Affordability a critical issue for VIVA

One of the core tenets of The Viva! Project is affordability.

With housing availability and house prices reaching crisis point, especially in Christchurch, there is a need for systemic changes in the way we build and renew our housing stock.

PROVIDING AFFORDABLE HOUSING:
SOME ISSUES AND ALTERNATIVE APPROACHES

1.     CONSTRUCTION COST REDUCTIONS

1.1  Minimising the size of units.  Shared community/commercial laundry, visitor accommodation (i.e. shared “spare bedroom”); garden shed, workshop; optional leasable storage, car-parking and maybe freezer storage.

1.2  Units are single level with “only” one bathroom and one toilet (separate)

1.3  Lower cost foundation systems

1.4  Modular

1.5  Prefabricated (factory-produced and assembled on-site by workers with only basic training and skills)

1.6  Low-cost manufacturer

1.7  Sweat-equity

1.8  Units finished to varying levels (à la Toronto’s Grow Homes: core living areas finished – or not.  Other rooms could be just the unlined shell.)  Purchasers finish and fit-out to their standard using their own resources and to their own timetable (i.e. another opportunity for more “sweat equity”, in the case of private buyers)

1.9  Functional rather than fashion hardware, whiteware, furnishings and finishings

1.10  Building materials “alternatively” sourced (i.e. not from NZ monopolistic Fletchers Group)

 

2.     DEVELOPMENT COST REDUCTIONS

2.1  Co-operative multi-owner-managed development (no “developer” margin/profit)

2.1  Employ draughts-people not architects

2.2  As many buyers as possible purchase pre-build, off the plans (including retail/commercial premises, and especially to Social Housing providers: CCC, Housing NZ, Latimer Community Housing Association, Anglican Care, etc. [MBIE Social Housing Fund provides capital in advance of construction]).  e.g. community-compatible ‘religious’ organization pre-purchases residential units and the community meeting house.

2.3  Stage the project

2.4  Negotiate reduced Development Contribution, based on low demand placed on civic infrastructure and on provision of on-site green and recreational space and community services.  Negotiate for payment to be delayed and spread over time.

Non-replicable strategies specifically for first and/or CCC-supported development:

2.5  Negotiating a discount on land price. Payment for land to be at conclusion of development and then as homes are sold.

2.6  Gaining sponsorships from technology suppliers (leading edge publicity; live on-line monitoring of performance)

2.7  Supply of e-cars and charging stations by retail electricity supplier (as for Auckland/Wellington apartment block by Bosco Connect www.bosco.co.nz )

 

3.     IMPROVING FINANCIAL ACCESSIBILITY – PURCHASE

3.1  Long-term lease of the land, rather than owning it (Owned by a Charitable Trust or CCC or by some of wealthier owner-occupiers or by investors)

3.2  Dwellings available to rent (Initially the market will be stronger for rental, until more people realize the desirability of the lifestyle and the investment value of units in the development) (Owned by social housing provider[s] or options as for land)

3.3  Mortgagors, recognizing that reduced costs of operation and maintenance enables borrowers to more comfortably service mortgages, agree to higher loan limits and other favourable treatment (e.g. KiwiBank – already providing subsidies for energy saving installations)

3.4  Rent-to-buy

3.5  NZ Housing Foundation (http://www.nzhf.org) or similar investor equity stake, possibly 30%.

3.6  NZ Housing Foundation or similar “Affordable Rental” scheme.

3.7  Cross-subsidies (development margin is higher on larger, more expensive dwellings/apartments to allow for a lower margin on smaller, low cost ones).

4.     IMPROVING FINANCIAL ACCESSIBILITY – HOLDING COSTS

4.1  Reduced costs of operation and maintenance (especially energy costs, use of active and public transport and avoidance/reduction of vehicle costs, and on-site food production.  CCC provides adjacent bus stop shelter.  Also contributions / support from Social Housing providers for running facilities and maintaining common areas.  Where use of a car is necessary, shared-car arrangements are the least expensive; a commercial scheme is www.cityhop.co.nz)

4.2  Minimizing financial costs (interest) by establishing a JAK-type fund 1

4.3  Village Community Association supports residents to use timebanking (www.lyttelton.net.nz/timebank) and local exchange and trading systems (LETS http://en.wikipedia.org/wiki/Local_exchange_trading_system e.g. PegX www.pegx.co.nz) to reduce expenditure of scarce dollars.

 

1    JAK cooperative bank, Sweden (www.jak.se ), NZ$230M under management, operates on borrower/lender reciprocity, without charging or paying interest, thus massively reducing the cost of finance over the lifetime of a loan.

     Sustainable Urban Village (SUV) supporters with cash invest in the fund.  Individual borrowers and the SUV Development Company repay the debt/”obligation” over time, and the simultaneously banked matching savings, operating cash and maintenance/development reserves contribute to borrowings by the original depositors or their beneficiaries and by further SUV developments, etc.