Source: Urban Housing Institute
Fortunately congested American cities have menu of options for expanding energy efficient housing availability, including transit improvements; legalizing denser construction wherever it is politically possible; improve code to accommodate green building solutions and legalize “micro-units or efficiency units” for urban dwellers, students, young singles and seniors.
According to a recent report by Mckinsey Global Institute , a blueprint of sorts for addressing the global housing challenge recommends four approaches to help solve the Affordability, Availability and Sustainability issues causing the current housing crisis.
1: Unlocking Land: (Availability)
First, it advocates unlocking land in the right locations. As the report notes, “Land cost often is the single biggest factor in improving the economics of affordable housing development. It is not uncommon for land costs to exceed 40 percent of total property prices, and in some large cities, land can be as much as 80 percent of property cost.” Smarter land policy also entails formalizing land registration systems and releasing public lands that are underused or not used efficiently.
2. Making Housing Construction More Efficient: (Sustainability)
Second, a modern, industrial approach to housing construction and delivery is needed to build housing quickly, efficiently, inexpensively, and in a scalable fashion. The report notes that in several affordable housing developments, such methods have helped slash costs by 30 percent and delivery times by up to 50 percent. While industry can take the lead here, the report notes that government “can play a key role in encouraging industrial construction through public procurement efforts, uniform building codes, and design standardization guidelines, which could encourage innovation in construction and building materials.”
3. Improved Operations and Maintenance: (Sustainability/Affordability)
Third, additional savings of 10 to 15 percent can come from improved maintenance and operation of housing, which together make up 20 to 30 percent of housing costs, depending upon the city. The two major ways to achieve such savings are by increasing energy efficiency (through better insulation, heating and cooling) and by pooling repair and maintenance services.
4. Improved Financing: (Affordability)
Finally, there is much to be gained by improving financing for housing low-income cities around the world. The report notes that housing faces a huge financing gap, for developers as well as individuals, and that this gap is greatest in the places with the most severe housing shortages. In too many places around the world, there is little in the way of housing finance, leaving low-income people and neighborhoods essentially “unbanked.” In these places, housing continues to be built informally.