Affordable Mosaic Housing Cebs v1

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Affordable Mosaic Housing:

Re-thinking low –cost housing

10/12/2009 Affordable Mosaic Housing: Re-thinkinglow –cost housing

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Abstract

The very term "Low Cost Housing"assumes that the challenge is to findinnovative ways toreduce the cost of building housesand in doing so, making itaffordable to every family to own,regardless of their income level. .

In this paper, we approach the subjectfrom a social perspective, in particularthe problem is seen through a socialstandpoint. From this point of view, it becomes obvious that placement and concentrating familiesof the poor - financially and sociallystressed - in one location, does not

make sense. The higher theconcentration of people in these lowcost housing areas, the moreunmanageable the social problemsbecome.

The Affordable Mosaic Housing modelof cluster houses and clusteredneighbourhoods aims to producebetter a better social by introducing agreater mix of housing types on eachstreet and each neighbbourhood.

10/12/2009 Affordable Mosaic Housing:Re-thinking low –cost housing

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Low Cost Housing inMalaysia

In Malaysia the provision of Low costhouses is shared between the publicand private sector.

In the 80’s the public sector housing isundertaken by Government agencieslike the State Economic DevelopmentCorporations.

The private sector undertook theconstruction of Low cost housesthrough a rule that required housingdevelopers to have 30% of what theybuild to be Low cost houses.In the 80’s and 90’s (until 1998 atleast), the private sector outperformedthe public sector.


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Unit Price Location(landcost)

IncomeGroup

Housetype

RM 25,000 Cities andbig towns

RM1,200 toRM1,500

High riseFlats

RM 35,000 Big townsand suburbs

RM1,000 toRM1,350

5 storeyFlats

RM 30,000 Small towns RM850 toRM1,200

Terrace andcluster

housesRM 42,000 Rural areas RM750 to

RM1,000Terrace andclusterhouses

The Low cost houses built by theprivate sector were for sale to thelower income group. The idea was todemocratise home ownership. Theprice was initially set at RM25,000.This amount has been increasedthrough the years.

Yet, there are clearly problems in thedelivery of Low cost houses in the newmillennium .


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Low cost Ceiling Prices 1998 Revision, fromMohd Razali Agus, “Perumahan Awam diMalaysia”, 2001



Problems for Developers

Subsidized Low Cost houseLow cost houses are subject to aceiling price much lower than theirconstruction cost.Developers pay for this shortfall byputting higher prices on the otherhouses that they sell claims that

private developers are unable to copewith rising construction costs. Theprice of low-cost houses is still cappedat a maximum of RM42,000 per unit,which means developers end upsubsidising costs of betweenRM18,000 and RM28,000 per unit.You would expect demand for theselow cost houses to be high. Yet, thereare many completed Low cost houseswhich have yet to find buyers.


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http://www.thenutgraph.com/no-place-like-home Ng Boon Hooi,“No place like home”, 8 th September, 2008. retrieved 18 th

October, 2008

http://www.thenutgraph.com/no-place-like-home










Overhang in the supply of low cost houses

“Overhang” refers to completedproperties issued with Certificate of Fitness for Occupation and unsold formore than nine months.There has been a persistent overhangin the supply of low cost houses sinceat least the 1997 recession.

Developers lose money on Low costhousing even when they are fully sold.When they can’t be sold, the effect onthe developers cash flow and bottomline can be catastrophic.


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2004 2005

Value RM1.82 billion RM2.65 billion

No of units 15558 19577

2-3 storeyterraced houses

5074

Condominiumsand apartments

4474

Single storeyterraced Houses

3142

Flats 1728

Low cost Flats 1800

Low cost houses 1126

The Sun “Hung up on residential property”, 28 -Apr-2006, citing The PropertyMarket Status Report recently released by the National Property InformationCentre (Napic) of the Valuation & Property Services Department.



Problem for Buyers Lowresale value

Buyers of Low cost houses have alsosuffered. Especially many of hose thathave encountered financial hardshipsand have had their mortgagesforeclosed.A cursory study of Auction Noticesover the past year has revealed thatthe Reserve Prices of low-cost flats inlocations like Bukit Sentosa, BukitBeruntung in the north of KualaLumpur is around RM9,000, a smallfraction of the original selling price;perhaps even lower than the cost of demolishing it!To many unfortunate people, their Lowcost houses are not appreciatingassets that can help lift them out of poverty. In fact the low cost houseshave become financial burdens.


