Low quality homes and the housing crisis

Young family outside starter home in Levittown, USA, 1950.

If the objective of dealing with the housing crisis is simply to try get as many people into homes they can afford in the shortest amount of time, then “business as usual” will not get us there. The BAU approach is now mostly working for the upper end of the market and at significantly lower volumes than we’ve done in the past. So entangled has it become with building codes, regulations, housing taxes and planning ideology that our ability to produce affordable housing is now limited to just talking about it. Doing it is beyond us.

We need “un-usual” approaches. That could include allowing builders and developers to produce ‘low quality’ housing which sails beneath the plethora of green star energy, ESD, disabled access, trunk infrastructure and other standards which have piece by piece made entry level housing needlessly expensive. It also needs new approaches to the funding and design of infrastructure – from road standards to waste water.  Hence it isn’t being done. Instead, even so-called “affordable” housing is billed as “high quality” – with all the trimmings and a price tag to match. The entry level price for a new lowset 3 bed home – the cheapest housing we can now build (forget about apartments for affordability) – is now around $600,000 in many of the outer suburban housing estates.

The median household income in Queensland is now around $100,000. For new housing to be truly affordable for younger families (who may sit below the median income level) you ideally want to aim for product at no more than around 4 times incomes. That means somewhere between $300,000 and $400,000 for a young family that hasn’t yet reached median income levels.

Can this be done?

I believe it can, but it requires such a wholesale change of policy that I wonder if we have the resolve? Apart from the inevitable cacophony of voices from the regulators or industry professionals in design, planning and engineering who will argue that the standards they so vociferously protect are ‘essential’ (they’re not, besides try explaining that to someone living in a tent) – you will then have to wade through the screeching hypocrisy of the media, academic and political class who will decry lower standards for housing when at the same time pleading for more affordable options - all from the safety of their well appointed inner urban enclaves.

But it’s been done before. In post-war United States, tens of thousands of families sought to flee crowded, polluted, crime-ridden inner cities (all pre-gentrification of the urban environment) for a new life in suburbs, liberated by the motor car. Builder-developers Levitt & Sons developed new suburban estates with mass produced housing which was backed by the Federal Government and which offered low-quality (“basic’) housing of under 100m2 area with no garage or other features. It was massively popular with young families and massively derided by urbanists like Lewis Mumford who complained of  “…a multitude of uniform and unidentifiable houses, lined up inflexibly, at uniform distances, on uniform roads, in a treeless communal waste, inhabited by people of the same class, the same income, the same age group, witnessing the same television performances, eating the same tasteless prefabricated foods, from the same freezers, conforming in every respect to a common mold.” Mumford lived in a large home in a semi rural setting and his wife famously drove him everywhere. He was the 1946 equivalent of today’s privileged elitist. Not much has changed has it?

The lesson of the Levitts was that to deliver affordability, business as usual was not the solution. What was a radical approach at the time put tens of thousands of people into housing they could not otherwise afford.

The other lesson is that ‘starter homes’ are by definition just that. There’s no stopping the willingness or proclivity of homeowners wanting to add to and enhance their home over time. Garages were added. Extra rooms added, landscapes added and in time Levittown grew into a mature community as appealing as any other. Rather than build it all in at the start (with the price tag to match) it was added to over time, either through weekend endeavours or when budgets and incomes allowed.

In the midst of a housing crisis the extent of which we haven’t seen in more than a generation, why aren’t we doing something similar now? If we simply set aside the plethora of regulations, design codes and other instruments, how sharply priced could a new starter home really be?

This is unlikely to happen on a region wide basis: the voices of professional dissent would simply be too loud and would drown out the much quieter voices of young homebuyer families on a budget. But it could happen on a pilot project basis. Find me a site of 100 or 200 hectares just outside the urban footprint (so it hasn’t been already bid up due to artificially induced scarcity) and let me have a crack.

How might it look? First, you start scraping back cost layers. Only last year, the previous Queensland Government added $40,000 in costs via new Construction Code standards and a reported sweetheart deal with the Electrical Trades Union. You could start by winding that back. You could also replace upfront infrastructure taxes with a type of local area utility bond to finance essential (but not gold plated) civil infrastructure, repaid over time via the rates bill or similar instrument. There’s another $35,000 or so saved. Then there’s things like allowing large scale off-grid wastewater treatment rather than costly and sequenced connections to the grid. Big savings there. NBN? How about every home instead gets a Starlink deal? Way cheaper. Then there’s the actual dwelling design. No garages, lower ceiling heights, one toilet, basic kitchen. Designs that envisage future additions and renovations but leave this to people in their own good time. It’ll happen.