Affordable Housing Conference - Malaysia

Attended this conference last week. Was invited to give a presentation about affordable housing in New Zealand (chose Auckland as the case study), and to chair one of the streams.

Most delegates were there from developing countries - like Malaysia, Philippines, Zambia, Zimbabwe, Nigeria - but there were a number there from Australia also.

I had heaps to talk about from New Zealand. What with the Affordable Housing Commission, the Auckland Unitary Plan, leaky buildings, our experiments with apartment buildings....

It was interesting how much New Zealand could learn from developing country experiences. And it was interesting to me, to learn from developing country delegates, what they picked up from my presentation.

Initially I thought we would not be comparing apples with apples.... 

This presentation was exemplary. To give you a bit of background on Malaysia's  SPNB. From its website:

"We aim to deliver the development of quality affordable homes that are sustainable and meet customer satisfaction through a culture of excellence and to become a caring and responsible developer mindful of social responsibility.

Syarikat Perumahan Negara Berhad (SPNB) was established on 21 August 1997 as a wholly owned subsidiary of the Minister Of Finance Incorporated (MOf Inc.) with the objective of providing quality affordable homes for every family in Malaysia in accordance with the National Housing Objective. SPNB is responsible in implementing Rumah Mampu Milik Programme and the Rumah Mesra Rakyat Programme to ensure those in low income group are able to affordably own comfortable homes, an agency for Rehabilitation of Abandoned Housing Projects, Government Quarters Programme in Klang Valley via SPNB-LTAT Sdn. Bhd. (USL) for various agency and government bodies and Special Project Programme such as for Program Perumahan Rakyat (PPR), housing programmes for Tsunami victims in Malaysia and Acheh, Indonesia as well as resettlement for flood risk area as per instructed by the Ministry of Finance. Apart from these main responsibilities, SPNB is also dedicated in providing housing for the less fortunate and poverty stricken families in Malaysia by contributing some amount of the company’s annual profits towards welfare works such as repairing or reconstructing dilapidated houses under Special Housing Projects via the Amal Jariah Scheme.

This slide was typical of many of the presentations. The problem of supply not meeting demand is experienced across many of the incomes demographics. Not confined to social (low) or middle income buyers. 1st time buyers are experiencing major issues with buying in Malaysia - especially in or around Kuala Lumpur.

SPNB's activities are distributed across many sectors of the housing economy. You can get a flavour of that from this slide. 

In all of the presentations there was explicit recognition of the cost of living for people - and that housing (being a verb - not just a noun - for commodification) had to be paid for alongside all of the other living expenses. Typically a Malaysian person takes out a loan for both house AND car. A key point made was that the cost of living is growing a greater rate than incomes - adding to the problem of housing affordability.

This slide summarises different Government housing funding, subsidy and construction initiatives. 

PR1MA was established under the PR1MA Act 2012 to plan, develop, construct and maintain affordable lifestyle housing for middle-income households in key urban centres.

Middle-income is defined as a monthly household (husband and wife) income of between RM2,500 – RM7,500. (To compare - about 2RM = $1NZ). The Prime Minister is fully aware of the financial pressures faced by the urban, middle-income population due to Malaysia’s rapid urbanisation. His vision is to rebalance assistance to the rakyat in both rural as well as urban areas. PR1MA is one of various initiatives implemented to help the rakyat manage costs of living in urban areas. PR1MA will be the first that exclusively targets this middle segment with homes ranging from RM100,000 to RM400,000 in a sustainable community. (ie $50,000NZ to $200,000NZ)

This slide resonates with the New Zealand situation. It looks at the challenges of providing affordable housing. But it provides other ways of looking at it - for example how much land is required for infrastructure - when it is used for housing. It also raises the matter of credit-worthiness - the ability of new home owners to actually buy into housing.

This slide reports on the performance of SPNB in building new homes for the low income range. The left pie chart reports on the number of housing units built, while the right pie reports on the cost in Ringaats. The cost of production is around $50,000/unit equivalent in NZ dollars.

This is a sample of the housing units referred to.

And the floor plan.What is interesting about all of this is that I am aware from talking to a number of housing providers in Auckland is that there is a growing demand - often from women - for houses decribed as "Corollas" - ie well built, go well, last well, but don't cost an arm and a leg. This can be an analogy for low cost. but it can also be an analogy for Asian mass produced industrially manufactured housing. This is exploding in developing countries in Asia. Made me feel that we are behind the 8 ball when it comes to housing supply in New Zealand.

Take a look at this Youtube clip. It's about the IBS- industrial building system in Malaysia. The travelogue format shows the basic usage and types of IBS systems. it can also be called as a prefab system. The types of houses and construction methods are quite eye-opening....