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This reserve price of RM9000 is not exceptionally low.There are 11 other apartments similarly priced(Source: NST UbuyUsell, Tuesday, Aug 22 2006)



Problems for HouseBuyers

The burden of a dysfunctional Lowcost housing policy is not only ondevelopers and unfortunate buyers.The general house buying public is alsoaffected.The responsibility of providing Lowcost houses by private developers isoften described as the developercarrying out his social responsibility.But it is a mistake to say thatdevelopers subsidize low cost housesout of his profit. Actually low costhouses are cross-subsidized by taxingother types of houses.Where the requirement is that 30% of houses have to be low cost, developersfind it easier to cross-subsidize bybuilding higher cost units.


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It is easier to raise the money tosubsidize 3 units of low cost houses(say RM 25,000 per unit) from tenunits of RM250,000 superlink housesthan from ten units of terrace housespriced at RM150,000.

Looked at this way, the 30% low cost

requirement is a regressive tax.The net effect is that, with the 30%requirement in place, developers arediscouraged from delivering housing inthe price categories just above that of the low cost houses.

A significant segment of thepopulation is thus deprived of homesthat they can afford.



State governments have recognizedthis problem. One response has beento designate a range of lower costhousing. For instance Johor andSelangor have modified requirementsfor low-medium and medium costhouses .

The distorting effect on the supply of housing priced just higher than theregulated types still remains.


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Low Cost LowMediumCost

MediumCost

JohorPrice Range RM25000

toRM42000

RM60000 RM80000

Percentage

of Total noof houses

20% 10% 10%

Selangor

Price Range RM35000toRM42000

RM65000toRM72000

RM80000toRM90000

Percentageof Total noof houses

20% 10% 10%



Creating Value

This paper looks at the problems of

Low-Cost Housing from a town-planning perspective and proposeshow we can improve the design of thelayout of new housing.The Low cost housing policy we areconcerned with here is not primarilyabout providing shelter to the poor. Itis about home ownership for them.Our starting point to finding thesolution is to recognize that Low costhouses must represent good value.Ask any Valuation expert in what arethe three most important factors thatdetermine value, and the answer willbe:“Location, location, location”

A study based on a Low Cost, LowMedium Cost and Medium Costproject in Kajang provides a goodillustration In what is meant by“location”.


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Taman Sutera

It is common practice to build low cost,low medium and medium cost units inseparate blocks. In this project, myfirm tried to convince the client andthe local authorities to allow the threecategories to be mixed in any oneblock, with higher priced units on thelower floors and lower priced units onthe higher floors.What we achieved was low-mediumcost units mixed with medium costunits in the same 5 storey block.The low cost units had to be on itsown; no units were allowed on the theground floor and the flats were 6storeys high.


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Block Ground First Second Third Fourth

A RM 77922.14 RM 80046.25 RM 77564.00 RM 69225.00 RM 64697.50

B RM 72307.50 RM 77221.25 RM 75834.75 RM 71040.00 RM 61852.00

C RM 75412.31 RM 78372.50 RM 76051.88 RM 70876.63 RM 61501.25

D RM 74167.50 RM 78933.75 RM 78138.75 RM 70417.63 RM 64134.24

E RM 74876.25 RM 78505.00 RM 76747.50 RM 68820.00 RM 62642.5

Average RM 74,937.14 RM78,615.75 RM 76,867.38 RM 70,075.85 RM 62,965.50



The units were generally launched forsale block by block. The developerswould take bookings from theprospective purchasers who wererequired to come back within a fixedperiod to sign the SPA and make thefirst 10% payment. For this research,the date of the signing of the SPA wastaken as the date of sale.The data was sorted out by block andby floor. For every floor of each block,the average day it took to sell eachunit was calculated.It can be easily seen that the higherpriced low medium and medium costunits sold much faster than the lowcost houses.


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FLOOR AVERAGE NO OF DAYS IT TOOKTO SELL OFF UNITS

Category Low Cost Low Medium /Medium Cost

Price RM42000 RM60000 toRM80000

Built up area 650sf 771 – 850sf

Ground Floor 36 nonFirst Floor 57 130Second Floor 117 198Third Floor 167 261

Fourth Floor 190 702Fifth Floor non 1251*

* At the date of the report, the flats on the top floorwere still empty, so the count was still climbing



The importance of thesocial environment factor

Physically , there was not muchdifference between the low cost, lowmedium and medium cost houses.

The finishes werre the same. The lowcost house has separate wc andshower, whilst the other units havetwo bathrooms. All the house-typesused louvre windows. The low costunit was just 24% smaller than thebiggest medium cost unit. Yet the lowcost houses were half the price of thebiggest unit.The site for the low cost flats was justnext to the low medium /medium costflats. There was no difference in thedensity (in terms of units per acre)between the two. Not much differencein the specifications of the externalareas either.

Surely the low cost units would sell likehot cakes, or at least faster than themore expensive units!But this was not so.There may have been other factors atwork, but this study clearly illustratesthe importance of the social

environment.We can surmise that the people heredon’t seem to mind living in mixed -income communities but definitelydislike living in a low-incomecommunity.

