_Experts give their view on the best ways to improve affordability

Singapore property expert Debra Ma is Senior Development Manager at international  property and infrastructure group, Lendlease

 Affordable housing has to start at policy level. Singapore’s success in affordable housing stems from a strong public housing policy, anchored by political will and a long-term approach to planning. Since 1965, Lee Kuan Yew, Singapore’s first prime minister, promoted home ownership with the aim of giving every citizen a ‘stake’ in a country comprised mainly of immigrants.

The Housing and Development Board (HDB) was set up to chart the course to deliver a large number of quality affordable housing units. Today, there are 1.2 million HDB flats and over 80% of Singaporeans live in public housing. The high rate of home ownership is facilitated by a suite of financing options, subsidies and grants to support HDB flat purchase, especially for couples and lower-income households. 

Singapore’s success in affordable housing stems from a long term approach to planning

As land is scarce in Singapore, continuous urban renewal is integral to optimise real estate use. Singapore’s housing fabric is being transformed with the growth of household wealth and more residents upgrading to private property.

To ensure a stable and sustainable market, the Singapore government sets aside billions of the national budget on public housing. When private home prices rose appreciably over the past decade, the government implemented a series of cooling measures, one of which is the Additional Buyer’s Stamp Duty where foreign buyers and second-time local buyers must pay more stamp duties. These measures brought private home prices down by 12% in four years.

Alexander Boether is the head of sustainability and responsible investments Ziegert Group

Thorsten Schulte heads up the City Executive Berlin, part of the Big Urban Clients Program at Arcadis

Rising land prices are an inevitable by-product of urbanisation. But one effective way of bringing down the cost of housing is the use of ‘building information modelling’ (BIM) systems. This technology means that you combine ‘design and build’ within a single system, which allows developers to optimise project costs by up to 85%. 

When you combine this technological ability with modular building, the fact that we can create homes in factories and then ship to site has a significant impact on the ability to build affordable housing. 

Building homes from wood also brings down cost. It is a sustainable material that can be transported easily, which makes it the ideal material to support modular developments. Hybrid buildings, which use cement or steel for structural elements, combined with wood, are likely to become more and more commonplace. 

We are also seeing major changes to the way that commercial and residential property interact. We predict that we will see more of a blend in future; shopping centres or petrol stations that currently boast just two or three floors could evolve to have a portion of residential housing on top. 

Outside of these trends, the onus is on governments to prioritise affordable housing. Politics is the framework on which cities are built. The world could learn a lot from the likes of Vienna and Amsterdam, which have been very forward thinking.

Berlin: 30% of all new residential units built must be social housing

In Germany in the late 80s social housing became less important and in many cities, especially in the capital city, Berlin, big portfolios were brought to the private market. Through selling social apartments it was possible to reduce the budget deficit. However, the government is now trying to buy back social housing at high prices.

As a result, it is now mandated that 30% of all new residential units built must be social housing. But there have been notable successes; Germany’s rental price break, which was adopted by 313 cities back in 2015 and improved in 2018, ensures that people on the lowest incomes are not stung by rental price increases.

Judith Salomon is head of strategic planning for The Berkeley Group

The fundamental issue with housing affordability is that we do not deliver enough homes and have not done so for decades. This is the result of insufficient land for housing and a slow and costly planning system which delays development and acts as a barrier to entry for new players.

More land is needed for housing, including greater and faster release of public land and a more balanced approach to the Green Belt. Between a quarter and a third of potential residential land is controlled by the public sector. This could make a real impact on the delivery of new homes, including affordable homes. Despite successive government initiatives, public sector land release remains low and slow. Tender processes are lengthy and extremely expensive, which excludes many developers from being able to bid.

England’s Green Belt has more than doubled since 1979; at 13% of the country it is larger than the urban area. Not all Green Belt land is of high quality and much provides little public benefit. 42% of non-environmentally protected Green Belt land in London is within 2km of a station. A more balanced approach would allow the release of poor quality, accessible Green Belt land.

UK: The fundamental issue with housing affordability is that we do not deliver enough homes and have not done so for decades

In return local authorities should demand exceptional development standards with very high quality, sustainable places supported by community amenities and facilities, affordable housing and generous public open space. This would make the best use of poor quality, accessible land, resulting in better community and development outcomes and delivering much needed new homes.

Twenty years of planning reform, six planning acts and two editions of the NPPF have led to a complex, costly and slow planning system. Elements of the planning system could be refined but fundamentally the planning system is the same everywhere but the experience varies markedly. Rather than further system change, let’s focus on the culture of planning, making it about enabling rather than regulating.

Nnenna Lynch is founder & CEO of Xylem LLC, formerly a senior advisor to New York City Mayor Michael Bloomberg during his tenure

When people talk about solving the affordable housing crisis, the focus tends to be on producing more stock. Preservation, however, is just as critical. In the US, this has proven to be a cost-effective way to help ensure a reliable supply of affordable homes.

It is cheaper to invest in the repair of older buildings than to build new. However, whether you’re preserving or building new affordable housing, the single biggest issue is financing. If sources of capital could be expanded and harnessed more efficiently, it would go a long way to making a dent in the crisis. 

Another interesting area of potential innovation is to rethink housing typologies. To date, efforts in this area have been focused on market rate projects targeting  young people – such as micro-units or group-living situations.

I would like to see similar principles applied to family housing. Anything that brings down costs or allows you to build more units for the same amount of money is an important avenue to explore. 

I am excited to see the burgeoning field of new technology companies dedicated to real estate and am hopeful that they will have an impact on affordable housing. Proptech start-ups such as Travtus are now using artificial intelligence to streamline property management, which could have a massive impact on cost.

The more you can reduce upfront and operating cost, the easier it is to build affordable projects. There are also interesting developments happening in the energy sector that could benefit the affordable housing market. New York-based Blueprint Power is turning buildings into power sources, creating sustainable homes that also sell energy back to the grid.

At the end of the day, there’s no magic bullet. It’s going to take a variety of creative approaches across the spectrum of disciplines that effect housing – finance, design, policy, construction, management, etc – to help alleviate the crisis.

The Knight Frank Affordable Housing team works on behalf of developers, Local Authorities, Registered Providers and private landowners in all aspects of Affordable Housing.