Has Housing Reached a New Tipping Point?

Has Housing Reached a New Tipping Point?

20/09/2017

barrysays

An insufficient supply of affordable housing seems to have become a common crisis worldwide. At this moment of massive human change, can new approaches to supply and demand bring new ways to solve an age-old problem?

Even those not familiar with Abraham Maslow and his 1943 paper "A Theory of Human Motivation" will still be able to inform us of their basic needs. Shelter is one of those basic human needs, along with breathing, eating and sleeping. And yet the developed world is undergoing a housing crisis once more, featuring homelessness, repossession and unaffordable costs to large sectors of societies that are struggling to come to terms with a sense of their own values. But are things about to change?

A HISTORY LESSON

Saltaire Housing (image: down by the dougie)

Port Sunlight Housing (image: down by the dougie)

It was at the end of the second great period of industrial revolution and mass urbanisation from the end of the 19th century onwards, that the idea that the state might provide people with secure and dependable places to live had steadily gained ground. Initially in the UK, philanthropists had started to provide housing in city tenement blocks, whilst some factory owners built entire villages for their workers, such as Saltaire in 1853 and Port Sunlight in 1888. The origins of French social housing also lie in the private sector, with the first state aid provided to limited profit companies by the “Loi Siegfried” in 1894. In the US, early tenement reform was also primarily a philanthropic venture, with model tenements built as early as the 1870s which attempted to use new architectural and management models to address the physical and social problems of the slums.

Postwar prefab. (image: Getty)

The origin of state provisioned social housing however lies with the UK and its “Housing of the Working Classes Act” of 1890, which resulted in the first council estate, “Boundary Street”, built three years later on the border of Shoreditch and Bethnal Green in east London. By 1919 local authorities were required by law to provide council housing and after the second world war, government was building such dwellings in huge numbers in order to replace homes destroyed in the war, peaking in 1953 at 220,000.

Salford slum clearance in the 1960s (image: shirley.baker)

The emphasis shifted at the end of the decade towards slum clearance, as millions were uprooted from cramped, rundown inner-city terraces and re-housed in purpose-built new towns or high-rise blocks. A whole generation was introduced to the new pleasures of indoor toilets, front and rear gardens or landscaped housing estates.

Heygate Estate IN Southwark, South London comprised 1214 homes constructed in 1974 as home to more than 3,000 people. The estate was demolished between 2011 and 2014 as part of the urban regeneration of the Elephant and Castle area. (image: bradley)

In France, the post-war governments had launched major construction initiatives, including the creation of new towns "villes nouvelles" and new city suburbs including low rent housing known as “Habitation à Loyer Modéré” or “HLM”. This housing is now generally referred to as 'l'habitat social' to include a slightly wider remit than just housing. The state acquired land and then advantageously funded companies to build its huge housing complexes.

In Britain, things started to go wrong in the late 1960s when cheap, poorly built and designed tower blocks started to be put up. Not only was the build quality lost, but more importantly the day-to-day management was far from a priority. The 'tower in the park' style of the influential Architect Le Corbusier, featuring concrete walkways and "streets in the sky" that had once seemed so pristine and futuristic, were becoming grim havens of decay and lawlessness, not just in Britain but also Europe and the USA. Whilst they succeeded in giving lower-income families a place to live in the drive to provide popular housing, this system also led to the creation of suburban ghettos, with the distinct problem of neglect and disrepair.

"an oasis in the desert" Pruittigoe St.Louis , completed in 1955, consisted of 33, 11-story apartment buildings. bY the end of the 1960s, Pruittgoe was nearly abandoned and had deteriorated into a decaying, dangerous, crime-infested neighborhood. It was demolished in 1972. (USGeological.Survey)

Urban renewal had become a way to eliminate blight but was not in fact a solution for constructing new housing. For instance, in the ten years after the US Housing Act of 1949 was passed, 425,000 units of housing were erased under its directives, yet only 125,000 units were constructed. Entire communities in poorer, urban neighbourhoods were demolished to make way for modern developments.

Activist and author Jane Jacobs would famously describe the new housing as, "Low-income projects that become worse centres of delinquency, vandalism, and general social hopelessness than the slums they were supposed to replace. Middle-income housing projects which are truly marvels of dullness and regimentation, sealed against any buoyancy or vitality of city life. Luxury housing projects that mitigate their inanity, or try to, with vapid vulgarity...This is not the rebuilding of cities. This is the sacking of cities."