This is not surprising. Low cost housing

has acquired a stigma. “Low costhousing for low class people” .


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Location, location,location

We believe that there are at leastthree aspects to location.The first obvious aspect is that of geographical location. A house close tothe city centre is sure to be morevaluable than one very far away. Butreality is more complicated than that.

The second aspect is the physicalquality of the environment around thehouse. A house in a quiet leafy cul-de-sac will more valued than one onan untidy, noisy street.The third aspect is the social quality of the environment. This would includethe sense of belonging that residentsfeel to their neighbourhoodcommunity.As the Taman Sutera study reveals, theimportance of the social aspect shouldnot be underestimated.


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Cluster Layout

In the paper, Tessellation Planning andHoneycomb Housing, 2005, weintroduced the idea of cluster housesclustered around courtyards in a cul-de-sac arrangement. Since then wehave developed a rectilinear version of the hexagonal form of Honeycombhousing, which we believe to besuitable for the more affordable endof the market.


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Courtyard Neighbourhood

The Mosaic layout is created byarranging courtyards, such that eachbuilding would face at least twocourtyards. The buildings are then sub-divided into 2, 3 or 4, to createduplexes, triplexes or quadruplexes,or even into 8 townhouse units.


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The basis of the subdivided buildingsand land area allows for the creationof smaller built-up units, thus makingthe houses more affordable. But theessence of this method of organisationis that more units are created withoutcompromising the quality of theexternal environment.


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Community Friendly

Compared to the terrace house layout,the Mosaic layout is more community-friendly with houses clustered aroundsmall parks, like friends sitting arounda table where residents can recognisethe small number of neighbours andthus, better able to deal with ‘strangerdanger’. Safer streets are created byminimising cross-junctions and trafficspeed is reduced by the unique roadpatterns. The pattern also createschild-friendly pocket parks, suitable forpre- school children’s outdoor play andcommunal activities with many ‘eyeson the street’.


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Environment friendlyThe Mosaic layout promotesenvironmental-friendly spaces to plantgiant shady trees increasing efforts tocool outdoor temperature whilst stillfriendly towards insects, birds andsmall animals, not just on flat land, butalso suited to undulating land. In thisway, it also saves development cost byachieving better land-use efficiency

with fewer roads thereby reducinginfrastructure cost.


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Efficient use of land

In terms of land-use efficiency, themosaic layout compares well againstthe typical terrace house layout. Thedensity is only marginally lower whilstthe average size of units is larger by aquarter. This achieved by the largereduction in area required for roadreserves.


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TERRACE MOSAIC

ROAD 46.6% 34.5%

SALEABLE LAND 43.2% 55.2%

GREEN AREA 10.3% 10.3%

NO OF UNITS/ACRE 15.9 UNITS 15.5 UNITS

AVERAGE SIZE OFLOTS

1180SF 1553SF 24%LARGER



Rethinking Housing LayoutDesign

Malaysian town planning practiceowes much to the town planning ideasof the early 20 th century. The controlof density and land-use throughzoning, the hierarchy of roads,neighbourhood units, and theimportance of green open space andcommunal facilities are ideas stronglyentrenched among both the privateand government sector planners andcan be seen in local planningguidelines.In developing the Mosaic concept intoa complete neighbourhood layout, wequestioned two ideas deeply

entrenched in town planninq.The first is to rethink the idea of “neighbourhood”. The second is about“zoning”.


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Neighbourhood andcommunity

Both the words ‘neighbourhood’ and‘community’ have become debased byconfusion between a social andphysical meaning. Developersroutinely use the word community tomean housing estate. Clarence Perryintroduced the concept of neighbourhood unit in the 1920’s inNew York with a list of physicalplanning characteristics that couldencourage city folk to develop acommon sense of belonging.Does it really work?


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Clarence Perry’s “Neighbourhood Unit”

– Population of about 3000 to 10000, being the size that would haveits own elementary (primary) school of about 1000-1600 children.

– The school, along with other communal facilities like hall, libraryand church would be centrally located.

– The neighbourhood would be ringed by arterial roads; the arterialroad was to discourage through traffic into the residentialneighbourhood, but also to give a distinct boundary to theneighbourhood.

– The shopping area would be at the periphery of theneighbourhood, along the arterial road.

– There should be a system of small parks and recreation areas toserve the children and youth. He suggested 10% of the total area tobe a reasonably good provision.

