Build Costs, Prices, and Affordable House Retention: A case study of the Starter Home
Dr Kay Saville-Smith
Director, CRESA
kay@cresa.co.nz
Abstract – Tuhinga Whakarāpopoto
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.
Articles associated with this research – Karere Tūhono
Murphy, L., (2019), Performing calculative practices: residual valuation, the residential development process and affordable housing, Housing Studies, DOI: 10.1080/02673037.2019.1594713.
Other reports associated with this research
Murphy, L. (2019), Financiers and Developers: Interviews concerning their interests, relationships, and the residential development process, Working Paper for Building Better Homes, Towns and Cities SRA: The Architecture of Decision-Making, Wellington: BBHTC. https://www.buildingbetter.nz/resources/publications/
Rehm, M., Cheung, W., and K. Saville-Smith (2023), Builds and Housing Prices: A case study of the impacts of special housing areas and accords in Selwyn District, Report for Building Better Homes, Towns and Cities National Science Challenge, Affordable Housing for Generations, May 2023, Wellington: AFHG, BBHTC. https://www.buildingbetter.nz/publications/housing/builds-and-housing-prices/
Saville-Smith, K. (2018) Following the money: Understanding the building industry’s exit from affordable housing production, Research Bulletin: for Building Better Homes, Towns and Cities SRA: The Architecture of Decision-Making, Wellington: BBHTC. https://www.buildingbetter.nz/publications/housing/following_the_money/
Saville-Smith, K. (ed) (2019) Revitalising the Production of Affordable Housing for Productive, Engaged & Healthy Lives: Integrated Report, Report for Building Better Homes Towns and Cities National Science Challenge: Revitalising the Production of Affordable Housing for Productive, Engaged & Healthy Lives, Wellington: BBHTC https://www.buildingbetter.nz/publications/housing/revitalising_the_production_of_affordable_housing/
Keywords – Kupu Hāngai
Housing, affordable housing, affordability, energy efficiency
Fields of Research – Āpure Rangahau
Economics, Housing, Urban House Prices
Date – Te Wā Whakarewa
2023-06
Type – Te Auaha
Collections – Kohinga Kaupapa
- Te Tai Tokerau / Northern Aoteoroa New Zealand
- Tāmaki Makaurau / Auckland
- Hauraki-Waikato / North Western North Island
- Waiariki (Tauranga, Whakatāne, Rotorua, Taupo)
- Te Tai Hauāuru / Western North Island
- Ikaroa-Rawhiti / East Coast and Pōneke / Wellington
- Te Waipounamu / South Island
- Homes and Spaces for Generations
- Mana Kāinga / Housing
Citation – Kupu Hautoa
Saville-Smith, K., 2023, Build Costs, Prices, and Affordable House Retention: A case study of the Starter Home, A Report for Building Better Homes, Towns and Cities National Science Challenge, Affordable Housing for Generations, June, 2023, Wellington: AFHG, BBHTC.
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