Australia has one of the world’s least affordable housing markets. Australian housing prices rose 10 per cent in the last financial year, 2013/2014, according to Dr. Steven Kirchner, Research Fellow at the Centre for Independent Studies. In the same time period, prices in Sydney rose 15 per cent.
As part of a decades-long trend, “house prices have increased at an average rate of about three per cent per annum after inflation since 1970,” Dr Kirchner noted.
The Australian Housing and Urban Research Institute notes that measures denoting what constitutes housing affordability stress “are a topic of debate,” though the 30/40 rule is commonly used. The rule refers to people who must spend “more than 30 per cent of their income on housing, while earning in the bottom 40 per cent of the income range.”
The McKinsey Global Institute defines affordable housing as that requiring no more than 30 per cent of income.
Kirchner also noted that drivers on the demand side include declining interest rates, rising incomes, and population growth. Those factors notwithstanding, “it’s not that there is too much demand, but there is too little supply,” Kirchner said.
“The solution to the housing affordability problem is to free up supply so it can more readily accommodate rising demand.”
“Reform of planning, development, and approval processes at the state and local government levels could make an important contribution to improving housing affordability.”
However, Kirchner failed to mention another player that can affect housing affordability: architects. Can architects impact Australia's affordable housing crisis?
The Australian Institute of Architects’ Affordable Housing Policy cites a number of other factors that contribute to unaffordable housing, including “lack of innovation in the building industry; lack of acceptance of low cost housing in the community; and lack of diversity of house type.”
The policy also lists several ways that architects can contribute to housing affordability, including:
- Designing smaller, more flexible, and more energy efficient homes
- Designing more cost-effective and energy efficient mass-housing projects
- Working with developers and builders
- Developing more efficient construction techniques
- Embracing system building and prefabricated construction
Affordable housing strategies that embrace these approaches include cohousing, improved building techniques, tiny homes, and shipping containers.
Cohousing is a housing scheme, often called an intentional community, in which residents have certain private spaces along with shared spaces and other infrastructure. The movement grew in the 1970s, and the projects have often been associated with New Age and “back to the land” principles. Homeland Community, located in New South Wales and begun in 1977, is one such example.
Cohousing Australia describes cohousing as having the following features:
- Individual, private homes, space and ownership
- Community relationships and generous, multi-use common facilities
- A healthy balance between community and privacy
- Elements of self-management, trust and familiarity
- Stronger sense of neighbourhood
Strategies for saving money through cohousing often include decreasing the size of individual spaces in favour of shared spaces. High-cost rooms like kitchens and bathrooms can be downsized, simplified, or eliminated.
Common facilities can include rooms such as kitchens, dining areas, living areas, laundry facilities, and workshops, as well as infrastructure such as solar panels, solar water heaters, rain-water catchment systems, and outdoor living and gardening areas.
A report by the Cohousing Association of the United States notes that some projects cut construction and operational costs by sharing utilities such as boilers for heating and geothermal systems. The report also notes the technique of building “at scale,” or the number of units necessary to get lower prices on labor and materials. The Cohousing Australia database lists about 30 projects completed or underway.
Improved building techniques can yield high-performance homes at a cost comparable to standard buildings. Adam Cohen is an architect and builder in the US. His Passive House project for clients in humid Virginia won the GreenBuilder Home of the Year Award for 2013 in the Best Mainstream Green category. The project achieved Passive House certification yet cost about the same as a standard new home.
The home used a few upgraded components, such as windows imported from Europe, but most components were industry standard. The secret, he said, was his oversight of the entire process: design, energy modeling, construction, commissioning, and monitoring.
The Passive House standard, while effective, is not necessary in areas with low heating and cooling demands, but it stands to reason that a builder such as Cohen could bring increased efficiency to more standard housing projects, yielding even more cost-effective housing.
With Australians building, on average, the largest homes in the world, downsized housing options can improve affordability, as well. Tiny homes and shipping containers have been gaining attention over the past few years. Local codes and zoning have sometimes prevented people from living in these units in urban areas, but architects and builders have been innovating ways to create livable yet small spaces for $30,000 to 80,000 per unit.
Andrew Morrison, a professional builder and building consultant in Oregon, created a tiny home of 20 square metres with two lofts. The home cost just $33,000 and includes full-size kitchen appliances and abundant storage. This tiny home emphasizes the power of excellent design.
The increasing cost of housing has been accompanied by a decreasing size of many apartments, which has been followed by calls for revised apartment design standards.
The City of Melbourne issued a report last year stating that 40 per cent of new apartments totaled 50 square metres or less. Both New South Wales and Victoria have drafted design standards that create minimum sizes for apartments, as well as mandates for other amenities. The NSW rules require studio apartments to be at least 35 square metres in size, one-bedrooms to be at least 50 square metres, two-bedrooms to be 70 or more square metres, and three-bedrooms to total at least 95 square metres.