To fix the housing crisis, we need to decide what success would look like

Building houses in Ilford, 1947. Image: Getty.

Recent years have seen growing public and political recognition that there is a crisis in housing. This has led to a widening debate on the causes and potential solutions.

However, within this debate there has been little in the way of a consensus view of what constitutes the current housing crisis – or what a “crisis-free” housing system might look like. There seems little clear idea of any measurable goal. The nearest we have as a target to aim at has been a series of aspirational numbers for new-build homes, with limited clarity on what to expect if we were to hit those numbers.

Clarity about what success would look like is essential. Without a framework for what we need and want from housing, our ability to understand and fix it appropriately will be compromised. A lack of clarity also increases the risk of unintended consequences from misguided policy interventions.

The current housing debate is, to quote UCL’s Michael Edwards, “bedevilled by rival simplifications”. There are several, quite often competing explanations for why we have a housing crisis. For many it is our failure to build homes at the same rate as projected household formation. This failure might be assigned to the planning system, the greenbelt, housebuilder business models, the land market, or NIMBYs.

For others, the crisis is a result of falling interest rates, rising credit supply, low income growth, wealth and income inequality, tax incentives, or simply our fixation on house price growth. For some, there is no shortage of homes, rather a poor distribution. And for others there isn’t really a housing crisis.

Despite the apparent contradictions in this mix of positions, each of the arguments that support these various views may hold significant elements of truth. Housing is a complex and interconnected system within the economy and society. There is no simple single housing market: there are multiple markets defined by location, property type, tenure, and price. Therefore, there is no simple single housing crisis. Instead we have multiple overlapping issues affecting different parts of the country in different ways and to varying degrees.

There may be factors that influence all housing markets across the UK, indeed across much of the globe. There will be others that impact more locally and within specific housing sectors.

So, for instance, there is growing acceptance by many experts that the cost and availability of credit has been one of the biggest, if not the biggest, drivers of increases in national house prices over the last twenty years.


But it is not the only factor. The growth in buy-to-let has contributed to the financialisation of housing, with homes increasingly thought of as an investment rather than a place for people to live. A lack of supply is predominantly an issue for London and its surrounds, but there are localised shortages elsewhere, particularly of specific types or tenure of homes.

Planning (including a lack of) and the land market limit the responsiveness of supply to rising demand. Housing is unevenly distributed, mostly across generations but also spatially and within generations. Some areas don’t need a net increase in housing but desperately need existing poor-quality homes improved or replaced. In many areas the biggest issue is low (or negative) income growth and employment insecurity.

All these issues and others play a part in defining “the housing crisis”. Having a framework for what we need and want from housing, combined with an understanding of the complexities and interactions that run through the housing market, is essential to resolving the problems they create.

The problem with ‘households’

A misunderstanding of the complexities of housing can be found in one of the most frequently stated explanations for the crisis: a lack of new supply compared with household projections.

Unfortunately, this argument is flawed. Household projections are not a measure of housing demand. The effective demand for new housing is determined by the number of people or companies willing and financially able to buy property. Meanwhile new supply only accounts for around 12 per cent of total transactions and probably less of available homes for sale.

Importantly, even if some analysis may suggest there is no shortage of supply, that does not mean there is no need for new supply. Household projections are a statistical construct based on the past, not a direct measure of future housing demand. But they are still important if used appropriately within a framework for what we need and want from housing.

If we are more explicit about the role of household projections in measuring housing need and the assumptions they contain, then the ‘supply versus household projections’ argument might be recast as a debate on changing household sizes and the consumption of housing (both in terms of space and multiple properties).

This then implies that we should be clearer about the minimum acceptable amount of housing people need, while also accounting for what they want. Should younger people still expect to form households at the same rate and size as their parents? The assumptions and projections around future household sizes should be moved from the background, where they are typically only discussed by planners and researchers, to the centre of the debate.

They should be just one part of a framework for success that explicitly states what we need and want from housing – not just in terms of size but also cost, tenure, quality, security, and location – and better defines the minimum we are prepared to accept. That will provide a clearer understanding of where housing is failing to meet those requirements and help set objectives for how to fix it. These could then be applied appropriately across different markets.

