as a yard were more likely to meet physical activity guidelines than those without access to outdoor space. 

Separate UK research has found that living with a regular view of a green space provides health benefits worth £300 per person per year.

Access is not shared equally, however, which has important implications for equality under lockdown, and the spread of disease.

Statistics from the UK show that one in eight households has no garden, making access to parks more important.

There is a geographic inequality here. Londoners, who have the least access to private gardens, are most likely to rely on their local park for green space, and have the best access to parks. 

However the high population in the capital means that on the whole, green space per person is lower – an issue for people living in densely populated cities everywhere.

There is also an occupational inequality.

Those on low pay – including in what are statistically classed as “semi-skilled” and “unskilled” manual occupations, casual workers and those who are unemployed – are almost three times as likely as those in managerial, administrative, professional occupations to be without a garden, meaning they rely more heavily on their local park.

Britain’s parks and fields are also at significant risk of development, according to new research by the Fields in Trust charity, which shows the number of people living further than a 10-minute walk from a public park rising by 5% over the next five years. That loss of green spaces is likely to impact disadvantaged communities the most, the researchers say.

This is borne out by looking at the parts of the country that have private gardens.

The least deprived areas have the largest gardens

Though the relationship is not crystal clear, it shows at the top end: Those living in the least deprived areas have the largest private green space.

Although the risk of catching coronavirus is lower outdoors, spending time in parks among other people is undoubtedly more risky when it comes to transmitting or catching the virus than spending time in your own outdoor space. 

Access to green space is therefore another example – along with the ability to work from home and death rates – of how the burden of the pandemic has not been equally shouldered by all.

Michael Goodier is a data reporter at New Statesman Media Group, and Josh Rayman is a graphics and data visualisation developer at New Statesman Media Group.