WHAT'S HAPPENING TODAY?

In 1979, 42% of Britons lived in council homes. Today that figure is just under 8%. Things began to change when the government of Margaret Thatcher introduced “right to buy”, allowing state owned housing to be sold to tenants with the idea that councils should use the funds to pay down their debts rather than build new houses. The mission was not to ensure affordable rents for working people but to help them to get a foot on the property ownership ladder and it saw 1.6m council homes sold between 1979 and 2013. The numbers of new council homes that were built plummeted and council housing went from being a cornerstone of national social development to that of a marginalised and stigmatised consideration during an unprecedented boom in house prices, fuelled by cheap credit and the now shortage of affordable rented accommodation.

In the US rents have been rising for more than a decade, as have the numbers of renters. According to analysis by the Urban Institute, there are only 28 affordable units for every 100 renting households with lower incomes. Between 2001 and 2013, the U.S. housing market saw the disappearance of 2.4 million affordable units, both subsidised and market-rate, for the lower half of income earners. The loss is seen as most severe in primary housing markets such as New York City, but is also apparent across the country where neglect and deterioration also impact affordability.

Image: SDGs

One of the “Targets” of The United Nations Sustainable Development Goals is to, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums by 2030. However as politicians the world over try to draw in the growing middle classes, housing policies are shifting and the benchmark for affordability is continually being raised. Meeting poorer people’s housing needs is requiring larger and larger subsidies, at a time when most countries are in actual fact cutting back on public spending, or even pulling out of state subsidised housing altogether.

Image: SDGs

If this is happening in rich countries such as Britain and the US, it is even more likely in poorer countries with tighter budgets and limited tax bases. People are stuck in inadequate homes or pay so much of their incomes for housing that they are forced to forego other necessities.

Lack of access to decent affordable housing has become an issue of both rich and poor economies. Even in developed markets, low-income families in inadequate housing have higher levels of unemployment and their children are more likely to do poorly in school and quit sooner than other students. High housing costs squeeze middle-income families, and in the costliest cities, even households earning far more than the median income can be financially stretched by rent or mortgage payments, limiting the growth of the local economy.

DOES EVERYONE NEED TO OWN A HOUSE?

Men sharing "cage homes" in a private apartment in Hong Kong. The rising property prices have made decent living conditions unaffordable for many Hong Kong residents.(image: IC)

Public Rental Housing at Tin Shui Wai -Hong Kong. (image: BWPI)

Not everyone can own property and not everyone wants to own property. Germany for instance has some of the lowest property ownership levels in the developed world, where about half of the population are living in rental accommodation, a level comparable with Hong Kong. The difference for Germany is that it is mostly by choice that people do not purchase, where arguably, the tenant is "king" enjoying greater rights and afforded stronger protection from landlords. There exists the freedom to decorate properties in which tenants live (although they have to repaint walls to "neutral colours" before leaving) and so those who rent tend to treat the property as a real home, doing far more of the maintenance themselves than a tenant would be allowed in Hong Kong for example. On average, a tenant spends three to seven years in one property, much longer than in other countries.

Mixed income housing at East Village Austin Texas. (image: Bercy Chen Studio)

The negative equity that follows property booms has reinforced Germans in their suspicion of rising house prices. They do not sit around a meal table discussing how much their home had risen in value over the past months. According to the Paris-based Organisation for Economic Co-operation and Development, house prices increased by an average of 83% between 1970 and 2008 in OECD countries. In Germany, they fell 17%. It’s also difficult to get mortgages, you need a large deposit and this is combined with a strong cultural reluctance towards risk and borrowing.

By contrast for Chinese, it seems that owning a home is one of the most important life aspirations. It represents security in a fragile existence and for young men there even exists the cultural pressure of needing to secure a property prior to taking a wife. Lack of affordable first homes is causing stress in the younger population and potentially sees couples marrying later in life, becoming older parents, or perhaps not even marrying at all. More recently with spiralling prices, purchasing property as a financial investment has appeared essential to younger generations who otherwise see their peers with money getting even richer through property speculation.