“Rather than trying to return to the relatively short-lived 20th century ideal of mass home-ownership, perhaps we should be focussing our efforts on making renting cheaper”

If measurement against the framework shows that households are not able to form at an appropriate rate and size relative to what they need, then we probably need to increase supply while possibly encouraging older households to move out of larger homes. If rents are too expensive then we may need to reform the rental sectors and increase supply. If housing quality is poor, then we need to work harder at improving and replacing existing stock. If many areas are struggling due to low (or negative) income growth and employment insecurity, then we probably need to look beyond just housing. It might even question whether we need to rebalance the economy and infrastructure investment away from London and its commuter zone.

Having a framework for success may even highlight which issues we can fix and which we can’t. For example, it looks likely that we are stuck with a low interest rate and hence high house price to income market. Under those conditions, prospective first-time buyers will continue to struggle to raise a deposit and access home-ownership irrespective of how much new supply can be realistically delivered.

Rather than trying to return to the relatively short-lived 20th century ideal of mass home-ownership, perhaps we should be focussing our efforts on making renting cheaper, higher quality, and more secure as a long-term home. Increasing new supply would be an important tool in achieving that outcome.

When we have a framework for what success could look like, our ability to understand and fix housing appropriately will be dramatically improved. It would be an important step towards making housing available, affordable, and appropriate for everyone that needs it. It would also be more useful than simply setting a nice round number national target for new homes.

Neal Hudson is an independent housing analyst, who tweets as @resi_analyst. This article originally appeared on his blog.

 
 
 
 

Uncertainty is the new normal: the case for resilience in infrastructure

Members of the New York Urban Search and Rescue Task Force One help evacuate people from their homes in Fayetteville, North Carolina, in September 2018. Image: Getty.

The most recent international report on climate change paints a picture of disruption to society unless there are drastic and rapid cuts in greenhouse gas emissions. And although it’s early days, some cities and municipalities are starting to recognise that past conditions can no longer serve as reasonable proxies for the future.

This is particularly true for America’s infrastructure. Highways, water treatment facilities and the power grid are at increasing risk to extreme weather events and other effects of a changing climate.

The problem is that most infrastructure projects, including the Trump administration’s infrastructure revitalisation plan, typically ignore the risks of climate change.

In our work researching sustainability and infrastructure, we encourage and are starting to shift toward designing man-made infrastructure systems with adaptability in mind.

Designing for the past

Infrastructure systems are the front line of defense against flooding, heat, wildfires, hurricanes and other disasters. City planners and citizens often assume that what is built today will continue to function in the face of these hazards, allowing services to continue and to protect us as they have done so in the past. But these systems are designed based on histories of extreme events.

Pumps, for example, are sized based on historical precipitation events. Transmission lines are designed within limits of how much power they can move while maintaining safe operating conditions relative to air temperatures. Bridges are designed to be able to withstand certain flow rates in the rivers they cross. Infrastructure and the environment are intimately connected.

Now, however, the country is more frequently exceeding these historical conditions and is expected to see more frequent and intense extreme weather events. Said another way, because of climate change, natural systems are now changing faster than infrastructure.

How can infrastructure systems adapt? First let’s consider the reasons infrastructure systems fail at extremes:

  • The hazard exceeds design tolerances. This was the case of Interstate 10 flooding in Phoenix in fall 2014, where the intensity of the rainfall exceeded design conditions.

  • During these times there is less extra capacity across the system: When something goes wrong there are fewer options for managing the stressor, such as rerouting flows, whether it’s water, electricity or even traffic.

  • We often demand the most from our infrastructure during extreme events, pushing systems at a time when there is little extra capacity.

Gradual change also presents serious problems, partly because there is no distinguishing event that spurs a call to action. This type of situation can be especially troublesome in the context of maintenance backlogs and budget shortfalls which currently plague many infrastructure systems. Will cities and towns be lulled into complacency only to find that their long-lifetime infrastructure are no longer operating like they should?

