PRD released a report listing five alternative solutions to the housing supply crisis in Australia.

The report draws solutions from other countries, laid out in the context of the current challenges in Australia’s housing market that made it somewhat elusive for many to achieve homeownership.

PRD chief economist Dr Diaswati Mardiasmo said these solutions address undersupply, which is considered the root of the housing crisis.

“The good news is we are not alone in this issue – there are many other countries who have or are currently experiencing this,” she said.

Still, however, there is not just one perfect solution to the issues in housing supply, and the market will likely need a multi-faceted strategy.

“There are many housing supply solutions that we can draw upon from other countries, the challenge is implementing it within the Australian context,” Dr Mardiasmo said.

Here are the five alternative housing solutions laid out in the PRD report:

1.      Public Private Partnerships (PPP)

PPPs are agreements between a government body and a private partner, generally on a long-term basis.

With PPP, the private entities are able to develop fund services while utilising a public capital asset, such as government-owned land or building, to produce an end-product that is accessible to the public.

“A PPP as an alternative housing solution within the Australian context is feasible as it tackles the issue of financial risk, normally more of a government-focused issue, and red-tape reduction, normally more of a private entity issue,” the report said.

While this solution has the potential to ease the housing stress, it will require active participation by the Government from all levels to identify suitable sites in urban areas.

PPP Case Study: Social Housing Bundle in Ireland

This project, which was composed of three bundles, targets low-income residents in need of social housing, with the units suitable for assisted living, senior citizens, singles, and families.

The project is estimated to span more than 5,000 square metres, with construction cost reaching €120m.

The Social Housing Bundle was part of the Federal Government’s €300m social housing budget to build 1,500 housing units.

2.      Modular Homes

Modular Homes are all about transportability — they are prefabricated off-site and delivered to the location to be assembled.

They are also known as tiny houses, which can be customised to suit the occupants’ needs and budget.

“Although modular homes have been utilised as an alternative to the traditional home-build for some time across the world, its potential as an alternative housing solution is currently not being implemented at its highest and best use,” the report said.

For this to be viable, there is a need for joint ventures between multiple governments, manufacturers, contractors, and community organisations, potentially under a PPP.

Modular homes have lower construction costs, increased sustainability, and faster turnaround time, making them an appealing option since it still provides the benefits of a traditional home.

Modular Home Case Study: KODA Homes and HomeLife Pods

These two projects are perfect example of how modular homes can address supply issues.

In 2017, KODA Homes was implemented in the United Kingdom to help ease the supply crisis.

Meanwhile, HomeLife Pods are an Australian-made, affordable alternative housing option that is transportable.

3.      Build-to-rent

Build-to-rent (BTR) projects are large-scale housing model that consist of purpose-built rental homes managed by a sole owner, usually an institutional investor.

BTRs are believed to provide more stability and flexibility — they serve by offering housing at rental market value or at subsidised rates, thus allowing for multiple tenure types.

In the context of Australia, BTRs must have a segment accessible to lower income households based on localised data and not just a set percentage below the market offering.

“This will maximise its impact on reducing the affordable housing shortage. BTRs must also incorporate a larger portion to various household sizes to allow for resident longevity as they move through different life cycles,” the report said.

“This addresses rental housing security, which is crucial in the current undersupplied rental market.”

BTR Case Study: Cherry Park development in London

The Cherry Park development was established on the back of the partnership between QuadReal Property Group, Public Sector Pension Investment Board, and Unibail-Rodamco-Westfield.

Spanning 87,400 square metres in gross internal floor area, the project creates 1,200 new dwellings for families seeking affordable single-family homes.

4.      Asset repurposing

Asset repurposing involves changing the material use of existing assets to better suit the demand. The purpose, however, must remain relevant to the local demographic.

The impacts of the pandemic leaving many traditional office and retail buildings were left vacant provide opportunities for asset repurposing.

“Changes within the commercial property sector in the Australia market puts asset repurposing in a unique position of being a highly effective tool. Asset repurposing can also apply to public infrastructure assets that are no longer in use,” the report said.

Asset Repurposing Case Study:

Some examples of asset repurposing are Quayside Village in Canada, Savonnerie Haymans Public Housing in Brussels, Quinta Monroy Housing in Chile, and the Elderberry Walk estate in the UK.

  • Quayside Village is a medium rise building with wheelchair accessibility, with total of 19 units, including 5 subsidised units.
  • Savonnerie Haymans Public Housing is old soap factory repurposed into 100% public housing scheme, with 42 units of various sizes.
  • Quinta Monroy Housing is a 5,000 square metre of land repurposed into housing for the 100 families who had illegally occupied it before.
  • Elderberry Walk is an old primary school site of 11,965 square metre repurposed into 161 mixed tenure homes.

5.      Community-based land initiatives

Community-based land initiatives aims to provide affordable housing through the consolidated land assets owned by the Government and managed professionally for the betterment of the community.

“Due to the structure of community-based land initiatives, their suitability as an alternative housing supply solution is reliant on the participation of government at all levels.

“The key is to unlock land, but in close consultation with targeted stakeholders.”

Community-based land initiatives Case Study:

Urban Wealth Funds (UWF), Land Rent Schemes (LRS), and Community Land Trusts (CLT) are community-based initiatives.

  • UWF targets low-income individuals and families in need of affordable housing.
  • LRS provides access to government-leased land at subsides prices to build a house.
  • In CLT, housing is a community asset and land is acquired and held in the interest of the community.


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