Housing as an infrastructure sector | KPMG | GLOBAL

A better place to live: Housing as an infrastructure sector

Housing as an infrastructure sector

Where people live and work has a massive impact on the way we plan and develop infrastructure.

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Today, there are a growing number of cities that view housing as a key part of the infrastructure mix.

Yet, as the need for housing evolves and demand for services changes, many city and government leaders are wondering whether their housing strategies are fit for purpose.

To learn more about how housing strategies are changing - and influencing civic infrastructure - we sat down with three housing leaders: Anne Kerr, Global Head--Cities at Motts MacDonald; Kathleen Llewellyn-Thomas, General Manager of Community Services with the City of Vancouver; and Leslie Gash, Vice President of Development at Waterfront Toronto.

Why is housing moving up the government and social agenda?

Kathleen Llewellyn-Thomas: I think many governments and leaders recognize that the housing market does not always meet the needs of the local population, particularly in terms of household size and affordability. We know we can't stop urbanization so the big question is how we can accommodate more people affordably in a constrained area. At the same time, governments are looking at demographic shifts and trying to assess what the housing needs will be in the future.

Anne Kerr: I absolutely agree; availability and affordability are real challenges around the world and particularly relevant in parts of Asia and the Far East. Migration into cities is happening at an alarming rate putting huge pressure on the housing and affordable housing markets. Up until today, the response has often been to encourage people out of cities and into more distant communities where housing may be more available and reasonably priced. But the problem is that people then lose community connections and can be disconnected from their work and the city community. 

Leslie Gash: Right. And I think that has led governments and city leaders to take a more holistic view of housing that incorporates factors such as transportation, social cohesion, sustainability and economic development. In many cases, governments are looking to improve the availability of family housing in the center, not only to help people live closer to their work and reduce travel times, but also to increase densities in those areas where good infrastructure already exists, thereby helping the city function more smoothly and efficiently.

How is this impacting the way housing is planned?

Anne Kerr: Governments and planners recognize that they need a much more dynamic mix of development in their cities. And that means thinking about more than just affordability. So now they are building their strategic plans to reflect a range of other considerations such as the availably of employment and transport. There's a growing recognition that land, transport and residential strategies need to be fully integrated with employment opportunities for housing to really contribute to the vibrancy of a city.

Leslie Gash: One of the big challenges is how to deal with some of the legacy issues. Past housing strategies actually created a lot of isolation. In many cases, it created a separation between low income neighborhoods and more affluent neighborhoods: streets that don't connect to the rest of the city; lighting and security issues; communities that were 100 percent rent-geared-to-income housing. The big question is how you move from that towards more mixed communities and dynamic developments.

Kathleen Llewellyn-Thomas: I absolutely agree. And I think that is leading cities to think more about the types of housing and the types of services they need to provide - either in the community or perhaps in the same building - to create inclusive and well-run communities where people feel connected and supported. And that may not mean replacing all the housing stock but rather thinking about how you preserve the community aspects while expanding the model and increasing the density of the area to build social resilience into community.

How are cities encouraging the development of better housing stock?

Leslie Gash: Land value capture strategies are supporting the development of new and revitalized housing stock in Toronto. As we redevelop our older housing estates, we are entering into public private partnerships where the land value is used to support and rebuild the communities. The idea is that, by selling or leasing that land for condominium development, we are also improving the availability of new private rental stock and encouraging developers to include a mix of low income and affordable housing.

Anne Kerr: Hong Kong has taken a similar approach, but centered around the development of the MTR mass transit line. Developers leverage the land value appreciation around the new stations to build an affordable development that includes commercial space and residential space. And that is encouraging a much more integrated community with transit, commercial opportunities and housing all in the same location. The model has proven to be a big success and is now being used in cities around the world.

Kathleen Llewellyn-Thomas: We're also using policy tools in Vancouver to encourage a better mix of housing stock development. We have an inclusionary housing policy that asks developers in certain zones to allocate 25 percent of their stock to affordable or low-income housing. We also have expectations for how much of the development is built to meet family requirements, versus building massive towers filled with 1-bedroom and bachelor apartments.

How are technology and demographic trends influencing the housing strategy?

Anne Kerr: Technology has been a huge help to developers and planners. At the highest level, we're using new technologies, data and analytics to help cities and governments conduct really good, appropriate and logical collective planning at a much faster rate than ever before. At the asset level, you’re seeing massive innovation in the way houses are designed and built, with the inclusion of 3D printing and other advanced techniques. With new materials being developed and used to make the houses we build much more efficient and resilient.

Kathleen Llewellyn-Thomas: I think we're also going to see new pressures and considerations arise as a result of the circular or shared economy. It hasn't changed the way we think about supply yet, but it is starting to influence the way people think about housing and affordability. We don't want to get in the way of homeowners and renters finding supplemental income that could mean the difference between paying their rent or not paying rent. So we're also thinking about how we bring about shared-economy regulation to bring those types of transactions into the regular economy.

Leslie Gash: Taking that idea slightly further, we're starting to talk about some of the other impacts of the shared economy. We've started to see people - non-family members - enter into shared ownership agreements for houses. And we're seeing many people - millennials in particular - delay housing purchases until later in their lives. And both of those trends are impacting housing availability. It won't be enough to reduce demand for new and affordable housing, but it may influence the way we build and develop homes in the future.

What role does civic infrastructure play in delivering on the housing strategy?

Kathleen Llewellyn-Thomas: Civic infrastructure plays a massive role in helping create the communities we want to see. One of the key goals is to increase densification as a way to make better use of the existing infrastructure - water pipes, sewage, transit systems, fire and police services, and garbage collection, for example. I think it also means a change in the way we plan and develop those assets. We need to think about the housing, employment and mobility connections. Investing in affordable housing on transit is important and just as important is planning for living wage jobs on transit lines too.

Leslie Gash: Densification around existing infrastructure is central to improving the value and reach of those assets. But it is also key to enhancing the resilience of a community and housing development, both from a social and a physical perspective. Around the world, we are seeing the importance of building resilient communities and cities - not just to protect against climate risks but also socio-political ones. And that requires strong and resilient civic infrastructure.

Anne Kerr: I actually think we are going to start to see much stronger links between housing and infrastructure. I've spent a lot of time talking to city and government leaders about how they can design assets to take on a `second life' after they have outlived their initial purpose. We're already seeing this happen after major sporting events. For the London Olympics, some assets were built in a way that would allow them to be dismantled and converted into new uses once the games were over. And I think we need more of this kind of thinking in our every-day infrastructure decisions.

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