Image: PAHRC

It is clear that all of China’s big cities are becoming increasingly expensive for their citizens, especially in terms of property ownership. According to Numbeo, as of June 2017 the price to income ratio in Shenzhen is the world’s highest, at a whopping 39.8 years as well as a national average 27.43 making it the world’s most unaffordable market. To put that into context, the USA continues to prop up the world ladder at the bottom of the list with a national average of just 3.12 years. Rental yields in the US are some of the world’s best whereas the rental market in China is still some way behind rising house prices, making buy to rent unattractive for house owners and so leaving newly purchased property deliberately empty, sometimes for years.

SHOULD HOUSING BE ALLOWED TO BE A SPECULATIVE COMMODITY?

Ferry Lane Council Estate, Haringey (image: iridiscenti)

The German situation, where landlords have limited powers and lending is heavily restricted, provides a clear illustration of factors that do exist to make housing less attractive as a speculative investment tool. In France, after war damage had reduced the number of houses in many cities, rental prices dramatically rose, and the government made a law in 1948 to restrict rentals, effectively ending the economic benefits of housing investment and helping to balance landlord and tenant relations. In Singapore over 80% of the population live in government developed public housing estates where the Housing and Development Board (HDB) is hugely backed by state funding. China’s property bubble of the last decade has finally been stabilised in the leading cities through strong government intervention on ownership registration and lending, effectively reining in speculation and mass ownership by the wealthiest sector of society.

Laissez faire economics in the housing markets only leads in one direction, a further concentration of assets at the expense of those without. As a ‘basic human need’ governments have a fundamental responsibility to ensure that housing is not treated as a luxury good and is both available and affordable.

A diamond has value due only to its rarity of supply; however, its demand has to be manufactured though marketing, having little intrinsic value in itself. Nobody actually needs a diamond; It is a luxury, it can be bought and sold at whim without impact to peoples very existence. But shelter is different. It is too important to be treated like a commodity, to be traded around, indifferent to the plight of those without it. There are plenty of ways for human individuals to get rich without it being based on constraining the basic needs of food, water or shelter and governments should focus on this welfare issue above all other factors.

AltErlaa (image: HarryGlueckArchitect)

The lack of affordable housing has high costs in health, environmental degradation, transportation, and homelessness. Strong, mixed-income, diverse communities are stable, healthy, and economically viable, and they support a variety of stores, services, and entertainment that make cities vibrant and interesting. Teachers, police, and health workers should be able to live in the communities in which they work. Without more affordability in housing supply they cannot. Is it reasonable that people go homeless even when adequate nearby accommodation remains empty?

As the global population escalates and space becomes ever more precious, it is unacceptable for property to be hoarded, controlled and traded for the further benefit of those least in need. Civic unrest and social disruption repeatedly result from such desperate situations and governments must take a strong hand in strengthening the supply side of housing provision in the public sector whilst balancing the demand side against commodity speculation. They must see affordable housing provision for all as a community investment rather than a burden.

A TIPPING POINT 

Excalibur Estate. Britain's last surviving prefab estate at Catford, South London built in a day by teams of German and Italian prisoners-of-war in 1946. Designed to last only ten years,For more than 150,000 homeless, bombed-out families across Britain, these two-bedroom prefabs with the then astonishing luxury of a garden, a bathroom and a separate indoor toilet were meant to be a merely temporary solution at the end of the war. (image: dailymail)

Excalibur Estate (image: dailymail)

The developed world seems to have come full circle in the last hundred years and we are back where we started, with the capital and the land back in the hands of the few. Today’s youth, even of the educated and professional classes are growing up with diminished hope of ever owning their own property, but more than that they are increasingly unable to afford to rent suitable accommodation in the places they need to live and work. If we are going to meet the UN development goals then a significant shift in the attitudes towards housing needs to take place.

The philanthropists of the 19th century saw creating social housing as the greatest means to improving the lives of others whilst satisfying their own needs through giving, whilst the greatest thinkers and academics put their energies into creating new towns, housing types and fairer social systems. It may just be that we need to be doing the same today and starting out on completely new ways to think about equity and housing.

A renaissance in prefabricated housing, “Prefab” seems likely. The post war housing shortage in UK was dealt with using ‘temporary manufactured housing’ based on American principles of prefabricated construction.

