AFFORDABILITY IS A COMPLEX ISSUE AND WE NEED TO MAKE SURE WE HAVE THE LANGUAGE RIGHT BEFORE WE DISCUSS SOLUTIONS
Housing affordability is being raised once again as an issue as the supply of developer lots available for sale has plummeted over the last six months and prices are rising on the existing market. Discussion about affordability will include conversations about density, cost of living and infill, but many people use these terms incorrectly. Below is a quick summary of what they actually mean.
Infill is not the same as density: Whist the terms infill and density are often used interchangeably they are not the same thing. Infill means development within the urban front. Density relates to the number of dwellings per hectare. Due to the higher cost of land in the inner and middle ring suburbs, density does tend to increase through market forces the closer you get to the CBD. Medium and even high density outcomes are not exclusive to those areas however as density is now common in masterplanned developments such as Brighton, Ellenbrook and Wellard to deliver affordable housing options.
Affordable purchase price vs affordable living: The term “affordability” is usually used in relation to the purchase price of a dwelling however affordable living, the total cost of all aspects of residing in a location, is increasingly being discussed. In some circumstances the overall cost of living can be cheaper even when the purchase price of a property is higher if the dwelling is located on a public transport route or adjacent an employment hub. Unfortunately this is an academic discussion as the banks determine what is “affordable” through their mortgage application process which doesn’t recognise living costs. Location Efficient Mortgages (LEMs), which recognize the potential savings of a dwelling located closer to transport/employment exist in the USA but are not yet in Australia.
Population Density vs Builtform Density: “Up zoning” urban areas to improve housing density may not actually increase the population density. For example, if you knock down a house which housed a couple and three children and build a three unit development housing a couple, a fly-in-fly-out worker and two friends in the three units you will have no net gain in people living on the original piece of land (five in each scenario). True population density relies on land parcels of sufficient size that multi storey developments are practical.