The son of Chris Gardner, author of 'The Pursuit of Happyness', was too young to remember most memories of being homeless, but one thing stuck with him: they were always on the move. For an entire year, they brought everything they owned wherever they went – his stroller, a duffel bag full of clothes, Chris' briefcase, an umbrella, and a bunch of diapers. Every day, they had a choice: to stay in a cheap hotel or buy food – they often chose to eat. As a result, they stayed in subway stations, rode trains and slept in public bathrooms before Chris finally got a job as a stockbroker, and saved money to move into their own home.
If their experience had happened in 2020, however, it would have been a totally different story. Not only were the capacities of shelters reduced to enable social distancing when COVID-19 hit, but homeless people across New Zealand, Australia and many other developed countries were given government-sponsored accommodation. By accessing hotels, motels, worker hostels and unused student accommodation, governments unlocked enough dwellings to go round.
All the noise about 'supply and demand' and the 'housing market' fell away when Chief Medical Officers dictated that people must be quarantined to get rid of a disease. They were responding to a pandemic, but they made an economic point: In a wealthy society, homelessness doesn't need to exist.
Now, as the urgency of the COVID-19 response abates, and governments have to decide what to do with the homeless people they housed, what happens next?
What are the drivers?
Homelessness is an extreme expression of a broader problem of housing security. Home ownership is a major determinant of housing security, and in Australia there was a decrease in owner-occupier first home buyers, from 32 per cent in May 2010 to 28 per cent in May 2020. Since 1995, the rate of private renting increased from 18 per cent to 27 per cent in 2018, and in Hong Kong home ownership declined from 54 per cent in 2004 to 49 per cent in 2019.
In the large Pacific Rim cities, from Auckland and Sydney to San Francisco and Vancouver, home ownership is increasingly out of reach. In fact, Auckland prices have increased AUD 100 000 in 12 months, and the housing markets in all Australian capital cities are either experiencing growth or are forecast to grow this year. The numbers say it all, but what is causing this in the middle of a pandemic?
We know that foreign investment contributes to price rises in many developing countries, and also results in a high proportion of vacant properties, further increasing homelessness. But the recent drop in interest and mortgage rates is causing people to scramble and take advantage of this to buy a second or third property, coupled with massive capital gains. Combining this demand with the shortage of available houses, housing prices inevitably shot up, which makes it harder for first-time buyers to jump into the market.
Various initiatives have been explored to address the shortfall. For example, New Zealand has its NZ First Home Grant for first home buyers; Singapore has its unique housing system operated by the Housing and Development Board (HDB); and Australia has New South Wales' Renting Affordability Scheme where the Department of Housing handed over social housing titles to community and social housing providers, helping them raise funding from banks to create new projects.
The design of social housing needs to keep pace
The real solution lies in effective housing policies and government spending. Two of the Pacific Rim's most expensive cities – Singapore and Tokyo – have proven this can be achieved: Tokyo reduced planning regulations and Singapore's HDB builds apartments; with both cities utilising the modularisation of building to reduce construction costs and make it more affordable for people to live in high-quality accommodation. Could this be rolled out in Western countries that traditionally have larger homes?
While vulnerable people might be able to currently access housing, good housing design and construction is crucial, otherwise it could be of a low quality, creating health and security problems. In New Zealand, this is being addressed with a Healthy Homes initiative requiring every rental home to meet heating and insulation standards by June 2021. Together with the Healthy Homes standards, the New Zealand Government has committed to building (and rebuilding) 11 000 social housing homes in the next four years. It's expected to cost around NZD 6 billion.
Modularisation is also emerging in the country with Panasonic Homes announcing earlier this year that they have completed their first prefabricated prototype home in Waikato, in partnership with Mike Greer Commercial. The build used the same large panel construction method that Panasonic uses in building earthquake-resistant houses and apartments in Japan and other parts of Asia. While there have been significant developments in the past, PrefabNZ chief executive Scott Fisher admits that it's still taking a while for the prefab industry to become established.
Stimulation of regional areas
For decades, governments have been trying to release the living pressures on major cities by encouraging settlement in regional areas. After nine months of COVID in Australia, the regions are experiencing influxes of interstate residents, buying property and embracing the lifestyle while working remotely in their city jobs.
Is 'decentralisation' merely cities exporting their problems to the regions? Is it good for our economy in the long term? After all, cities create certain efficiencies in managing people, particularly in education, healthcare and public utilities.
We must also consider the question of the labour market as people move from cities to the regions. This might not be an issue for sectors in which people can work remotely. However, it is an issue where people need to work on-site, for example construction, healthcare and emergency services.
In many cities around the world the cost of living is now prohibitive for many service workers, there is already a dearth of cab drivers, nurses and restaurant workers living in the actual metropolitan area, leading to extra commuting time and all of the associated productivity losses and well-being impact.
Customer-centric design
Of all the responses to COVID, who will be the first one on track to emerge with a housing model that eliminates homelessness? Just imagine, if New Zealand is going to succeed… 11 000 properties in four years; with the right mix of properties and tenant models, design and finance approaches.
It includes classic 'state housing' tenancies, affordable private purchase builds and funding for iwi housing providers to build housing estates that deliver houses by Māori for Māori. Combatting homelessness requires governments to be in collaboration with developers, engineers, NGOs, think tanks and financiers. Broadening the ideas-base decreases the likelihood of investing in obsolescence.
New Zealand's approach is 'customer-centric design' ‒ matching the built environment to people, not the other way around. This is aligned with their government's Wellbeing Budget approach to "putting the current and future generations of New Zealanders at the heart of everything we do." What if we can replicate it in other countries as well?
COVID-19 proved that governments have to start with concern for people. The resulting social housing policies will succeed because they keep that priority in mind. Maybe only then will homelessness be finally solved.
This blog was co-authored by: Francine Pavkovic
