Many in the construction and development sectors are calling for greater investment in affordable housing as part of economic stimulus following the COVID-19 downturn. The South Australian Government has already put it on the agenda, with a recent call for Expressions of Interest for builders and developers to deliver 1000 new social and affordable dwellings.
But can it be done?
“Affordable” is more than just marketing-speak in the context of government-led programs. It refers to housing prices for sale or rent oscillating below the general market prices for the suburb. Affordable housing may also be offered only to those who can demonstrate they have a low household income. That includes people on government support as well as those employed on lower than average wages.
Low budget doesn’t have to mean low on design and construction quality. This year, community housing provider Brisbane Housing Company has won an Urban Design Institute of Australia (UDIA) Wingate national award in the affordable development category for the $4.1 million, 10-unit medium-rise Jingeri accessible housing complex in Brisbane.
Renewal SA found there are two crucial factors for delivering affordable homes—design and the construction approach, as described in The Apartment Construction Cost Demonstration research project in 2016.
Construction Partner for the project, Mossop Construction and Interiors, used an innovative delivery methodology. It incorporated modular elements, such as bathroom pods, the use of an insulated concrete form (ICF) product for the external and internal walls, and a pre-cast concrete floor cassette system for the floors.
The design team, led by Studio Nine, also contributed to cost reductions by including standardising bedroom, kitchen and bathroom sizes and layouts, placing wet areas around the building perimeter and co-location of services.
Reducing Costs by Increasing Innovation
Another company taking the design and construction innovation approach to the next level is HOW Strategy Group through HOW – Property Solutions and its special purpose entities HOW – Social Construct and HOW – Indigenous Solutions.
HOW – Property Solutions and HOW – Social Construct have delivered several successful market projects like the 46-apartment project in Abbottsford and the mixed-use project in Collingwood using prefabrication technology. They are currently working with Architect Anthony Nolan from Kennedy Associates on a design for affordable housing using the modular approach.
George Nori, Managing Director of HOW Strategy Group, and Matt Daly, Business Development for HOW – Social Construct, explained that their method offers a competitive alternative to standard approaches by “bringing the benefits of modular construction to the forefront of the building industry.”
They say that affordable housing “doesn’t differ too much from regular multi-res or volume build developments,” but it does depend on whether the objective is building for sale or rental.
How Do You Save on Costs?
“Unless the developer of affordable housing is a registered community housing provider, there are few ways to circumvent project costs,” Nori and Daly explain.
The “single biggest challenge” to tackle are land costs, particularly in the main centres. According to Nori and Daly, “The biggest opportunity is to work with local councils, state and federal government agencies to identify sites where partial or full land concessions can be made.”
Another method includes reducing car parking where possible. It is most applicable to multi-residential, as car parking can add “between $30K and $50k to the cost of a unit per car park.”
There are also options around individual dwelling design. Nori and Daly point out that reducing amenity, such as the removal of a second bathroom, could reduce cost by $20K–$30K.
“However, this also has the effect of reducing options for units in the longer term as they’re less desirable in the open market should they need to be divested.”
While some might be tempted to cut costs by choosing cheaper and lower quality materials and inclusions, Nori and Daly describe this as “often a false economy.” Low-quality fixtures and fittings need to be repaired, maintained and replaced more often.
They point out that affordability has two parts—the capital cost and the operational costs in terms of energy bills for heating, cooling and hot water, as well as maintenance costs.
“To make a home affordable, each aspect needs to be considered, and cost mitigation strategies developed.”
The company works with a technology known as Precision Modular Construction, otherwise known as pre-fabricated or offsite construction.
While this method is used globally and is growing rapidly in Asia, Europe and the USA, it is still very much in its infancy here in Australia,” Nori and Daly note.
Time Saved Equals Costs Reduced
The technology can have many benefits for the development and construction of high-density affordable housing. Reducing development time frames by between 40% and 60% is an important one.
“This significantly reduces both land holding costs and construction financing costs which can often be the factor which tips projects beyond viability.”
There are also cost benefits, for instance, having more “stable and predictable” costs which reduce development risk once the developer has committed to the project. Costs for standard construction can be volatile, as Nori and Daly point out.
“Construction costs may have dropped somewhat during the recent industry downturn but are now recovering as excess capacity in the sector dries up.”
More Control Over Build Quality
“Because units are built offsite under controlled conditions, it is possible to significantly improve build quality through more stringent quality assurance and compliance standards,” Nori and Daly said.
“We also use commercial grade fixtures and fittings as standard, offering durability and robustness. Our product comes with a 25-year structural warranty.”
Better Performance Than Code-Minimum
Fundamental to the HOW – Social Construct approach is ensuring low operational costs. The design guarantees high thermal performance and energy efficiency. As a minimum, the company works to attain a 7-star NatHERS rating.
To achieve high performance, their system looks to emulate the foundational concepts of the internationally recognised Passive House standard.
These include creating an air-tight envelope; enhanced insulation; improving internal air quality through the use of heat recovery mechanical ventilation systems; eliminating thermal highways (both structural and within joinery); and, designing to aspects of the site.
Their modular construction is based on the use of precision-engineered steel boxes, which create a sealed structural envelope and make it easier to ensure airtightness.
“Together with enhanced insulation and high performance, double-glazed, thermally broken window joinery, the home (is) efficient to heat and cool while air quality remains dry and fresh through the use of HRV mechanical ventilation systems.”
Another consideration for the team is how buildings will perform in a climate-changed future.
“Designing and building to achieve high levels of thermal comfort and performance from the outset avoids the need to expensively retrofit in the long term as our environment changes and avoids locking tenants into high energy bills.”