In the mobility industry, we know what it means when a city is affordable or unaffordable; or so we think. A challenging part of recruiting is overcoming the hurdles of recruiting an employee to a city that has been deemed unaffordable. More often than not, when a city is considered unaffordable, the housing costs are what is driving that reputation. However, affordability factors also take into account location, demographic changes, housing prices increasing quicker than incomes, and supply and demand of available housing. This article mentions a survey which found that 180 countries around the globe are considered unaffordable when applying the standard of average house prices being more than three-times the median income. The good news is that some countries are taking action to create more affordable living. Here’s what’s happening:
- China’s local governments have been granted limited authority to make land acquisitions of rural land for construction of new housing by introducing Tradable Land Quotas in Chengdu and Chongqing.
- Australia is using existing occupied land and buildings and implementing the Communities Plus Program. They are working on developing and renovating over 20,000 social housing units along with over 40,000 private homes in Sydney, New South Wales.
- Los Angeles, California is re-purposing vacant motels with the passing of a new law (Motel Conversion Ordinance) that allows motels to be converted into housing for the homeless, and doing so by bypassing any current zoning requirements.
- Germany and Denmark have individually pooled publicly owned assets into an Urban Wealth Fund to improve the housing supply in Hamburg and Copenhagen.
- The UK has taken an approach to increase the training of construction skills to attract young people to go into construction careers. London established the Mayor’s Construction Academy in hopes that it alleviates the shortages of construction skills and in turn, decreases construction costs for housing.
- Denver, Colorado is tackling the high costs of pollution and utilities by passing the Green Roof Initiative ordinance that requires tall buildings (buildings over 25,000 feet) to have green roofs or solar panels. This will lower the levels of air and water pollution and decrease energy bills over time.
- India has begun to use Glass Fibre Reinforced Gypsum (GFRG) panels to construct structures up to 10 stories high. These low-cost, pre-fabricated panels are made from gypsum waste from fertilizer plants and uses small amounts of concrete and steel (no bricks are needed). GFRG provides thermal resistance, keeping the need and costs lower for air conditioning. Fun fact: The United Nations Framework on Climate Change has recognized GFRG as a green material.
- Bulgaria has implemented a criteria for social housing where only applicants that do not own property and earn an income under their specified limit are qualified to live in the newly constructed social housing units in Dupnitsa.
- Another UK strategy consists of constructing homes on a former school site with multiple tenure options for ownership. These options include rent-to-buy or shared ownership, making the possibility of home ownership possible for buyers in Bristol.
- Australia has one more trick up their sleeve. The Melbourne Apartment Project is underway for several apartment homes to be sold at subsidized prices to social housing tenants through a deferred second mortgage program, which reduces the required deposit and repayments. They followed a similar model that Toronto, Ontario has been using over the last 20 years.
The landscape of our industry may change as the world advances and expands, so it’s important to pay attention to the strategies that countries around the world are using to combat the housing crises that we are all too used to facing by now. Over time, the hope is that housing is universally affordable, which will increase the desire to produce a universally global workforce.
Affordability is not just about the ability to buy or rent a home, but also about being able to afford to live in it. This definition of affordability goes beyond meeting expenses related to operations and maintenance, taking into consideration transport, infrastructure and services. If a home is economical enough to buy and maintain but located too far from work or school, it cannot be said to be affordable.