Currently the default seems to be securing funding to build more of what we’ve had for the past century. But infrastructure managers should take a step back and ask what our infrastructure systems need to do for us into the future.


Agile and flexible by design

Fundamentally new approaches are needed to meet the challenges not only of a changing climate, but also of disruptive technologies.

These include increasing integration of information and communication technologies, which raises the risk of cyberattacks. Other emerging technologies include autonomous vehicles and drones as well as intermittent renewable energy and battery storage in the place of conventional power systems. Also, digitally connected technologies fundamentally alter individuals’ cognition of the world around us: consider how our mobile devices can now reroute us in ways that we don’t fully understand based on our own travel behavior and traffic across a region.

Yet our current infrastructure design paradigms emphasise large centralized systems intended to last for decades and that can withstand environmental hazards to a preselected level of risk. The problem is that the level of risk is now uncertain because the climate is changing, sometimes in ways that are not very well-understood. As such, extreme events forecasts may be a little or a lot worse.

Given this uncertainty, agility and flexibility should be central to our infrastructure design. In our research, we’ve seen how a number of cities have adopted principles to advance these goals already, and the benefits they provide.

A ‘smart’ tunnel in Kuala Lumpur is designed to supplement the city’s stormwater drainage system. Image: David Boey/creative commons.

In Kuala Lampur, traffic tunnels are able to transition to stormwater management during intense precipitation events, an example of multifunctionality.

Across the U.S., citizen-based smartphone technologies are beginning to provide real-time insights. For instance, the CrowdHydrology project uses flooding data submitted by citizens that the limited conventional sensors cannot collect.

Infrastructure designers and managers in a number of U.S. locations, including New York, Portland, Miami and Southeast Florida, and Chicago, are now required to plan for this uncertain future – a process called roadmapping. For example, Miami has developed a $500m plan to upgrade infrastructure, including installing new pumping capacity and raising roads to protect at-risk oceanfront property.

These competencies align with resilience-based thinking and move the country away from our default approaches of simply building bigger, stronger or more redundant.

Planning for uncertainty

Because there is now more uncertainty with regard to hazards, resilience instead of risk should be central to infrastructure design and operation in the future. Resilience means systems can withstand extreme weather events and come back into operation quickly.

Microgrid technology allows individual buildings to operate in the event of a broader power outage and is one way to make the electricity system more resilient. Image: Amy Vaughn/U.S. Department of Energy/creative commons.

This means infrastructure planners cannot simply change their design parameter – for example, building to withstand a 1,000-year event instead of a 100-year event. Even if we could accurately predict what these new risk levels should be for the coming century, is it technically, financially or politically feasible to build these more robust systems?

This is why resilience-based approaches are needed that emphasise the capacity to adapt. Conventional approaches emphasise robustness, such as building a levee that is able to withstand a certain amount of sea level rise. These approaches are necessary but given the uncertainty in risk we need other strategies in our arsenal.

For example, providing infrastructure services through alternative means when our primary infrastructure fail, such as deploying microgrids ahead of hurricanes. Or, planners can design infrastructure systems such that when they fail, the consequences to human life and the economy are minimised.

The Netherlands has changed its system of dykes and flood management in certain areas to better sustain flooding.

This is a practice recently implemented in the Netherlands, where the Rhine delta rivers are allowed to flood but people are not allowed to live in the flood plain and farmers are compensated when their crops are lost.

Uncertainty is the new normal, and reliability hinges on positioning infrastructure to operate in and adapt to this uncertainty. If the country continues to commit to building last century’s infrastructure, we can continue to expect failures of these critical systems, and the losses that come along with them.

The Conversation

Mikhail Chester, Associate Professor of Civil, Environmental, and Sustainable Engineering, Arizona State University; Braden Allenby, President's Professor and Lincoln Professor of Engineering and Ethics, School of Sustainable Engineering and the Built Environment, Ira A. Fulton Schools of Engineering, Arizona State University, and Samuel Markolf, Postdoctoral Research Associate, Urban Resilience to Extremes Sustainability Research Network, Arizona State University.

This article is republished from The Conversation under a Creative Commons license. Read the original article.