Skip to main content

How to make housing affordable

I often mention the expense of our homes. Whether it's renting or a buying, it's a major cost in our lives.

Here in Australia it's widely accepted that prices are too high. Compared to four decades ago, we earn ten times more - but house prices are 30 times more expensive. So what do we do about it?

This Australian documentary looks internationally to see what solutions other countries are coming up with.


Solutions involve town planning and financial arrangements, and a lot of ideas involved living in a smaller space.

While a lot of solutions take a long time to implement, one of the quickest is a change we can make ourselves. More about that at the end.

First here are some of the ideas from the documentary:

Just keep building

In Tokyo each year there are more new homes built than in all of England. Commercial areas have been more flexibly re-zoned to allow enough new homes to match the need. As a result, prices don't increase alarmingly as they do elsewhere. More stable prices also mean that young people aren't pressured into buying in a hurry.

Being a shareholder

Denmark also has a concept called "Andelsbolig". For a low price people can be a building shareholder, giving them the right to rent a unit. Only building owners can live there and the price is capped to inflation. These two rules deter speculative investors and keep prices affordable for the residents.

A Co-op City

'Co-op City' is in New York's Bronx and was designed decades ago to stop middle class people being priced out of New York City. The development has more than 15,000 apartments, up to 50,000 people and a 5-year waiting list to get in.

In this government-backed development residents pay $30,000 to buy and then pay $1400 per month to live there. It sounds a bit like a mortgage except it costs about half of what it costs to live elsewhere, and there is no profit to be made. You sell it for what you bought it for.

Again, this makes it ideal for residents rather than investors.

Buy half a home

In London, shared ownership allows a person to buy, for example, 60% of the home and rent the remaining 40% from the housing association. As house prices increase, their 60% becomes more valuable and they can borrow more to buy the remaining stake in the home.

It allows first-home buyers to benefit from rising housing prices rather than getting priced out by them.

Living in a boat

Also in London, the number of people living in canal boats has doubled in the last five years. It's more a symptom of the problem than a solution but some people are finding that the cost of a very small boat much more affordable than a traditional home.

20% less for 20% less

'Pocket homes' are being made by one developer. These are quite literally what they sound like. They're smaller than a normal apartment but are also more affordable. It's not as profitable for the developer, which is probably why it isn't done more often.

Shipping containers

In Copenhagen, excess shipping containers are being converted into tiny apartments and put on land not yet zoned for development. It's temporary but ideal for students who struggle with housing costs.

Kim Loudrrup has started building floating pontoons with 12 shipping container units on each one.


They are moored in the city and each one has a "sea view" and costs only $600 per month.

Live above a car space

These two-storey 'zedpods' sit neatly over a car park. It's a great way to use the space taken up by car parks, which is unused most of the time.


The easiest change to make

Changing the housing of city can be hard. It can be far easier to change our mindset. Esben from Denmark has been exploring how cities can work in a sustainable and affordable way. "Is it not just about how much it costs but also how we live?"

He says that if we have lots of options outside our home, it is easier to live in a smaller space. We don't need lots of rooms, or a garden or a pool if we can access things things and meet our needs in a shared space.

For example, I live in an apartment with no yard or garden. But just around the corner is an enormous park with trees, a pond, a playground, barbeque areas, picnic tables and an outdoor gym.

How to save $8000 a year on housing

The documentary also mentioned that even where this is working, it takes a lot of time for all these things to happen. Definitely the quickest way to have affordable housing is to decrease the size of the house we need. I did the maths, and it's amazing how much of a difference this can make.

Comments

Popular posts from this blog

How much super will we have?

Will we be OK in old age? How much will we have? One of the great things about living in Australia is superannuation. Our employers are required to pay into an investment account for our retirement. In recent times, my wife and I have been in several conversations with friends who are wondering (or worried) if their balance will be enough. That's what inspired this article. Great question It's a great question to ask, especially around the age of 35 to 40. At that point, old age is less of a distant abstract concept. It's becoming a medium-term reality. At 35 the number of years of living off super is possibly more than half of your remaining years. At 40 you may consider yourself about half way through your working life. Looking at your balance, it's easy to think that twice that balance may not be enough.  Read on, because I have good news for you. It's better than you might think As I've mentioned in earlier posts, compound growth means the investment grows f

What is clutter anyway?

Today we're doing some cleaning up of the apartment, so this quote about clutter is quite pertinent. Clutter is the physical manifestation of unmade decisions fuelled by procrastination. Even as I look around the desk where I type this I can see examples of that. Perhaps that's why it feels good once we do get around to clearing the clutter. At tidy home (or office) with less mess is appealing - but perhaps it's mental as well as visual. The satisfaction of completing the things we want to do is such a good feeling. So much better than staring at physical reminders of half-finished (or not yet started) actions.

Will robots take your job?

The future could be very different. It's one reason I started this blog. What will technology mean for jobs? For incomes? For society? So I was excited to find Will Robots Take Your Job? at my local library. What does the book say? There's always been technological change and we've always found jobs. As the more laborious jobs were taken by machines, we took on higher skilled jobs, moving further up the "skill ladder". The main question is whether this time is different. Will the "skill ladder" continue to have higher rungs for humans to move on to? Will these rungs appear as quickly as the current rungs disappear? Either way we're headed for significant disruption. Either large-scale re-training of our workforce or massive unemployment. The author despairs that our leaders seem not to talk about this - and worse still, not have a plan for it. Farmers or horses? In 1870 about 75% of Americans worked in agriculture and used 25 million hors