High prices prevent people belonging to the middle- and median-income group from acquiring homes that compel them to move away from the cities to the fringes or live on rent for sustenance while losing out on job opportunities. Expensive rents and the pandemic have worsened the housing scenario and posed more workforce problems, observes Maxwell Drever.
Since housing is critical for everyone, those who cannot afford high rent in cities are ready to move to remote corners for sustenance while giving up on job opportunities. The move affects the nation’s economy as employment takes a hit too. The crisis of affordable workforce housing is now a full-blown crisis, but Maxwell knows very well how to tackle the problem and increase the accessibility to affordable workforce housing.
The Covid19 pandemic has dealt a heavy blow to the hospitality industry, which was already in bad shape, and the pandemic made things worse for hotels that face questions about its survival. Despite some economic recovery due to the resumption of activities by relaxing the Covid curbs, hotels see little hope about staying afloat in the coming days. The wait for 2-3 years for recovering losses is not feasible for many hotels. These distressed properties are now up for sale for conversion into multifamily homes to boost workforce housing.
Since hotels are homes already and have all the features for decent living, their conversion into multifamily units is easier, speedier, and cheaper than constructing new homes. Since the buildings are already compliant with the building rules, completing the conversion projects is much less. However, choosing the right property for conversion holds the key to success, feels Maxwell Drever
The conversion of hotels benefits the workforce as the supply improves considerably, and the lower cost of conversion makes these properties quite affordable. Still, it also benefits investors who can generate a steady stream of income for many years.
Lowering the construction cost is one of the ways of making workforce housing more affordable. By switching over to modular construction techniques that consist of building the critical building structures off-site and assembling them at the site, it is possible to reduce the construction cost by 10% to 15%. Assistance is necessary from the local bodies that need to look into land use codes and new rules for property inspections and approvals. Eliminating parking can help to reduce costs further but is more applicable for private-public partnership projects. The local municipality must offer land at cheaper rates than the market, even by offering land on a long lease. The lower land cost and modular construction can positively impact the delivery deadlines and total capital cost.
As vacant properties are available across communities in metropolitan areas, identifying these should not be a problem. The concerted effort of all agencies can help to find a time bound solution to the housing crisis.