House sharing is affordable housing
Is affordable housing just a question of assessing the cost of construction, including land costs, building and profit margin, or should it also consider the broader life-style benefits?
There is much talk about affordable housing in the UK and other countries. Land prices, construction costs and developer profit needs have all tended to grow at above wage inflation rates, so the average house price is driven higher and higher and becomes less affordable. This is especially the case in more desirable and fashionable areas.
Affordable housing is a term developed by planning authorities trying to meet broad housing needs, conscious that developers would rather create only properties delivering higher profit margins. This can lead to only executive homes at high prices or city-centre apartments of small size being developed, unless managed.
This has historically left the government of the day to work out how to house the millions of people who earn average wages, especially families – delivered via the public or private sector. They haven’t been very successful, especially in larger and more fashionable cities.
For families, separate houses make sense, but for other parts of the population the single dwelling makes less sense both financially and socially. The growing number of older and single people (read without family) makes this even more important.
The private and student rental markets provide a model of the financial case for shared housing. Student halls typically have featured 8-10 private sleeping pods around a common dining/living area; it is accepted that the living areas will be small. Laundry and other amenities are provided on larger sites.
Private rented housing shows that house sharing is more affordable. Our analysis of this shows you can save money house sharing – around 32% saving per person on a 2 person share and 50% on a 3 person share. That is affordable housing whatever area you live in.
Sharing a house or flat is the best way to find affordable housing in your area; the increasing number of people taking this route, particularly when older is both driven by financial concerns as well as social.
A question of value
This then brings up the question of how to value affordable housing. Is it just the cost of construction, including land costs, building and profit margin, or should it also consider the broader life-style benefits?
There is a lot of research about the importance of people staying ‘in place’ as they grow older, connected to their network of friends and the amenities they know how to access.
Social connection is important; being part of a neighbourhood where you have acquaintances you can say good morning to, is as important as having close friendships you can depend on. The lock-down has shown that communities and neighbours do pull together to care for and support each other during times of crisis and this has a value. It provides peace of mind as well as better mental health.
One of the main benefits of house sharing is that you can afford to live in an area that might be prohibitively expensive if you did not share; this provides better affordability, allowing you to stay in-place.
Living in the area you want to can add value to your life. Surely affordable housing should be about value not cost? Maybe we should refocus the debate around ‘best value housing’ instead of lowest entry price, so that these other values can be counted?
House sharing, whilst not right for everyone has a big part to play in providing affordable housing, however it is defined.
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