In
this last part of the book, we will look at specific designs that can address
the problems of delivering low-cost, low-medium cost and affordable housing
that almost all Malaysians can afford to own a house.
HOUSING
AFFORDABILITY IN MALAYSIA
Housing
affordability is commonly expressed as Price-Income Ratio (PIR), defined as
median home price to median household income. International Demographia rates
affordability as follows:
Rating
|
Median
Multiple
|
Severely Unaffordable
|
≥ 5.1
|
Seriously Unaffordable
|
4.1 – 5.0
|
Moderately Unaffordable
|
3.1 – 4.0
|
Affordable
|
≤ 3.0
|
This is the median household income in Malaysia in 2014 by state.
So,
for example, the median monthly income in Kelantan is RM2716 in Kelantan, in
Perak, RM3451, in Melaka is RM5029, in Selangor, RM6,214, in Kuala Lumpur,
RM7,620. Affordability at 3 times annual income In Kelantan it is about
RM98,000; in Perak RM125,000; in Melaka RM184,000; in Selangor RM224,000; in
Kuala Lumpur RM274,00
The
question is: what sort of housing can be developed that is within these
affordability limits. The usual approach to this question is to look at
conventional types of houses like terrace houses, low-rise and high-rise and to
see how the construction cost of these housing units can be minimized for each
type of housing. However, I believe that making housing more affordable is not
all about price: quality can play a major role in reducing cost.
Let
me explain.
QUALITY
AND AFFORDABLE HOUSING
Malaysians
moved from kampongs to terrace houses when they migrated to towns: land in
towns was too costly to allow people to build detached houses on their own
piece of land. And when terrace houses become too expensive, they moved to
low-rise walk-up flats, or if they could afford it, high-rise apartments. For
many, living on the ground, on landed property, remains their dream. If they
must give up this dream, it is with reluctance.
Looking
at our southern neighbour, Singapore, moving people from kampongs or overcrowded
shop-houses with over 100 persons living above a single shop, to modern
high-rise flats was not easy.
Lee
Kuan Yew wrote “There were enormous problems when we resettled farmers and
others from almost rent-free wooden squatter huts with no water, power or
modern sanitation, and therefore no utility bills, into high-rise dwellings
with all these amenities but also a monthly bill to pay. It was a wrenching
experience…”
“Several
pig farmers couldn’t bear to part with their pigs and reared them in their high-rise
flats…a couple with 12 children …brought a dozen rear chickens and ducks to at
the kitchen…”
“For
a long while many…walked up the stairs because they were afraid of lifts. There
were people who continued to use kerosene lamps instead of electric bulbs.”
Malaysia’s
experience was much more sanguine: the first big move was from kampong houses
or squatter huts to terrace houses. The move was looked at as a step up – a
desirable upgrade. However, as landed property becomes unaffordable, a move to
apartments is seen as a step down.
Dato’
Alan Tong, pioneer of condominiums in Malaysia, has recounted how he had to add
more and more facilities to his first condo – OG Heights – to attract buyers
who were more used to landed property. Of course, as people got used to
high-rise living, they learned to appreciate its advantages and adapted to the
disadvantages. So now, condos in Malaysia can fetch prices as high as that of
landed property. And in Singapore, the majority are happy and are proud of
their HDB apartments.
SUBSTANTIALLY
REDUCING THE COST OF HOUSING
The
cost of land and construction are the two main components that determine
housing price and affordability. In looking for solutions to reducing costs,
many have looked to see how construction costs can be reduced and have
recommended the development of efficient and standard designs so that housing
can be mass produced. The adoption of industrialized building systems is also
recommended to make the production of houses more factory production.
However,
there are at least two limitations with this cost saving approach: the first is
that the benefits of IBS and mass production is best achieved when there is a
high degree of repetition. Housing demand on the other hand, like demand for most consumer
products, favours variety. So, designing standard plans so that whole
neighbourhoods comprise only a house-type to maximize repetition is catering
for the convenience of the builder, not the interest of the buyer.
The
second problem is that the savings in construction cost to be gained from mass
production is limited. From the practical experience of many, including mine,
it is possible to save money from the adoption of IBS, but the effect is just
not large enough.
