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Build Costs, Prices, and Affordable House Retention: A Case Study of the Starter Home

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This research follows the affordability trajectory of the Starter Home built in 2010 as a demonstration model.

The Starter Home was the outcome of a design competition by the Department of Building and Housing in 2008. The dwelling was designed for flexible use and configuration with three bedrooms and two bathrooms and two vehicle spaces on a 474m² site. The Starter Home was designed to be energy efficient. When the first Starter Home was built in 2011 by Housing New Zealand, the construction was around $230,000 (GST excl). The original Starter Home illustrates that low-cost construction can deliver decent homes which are adaptable and able to achieve high thermal performance and low energy consumption. The trajectory of the Starter Home also demonstrates that well-worn but too often ignored precept that building costs are not the same as housing prices. The subsequent valuation of the original Starter Home after its initial sale shows that lower build costs are critical, but not sufficient, to provide housing affordable to low- and modest- income households. Strategies to encourage low-cost housing production need to be matched with strategies to retain affordable dwellings within the housing stock.

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