– The roads within the neighbourhood would be the small local roadsin front of the houses and collector roads that joined the local

roads to the arterial roads, the



Neighbourhood - socialrather than physical

We argue that a neighbourhood shoudnot be understood in terms of a list of ingredients in a recipe, but rather inthe whether residents actually feel thesense belonging to a neighbourhoodand act according to that perception.To try to measure it, we would look atthe:

• quantity of social interaction

• quality of social interaction

• mutual cooperation

• positive feelings towardsneighbours (without necessarilyhaving social contact)

• influence• sense of belonging and

membership

• sense of place

Our work with Mosaic housing ispremised on the hypothesis thatresidents who live in smallneighbourhoods are more likely torecognize, get to know, interact andform social groups than those who livein bigger neighbourhoods.


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Alternative Concept of Neighbourhood

Mosaic housing adopts a hierarchicalconcept of neighborhood. A familymay belong simultaneously to a‘courtyard neighborhood’ (of say, 16houses), a ‘cul -de- sac neighborhood’(of say, 42 homes), a ‘blockneighborhood’ (250 houses, say), anda ‘town community’ of around 1500houses. The latter is what correspondsmost closely to Perry’s neighborhoodunit.

However, we argue that it is at thelevel of the ‘courtyard neighborhood’that the sense of neighborhood would

be strongest: a cluster of 16 houseswith a population of only 80 is asetting where residents can easilyrelate to each other.


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Defensible Space

The concept of “Defensible Space”was first introduced by architect Oscarnewmn in the 1970’s. he proposedhousing layouts producesa hierarchy of private space, semi-private space andpublic space, where residents are ableto exercise influence over theenvironment just outside their homes:visitors know when they are entering asemi-private domain.The Mosaic design assists in providingnatural surveillance of the externalspaces; every house lies in a cul-de-sac, which naturally producesdefensible spaces.


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Zoning

Ebenezer Howard’s vision of GardenCities had industrial, commercial andresidential uses neatly segregatedfrom each other.The Garden City consists for differentzones, street types and green.The core in the centre contains acentral park, surrounded by acommercial, cultural andadministrative zone.Six boulevards connect the centre withthe circumference, which are thenoverlayed by ring roads around thecentre, forming the residentialneighbourhoods or wards

The outer ring is supposed for smallscale industries and manufactories tokeep the inhabitants away fromemission and a green belt and a circlerailway mark the border to thecountryside.


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Functional zoning toresidential zoning bydensity and house type

The sorting out of the city intoseparate functions - industrial,commercial and residential was anatural reaction to the squalor of Victorian cities. The concept of zoningis entrenched in Malaysia’s laws onland and planning.

However, town planning practice hasgone on to segregate high densityhousing from medium density fromlow density housing. This logic hastaken on a life of its own – there issomething that compels 22'X 70'double storey terrace houses to beseparated from 20'X 65' terrace

houses.Functional zoning has evolved intozoning by house types.

Planners seem oblivious to fact thatthis was in practice segregating societyby wealth. After apportioning the landfor the upper and middle classes, theworst bit of land left over would begiven over to low-cost housing. Lowcost housing has acquired a stigma inurban areas - low cost houses for lowclass people.


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Left over space for lowcost housing

Low cost housing not only lose money,they also depress the value of properties adjacent to them, so

developers chose the worst portion of their land for them - bits of land thatmight need more piles and moreexpensive infrastructure, or low lyingland right next to the oxidation pondthat need extensive earthworks. Theseextra costs become a burden on thebudget for the construction of theactual homes.The low cost areas are also oftenisolated from other types of housing.So they generally end up being adistance from social amenities -schools, nursey, kindergarten andshops. Isolated, the low cost housing

area offers few employmentopportunities.Placed in a far corner of a housing project, they also lack accessto cheap transportation. And transportcan eat up a substantial part of thepoor man's income

.10/12/2009 Affordable Mosaic Housing:Re-thinking low –cost housing

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However, the worst aspect of low-costhousing projects is the very idea of lowcost housing areas: that poor peopleare concentration in one location.Healthy communities comprise a mixof the rich, the poor and the in-between. Indeed traditionalcommunities like kampungs are notmade up exclusively of rich or poorpeople.

In the Mosaic Housing model there isan attempt to avoid segregation byincome categories. There is acombination of house types thatallows a semi-detached house to bebuilt next to the equivalent of aterrace house, which would also bewalking distance away from atownhouse or a flat. In this model, asmall percentage of low-incomehouseholds would be integrated into ahealthy mixed-income community.In this way it is possible to avoidhaving low-cost houses concentratedin an isolated, unattractive section of a

housing development.


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The Mosaic Layout



A rectilinear cluster layout



Small and Big Courtyards





















Apartment SquareMetres

SquareFeet

3 Bedroom Unit atTypical Floor

65.10 700.7

1 Bedroom Unit atGround Floor

39.32 423.2

1 Bedroom Unit atGround Floor

25.78 277.5



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Affordable Mosaic Housing Cebs v1