IBS
is about the process of building and mainly relates to assembling the main
structural elements. However, the structure and fabric of the house makes up
just one portion of the cost of housing. Services and infrastructural also make
up a substantial amount. Still another factor to consider in trying to substantially
reduce is the cost of land other costs related to it.
Adopting
IBS might speed up construction, reduce waste and result in better quality
finishes, but realistically, the possible savings expressed as a percentage of
total construction cost reduce is only about 5%.
It
is also possible to consider the price of land as artificial and to reduce it
by releasing government land at a subsidized rate or resort to compulsory land
acquisition at below market price, but those actions are beyond the scope of
this book.
The
technical alternative to the high price of land is to introduce more intensive
types of housing with higher density, so that the cost of each acre of land can
be shared among more units. The advantage of this approach is that not only is
there a saving in land cost but higher density housing can also mean lower
infrastructure cost and building cost. To
illustrate this point let’s look at a typical piece of suburban land that costs
RM25 per square foot and the ball park figures for the cost of building and
infrastructure.
Table
1: Typical costs of Land, Building and Infrastructure where land is RM25 per
square foot.
Single-storey Terrace houses
|
Cluster Townhouse
|
5 storey apartment
|
|
Density
|
14
|
20
|
55
|
Plot ratio
|
0.37
|
0.46
|
1.26
|
Land cost RMpsf
|
68
|
54
|
20
|
Building Cost RMpsf
|
100
|
90
|
80
|
Infra CostRMpsf
|
20
|
17
|
15
|
Subtotal
|
188
|
161
|
115
|
% cheaper than Terrace House
|
14%
|
39%
|
Here I’ve listed the cost of land, building and infrastructure of a range of alternative affordable products – terrace house, cluster townhouse and 5-storey shop-apartment - all with 1000sf net sellable floor area (NFA). There are large cost savings for land. There are also big cost differences between constructing a terrace house and a townhouse or a five-storey apartment or a shop-house! And then there are cost savings that accrue from reductions in infrastructural costs.
The
reason for the savings in land cost is very simple – more units share the cost
of each acre of land. Having more units packed into each acre also reduces
infrastructure cost as the same or lower amount of road, drains, pipes and
sewers serve more units. The terrace townhouse in which the ground floor and
the first floor belong to different owners share more common walls, floors and
roofs compared with the terrace house. In the apartment, there is an even
higher percentage of common walls, floors and roofs.
Naturally,
given a free choice and not taking price into consideration, people will choose
the terrace house over the 5-storey apartment. As they would naturally prefer a
bungalow to a terrace houses.
The
challenge is to make the alternatives that are cheaper to build turn out to be
as attractive as the terrace house so that house-buyers do not see them as a
downgrade. It is here where Honeycomb housing can play a major role.
Our
aim is that the less expensive Honeycomb alternatives might even be considered
as an upgrade to the terrace house.
In
the following chapters, there is a common theme. We look at a series of
conventional house-types – from townhouses, shop-houses to five storey flats –
and propose a new Honeycomb adaptation that makes them more attractive and
desirable. Mainly, by providing homes with a private and shared garden, we make
the homes as similar as possible to terrace houses.
In
the next chapter, we look at Townhouses. This house-type, is one step down from
terrace houses. In the conventional form, two-storey 24”x80” houses are divide
into two – one unt upstairs and another one downstairs.
Following
this, 5-storey walk-up flats. As building low-cost terrace houses became too
expensive, developers looked to this house-type. If Alan Tong and the HDB
provide the examples of how quality was successfully achieved in what were new
forms of housing, the experience of low-cost walk-up apartments demonstrates
the what happens when quality is lacking. We propose how to improve the quality
of these apartments by adopting the Honeycomb idea.
In
the chapter 19, we look at how the Shop-house can be adapted to answer the
problem of the most difficult segment of the affordable home market: low-cost
housing.
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Please help me proof-read this book. Just point out the errors in the comments section (look at the bottom left hand side of each post).
I'll post this book to the first reader who spots 5 mistakes...!
