Strategies for Affordable Housing

The problems associated with housing affordability really aren't all that complex. A bit of sound thinking, some political will and practical legislation would go a long way toward addressing the problem. What makes the problem so intractable in Australia are too many people (wealthy and powerful people) with vested interests in keeping things exactly as they are. That's why this current government refuses to acknowledge that housing affordability is a problem, despite a growing chorus of economists and welfare agencies warning of the long-term detrimental social and economic consequences. Despite the challenges of political inaction, there are things that individuals can do to make home ownership more achievable:

Alternative Use of Land
When government and wealthy developers hold all the cards and land is just too expensive for ordinary people to buy, some alternative thinking is required. The Affordable Housing Initiative has currently identified some locations, and is seeking other locations, where land owners are willing to share their land for the construction of small, modular, relocatable homes. This plan makes possible the construction of new communities and the creation of new affordable pathways to home ownership for people who are currently locked out of the housing market. Instead of buying land, individuals and families can build their own modest home on shared leased land and then look to acquire their own land as a secondary consideration after their house is paid off. Free of paying rent, they then have a valuable asset that can be bought, sold, rented out or relocated.

Alternative Building Methods and Materials
Among the many practical alternative building methods that exist, The Affordable Housing Initiative is currently working with industry partners to achieve greater savings in home construction, as well as faster building times. Every home-buyer's needs differ of course. Among the viable options we are also exploring the use of converted shipping containers, relocatable homes, tiny homes, kit homes, and a range of other self-build options. One of the more viable options is a modular system developed by a Victorian building company that offers some of the advantages of shipping container building (rigid steel, fully engineered, relocatable) without some of the disadvantages (restrictive dimensions, cost of modification, etc). We'll be sharing more about that in the weeks to come. (Please feel free to join our Facebook Group through the link below to be kept informed!)

Another aspect of alternative building relates to use of labour. The Affordable Housing Initiative is a strong advocate of self-build and group self-build projects. To overcome some of the obstacles and difficulties encountered by owner-builders we are exploring ways that home buyers can work alongside licensed builders to minimise the labour component of their building project. This also results in higher quality homes and full compliance with regulatory requirements. Group self-build projects enable people to assist each other in a collective effort and to form community along the way. By building off-grid structures that are not directly connected to the electricity or water main, the need for licensed tradesmen can be minimised.

One of the many ways to minimise the cost of any building project is to use reclaimed or recycled building materials. There are many community websites that offer free or secondhand items and by keeping a daily watch on these sites it is possible to snare bargains that can save hundreds, or even thousands of dollars. Many of these items are either new, or in 'as new' condition. Typical items that are available include structural timber, particle board, bricks, pavers, tiles, tools, plumbing (sinks, basins, toilets, baths), insulation, roofing iron, fencing, hot water systems, storage sheds and more.

Unconventional building materials and methods also often cost much less, but may require the input of additional labour, such as when making mud bricks, building in rammed earth or straw bales (carbon negative!). These often require extra labour, specialist skills and additional tools, but such alternative building methods can return substantial dividends throughout the life of the home by reduced energy consumption. Your local library will likely have an extensive array of titles covering various alternative building techniques.

Alternative Building Locations
Getting out and away from cities provides more affordable and flexible options for land use and more accommodating local councils that are likely to approve, or even welcome, your alternative building project. Of course you need to do your research and the advantages need to be weighed against other factors, such as distance, potential social isolation, availability of employment, cost of fuel and food and other factors. But it is one of the great tragedies of our time that recent Australian governments have not embraced a policy of decentralisation or provided adequate incentives for the relocation of businesses to comparatively poorer rural areas where there is currently higher unemployment. A policy of decentralisation, if properly implemented, could revitalise many small rural communities and relieve the growing pressure on urban infrastructure. These measures could also go some way to relieve some of the social stresses associated with crowded urban environments. I think it's high time to push for more action on this with our local members of parliament.

Alternative Investment and Finance
By giving preferential treatment to investors and financing overpriced houses, Australia's larger banks have effectively been complicit in, as well as the main beneficiaries of, inflated house prices. In 1985 the average mortgage was around $30,000. In 1990 the average mortgage was around $90,000. Today (2015) the average mortgage is around $300,000, which means that many Australian home-buyers are living in perpetual debt, which is of course the best outcome for any lending institution that has no sense of social responsibility and no regard for egalitarian values.
But there are other finance options around for those who want to explore them. Community banks and Co-Ops often operate on a less mercenary principles. And depending upon your circumstances, other options may also be open for you through loans from friends and relatives. From an investment perspective, there are compelling reasons to support low-cost affordable housing initiatives. (Read )

As much as we may feel that Australia's big banks have a lot to answer for, we can't blame them alone for the current housing affordability crisis. Australian home buyers themselves must face the fact that in many instances our nation's recent obsession with larger homes has meant that many people are burdened by excessive debt because they are living beyond their means. Which leads me to my next point:

Alternative Expectations
When you look at average Australian home sizes over the last 50 years, one thing is apparent: People have been wanting to build bigger and bigger homes. This may not be the main problem with housing affordability, but it is a factor. Scaling back the size of what we build is one way to immediately make our building project cheaper. That is not to say that owning a large home is not a reasonable aspiration. But by building modular homes in stages, as we can afford, this can achieve the goal incrementally without excessive debt.

The Tiny House Movement is a reactionary trend to the current climate of heavy debt and indicates that people are prepared to sacrifice or modify their aspirations in order to achieve a great level of financial freedom. For others, embracing such options may simply be a matter of basic survival. Whilst I don't believe that tiny houses are a viable long-term solution for families, it may be a very practical first step along the path to home ownership. There is a growing trend of people thinking 'outside the box' when it comes to housing. People are prepared to modify their expectations in all kinds of ways, whether that be in selling their home to be rid of an excessive mortgage, making a move away from the city, or embracing radical ideas, such as sharing houses. At the end of the day, people will do whatever they must do to survive and to pursue a better and more comfortable lifestyle.

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