Housing Affordability, More Innovation
The combination of a creative mindset and a hybrid mix of talents and qualifications are increasingly in high demand from governments searching for solutions to complex problems, businesses looking to expand and employers looking for the best talent, they’re are all vying for people who can dream big and deliver big with ideas to drive solutions and help innovation. Creative thinking fuels innovation, helps solve problems, it leads to new goods and services, creates jobs and delivers substantial economic rewards and social benefits, qualities that are all vital for a robust housing market.
Applying this thinking to the questions of how best to deliver all forms of affordable housing is a fascinating exercise. It’s an idea used by BBC Radio 4 when their show The Fix, took a group of 12 people to explore different options for affordable housing. The 12 individuals came from varied backgrounds which included graphic designers, sustainable developments, the law, educational specialists and artists.
Where to Start
The starting point for this creative exploration of the topic housing affordability, covered various topics. The disconnection between house price growth and wages was the base from which the discussion evolved.
House prices having gone up rapidly while wages have either flatlined or gone backwards, a reality in the UK and in Australia. Another problem was seen as the lack of security in the private housing market at a time when the available stock of social housing was in decline.
Another key factor was policy inertia, reflected in the fact that there have been many direct and indirect policy debates, government enquiries and think tanks which have all looked at the problem, but with few concrete policy changes.
Tax reform being one policy area that has been running in Australia for more than a decade, and both in the UK and here, stamp duty has been repeatedly signalled out for special mention as a market impediment, that most governments are not willing to address.
The group of 12, chosen because they were not steeped in housing, also pointed to a lack of understanding as to how people actually experience the problem of not being able to buy a house or access secure rental accommodation.
The disconnection between prices and wages was also linked to employment prospects and the hardships associated with mobility in the workforce and finance. These are all social issues that it is almost impossible to cost but they are very real factors.
It was also interesting to note that buying a home, building, renting and selling a home were all seen as important parts of the affordability question which has become an ever more urgent problem in Australia and the UK (and other countries) since the late 1970’s. Affordability is a complex and important issue with wide economic and social impacts.
Key Areas Nominated
Anyone in the industry will be aware of how complex the question of affordability is, and how it impacts so much of current housing policy. However, to further this particular exercise, the BBC group settled on several core issues.
These included land supply, planning regulations, what motivates home ownership – security versus investment potential and wealth creation, supply in relation to the shared-economy and the overriding fact that this was a multifaceted and difficult policy area.
Land supply was seen as a key area of concern dominated by a few very large developers. Land supply has also been in the headlines in Sydney recently.
Land developers then had to work within a very rigid and somewhat restrictive planning regime making it difficult for smaller players or individuals to enter the land market.
After some debate, the core issues distilled from the above points were focused on the regulation of the housing market, the better use of existing stock of all available buildings, not only houses and apartments, and lastly the shifting social aspirations of homeownership. With this latter point again pinpointing the idea of shared ownership, making the comparison with the fading appeal of car ownership in today’s era of services like Go-Get and Uber.
Ikea, Pre-fab Homes and Innovation
As the debate among the BBC panel continued several familiar themes emerged and there was an attempt made to highlight just one concrete, if hypothetical policy change.
‘Building to Live’ as opposed to a market dominated by investment potential was a point highlighted alongside the idea of an ‘Ikea’ or flat-pack approach to building.
This was aligned with more pre-fab housing and a need to review planning, how housing is financed and insurance.
Under occupancy of existing homes was also seen as an issue which was made worse by the negative impact of stamp duty as people moved into and through the market.
There was also a suggestion that some government intervention in the market may be required and that included foreign investment controls.
This intervention to create innovations could also favour the creation of enterprise and tax-free zones for housing as there is for industry. However, as not all housing markets are ‘over-heated’ and trends tend to run in cycles, the idea of government market intervention was a tough problem and cautioned against.
The end of the panel discussion was interesting, and could be summarised by the view that there was a greater need for innovation and fresh thinking to aid affordability. The type of innovation would need to be deep and widespread and cover supply, planning regulations, finance, tenancy security and direct government involvement in the housing market.
In previous posts, many of these same points have been discussed here. What the BBC program did highlight was that even with fresh thinking, the reality is that housing affordability does require a whole of government and a community wide level of engagement to bring about any meaningful change.
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