‘Prefab’ is a broad term that encompasses several different types of prefabricated building. Technically, any building that has sections of the structure built in a factory and then assembled on site can fall under the ‘prefab’ designation including both ‘modular’ and ‘panel’ built as well as fully ‘manufactured’ construction.

461 Dean (image: shop.architects)

‘Modular’ construction is formed from separate box-like modules which are then secured together to form a whole whereas ‘panel’ building is accomplished by laying down the floor and then lowering each section of wall in to place one at a time. ‘Manufactured’ construction is completely assembled off site and transported into place intact.

Considered to be the world's tallest ‘modular’ tower, ‘461 Dean’ has recently been completed in central Brooklyn, New York and standing at 32 stories is billed as a new solution to meet the high demand for urban housing. Its 930 steel modules were fabricated off-site at a factory in the nearby Brooklyn Navy Yard and shipped to the site by truck. Half of the apartments have been set aside for low- and middle-income residents.

"Lincoln" house unit at Mount Hood Tiny House Village, Oregon. (image: tinyhousevillage)

Image: tinyhomes

Recent technological advances in construction quality, coupled with a new ability and willingness to live more “spartan” lifestyles in micro houses is also seeing a comeback of ‘manufactured housing” including mobile homes. Fully constructed off site and moved into place on wheels, these are acting as a source of affordable housing not just for rural communities but also in terms of utilising private urban land such as garden space and are becoming popular with first time residents wanting to find a home. No land ownership is required for them and building codes don’t apply, whilst their standardised manufacture means costs are minimised. New hybrid homeownership and land rental models are arising allowing through ‘resident owned communities’ with flexibility for owners to share management and control of parking, managing infrastructure, operations, and common areas. Members may own their homes and rent empty spaces to generate revenue that covers debt service and operating expenses.

230-square-foot Modern Tiny Smart Home, complete with high-tech features including lights, locks, and window tinting all controlled by a mobile phone app. (image: tinyliving.com)

Meanwhile as trends rapidly and necessarily move towards smaller living spaces, we might see typical suburban style family houses become unsuited to the new demographic, with the need for more dense individual apartment living resulting in a large amount of stranded assets in the housing market. The sharing economy has already starting to create new ways of thinking about many basics of life, including ownership, transport and accommodation. The airb&b phenomenon shows new ways of thinking about utilising housing resources.

New platforms, with shared or fractional ownership and usage rights are likely to develop in the coming years. Platform cooperatives, which share the value they create with the users they depend on, are on the rise. We can hope and possibly expect such platforms to heavily influence the supply of housing in the next few years, making ownership as we know it a thing of the past.

Barry Wilson is a Landscape Architect, urbanist and university lecturer. His practice, Barry Wilson Project Initiatives, has been tackling urbanisation issues in Hong Kong and China for over 20 years. (www.initiatives.com.hk).

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The first successful construction of a fully modular home system did not materialize until 1933, with the Winslow Ames House by Robert W. McLaughlin and his company, American House, Inc. This innovative house was built with the help of a new exterior finishing material called Cemesto, a panel board made partly of sugarcane, patented by the John B. Pierce Foundation. The Winslow Ames House consisted of several room modules serviced by a service core to which all bathroom, kitchen, plumbing, and heating systems were attached. (image: CC-BY-SA 4.0)

Container City II by Cmglee. New types of housing have arisen for those desperately looking for low rents: container houses and modular micro-apartments. Container housing, a creative reuse approach in which excess or discarded shipping containers are transformed into small homes, hit the mainstream consciousness in 2000, when the firm Urban Space Management completed the Container City I project in the Trinity Buoy Wharf area of London. (image: CC-BY-SA 3.0)

1972 Nagakin Capsule Tower, by Kisha Kurokawa consists of 140 self-contained prefabricated capsules, complete with bathrooms, cabinetry, and a built-in HiFi set. The tiny capsules, designed to be removable and replaceable, only measure 7.5 x 6.9 x 12 feet a predecessor to today increasingly popular micro-apartments. (image: CC-BY-SA 3.0)

130 Square-Foot Micro Apartment in Paris by homestilo (image: CC-BY-2.0)