Affordable Housing !?!
I understand that this is a highly redundant topic and dicussing it is like beating a dead horse. However, it is extremely important and it needs to be discussed, highlighted, and addressed in some way, shape or form. Yes all, I'm sorry to report that the dead horse I am referring to is "Housing" I just cannot rap my head around the fact that a country with one of the highest GDPs in the "WORLD" has such a problem. It has been mentioned over and over again that available land is the problem. Contrary to popular belief, the scarcity of land is relevant only as a means of discussing one of the reasons for the high price of it. There is little, but ample room to build as contradictory as that may sound. The island is small, but it does however offer opportunities to build on occation.
On to a more pressing point, the important thing here is that the reasons behind the high cost of housing are highlighted and accurate. There are multiple reasons for the crunch depending on what side of the fence you reside on. Buyer? Seller? Hopeless bystander without an opinion? Foreign economist with an "impartial view"? (haha...) Some of the reasons thrown around are 1) greed by sellers, 2) high cost of construction (greed by private construction), 3) basic principles of supply and demand (land is a hot commodity) #3 speaks to the basis of economics which is grounded in greed. Capitalism... only the strong survive...one rule only; make money at all cost. (In this case, money$$$ at the high cost of sustainability) Anyone else see some redundance here? "Greed" "Greed" "Greed". We need to unite as a people and find a solution to this problem and it will require cooperation and sacrifice by everyone, big business included. Now, I am not as idealistic or naive as to think that companies will react in direct opposite of what they function to do which is "make money for shareholders" However, I am idealistic enough to believe that we can all cooperate for the betterment of OURSELVES if not for others. This problem is not marginalized to poorer people or to certain income holders, although they are the first to be affected by it. It will eventually trigger a ripple effect and everyone will be in face to face contact with this problem. How will we face this problem? How will Bermuda address a "national issue" such as this one?
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Building Methods
JMW,
Housing is probably going to be to single largest issue facing Bermuda from here until....While the price of real property is driven by supply and demand, which is a part of capitalism, some of this can be offset by the government of the day taking on a more socialist role by using public funds to purchase property today, holding it in inventory and building homes on this property for sale to first time home buyers at absolute cost. This concept could also see the creation of a quango, maybe, the Bermuda Mortgage Corporation, which is used to in addtion to banks to allow for mortgages at interest rates below market, not below prime but below the rates offered by local banks which are private entities.
Included in this picture is lower cost construction methods, for example, the method used to construct the home of Dr. Brown, a shot-crete type product. Although it may have taken longer because it was a first build this method can cut built time significantly. For example, I know of a real life example where this method was used and on a two story, 2,200 sq. ft. and the structure, including the roof was completed in less than 14 weeks with only 3 men on site, excluding the plumbers annd electricians. Then their is another method, similar to a house that I saw being built on McGall's Hill the last time I was home, that has a real life example of a 3,000+ sq. ft. two story four-plex that at 28 days had the entire structure full enclosed.
These method are generally less expensive that concrete block and as they can be built faster the labour cost is reduced, which means a lower overall cost of construction.
Do you think you can build
Do you think you can build houses less expensively?
If so, then please do.
The real reason that greed is not sustainable (ie. if someone gets greedy and tries to make too much money) is that when that happens other people enter the market (competition) and lower prices. Since construction prices aren't falling we can either conclude A) It's not really possible to build less expensively under the current rules, or B) It's not possible for new people to get into the industry. Given the number of startup construction firms it's clear that B is not the case (although the truck ban will make it harder to get into the industry and thus raise construction prices).
The only exception to that is Government. When government is greedy or wasteful then it can continue to do it forever because there is no market competition to put it out of business.
De Onion
www.newonion.com
I do believe building cost can be reduced
DeOnion,
In my opinion, building less expensively in Bermuda is determined by two things:
(1) The acceptance of non-traditional (i.e. concrete block) building methods
(2) The willingness of contractors to open their minds and accept that these building methods will reduce their total profits (not necessarily margin) per job, however, they can complete more jobs per year, which could increase their overall profits.
I can give and have been trying to give access to these construction methods to persons in Bermuda via my contacts with manufacturers and suppliers of these products, which is all I can do. Obviously similar products are being used in Bermuda as I have pointed out so some persons are already aware of these types of products, much of it will take wider acceptance and must be pushed from the client end. This means clients need to become more educated on what alternatives are available and demand that these be used.
If the materials for these methods cost some 30% less than traditional materials and the construction time is shorter, the total cost of construction SHOULD be lower. However, the contractor and the pricing that the market can absorb determine profit and that is capitalism at work, some people call it greed.
The client can further save by taking more responsibility in the build, for example, the client may want to purchase materials himself and have the contractor provide a labour only quote. I do not know how many people in Bermuda have used this method to build their homes but it is used quite a bit here in the Bahamas and by doing this the price per square foot can be reduced significantly but there is more time that the client needs to put into the job.
In addition, there were times in Bermuda where people built their homes themselves with the help of friends. I think Bermuda’s economic success has reduced the occurrence of this and more people are able to afford to pay financing costs and money for financing is more readily available. This is one of the prices of success; you hire someone else to do things for you rather than do it yourself, maybe because you don’t have the time to do it due to your own work demands.
Non-traditional methods do
Sadly, it's not so simple - and your opinion does not reflect the reality of real estate development (housing production).
Non-traditional methods do come at a cost - they do not last nearly as long as concrete block in most cases. This is especially true of the less-expensive building methods that we could use if we accepted the Miami-Dade County construction standard.
Contractors have open minds, I assure you - there are a number of people who have over the years tried non-traditional construction but in virtually every case have found that buyers demand a huge discount - and even in the best case with the current cost structure (high land costs, long planning delays, expensive financing, etc.) the actual discount offered by lower construction costs is on the order of 10%, while buyers viewing houses as inter-generational assets have demanded much larger than 10% discounts for houses built out of anything other than concrete block or Bermuda stone.
Not only that, but there are a number of people who are building their own homes/acting as general contractor and even so it is still impossible to build in Bermuda for a "reasonable" price. I assure you, every person capable of doing this and making money already is doing it.
I assure you that the only contractors making excessive profits in Bermuda are the ones that deal with people unwilling to shop around, or who work for the government after questionable bidding processes.
Don't last as long?
DeOnion,
The products I am talking about are shot-crete products, where 4 or 6 inch expanded polystyrene (EPS) is wrapped in 1,200 psi steel and concrete is shot onto it to create walls, floors and roofs and the other is insulated concrete forms (ICF), where blocks are made using EPS, they are reinforced and lined with rebar and than concrete is pour in the void space, meaning that the walls are solid reinforced concrete. I wonder how you can say that these methods do not last as long as concrete block when these products have been around for more than 30 years and show less maintenance requirements than concrete block which means less deterioration.
In addition structures built in these methods are much more energy efficient. Case in point the 2,200 sq. ft. two storey building (constructed using the shot crete method) I mentioned early will only require one 2 ton air condition unit and this includes cooling the attic space. Compare this to concrete block, the same building would require maybe a 6 or 7 ton unit. As I am not an a/c guy my numbers for the concrete block structure could be off but I think you get my point.
Going back to building costs, what I can say is that these methods do not require the same level of skilled workers (masons for example) as concrete block and because the same material can be used for the roof there is no need for carpenters. Therefore, the downside of these products is that they can displace skilled crews, which could actually create further problems, social and economic.
ICF is often more expensive
ICF is often more expensive per square foot than concrete block to build. Not only that, but R-value (insulation) is not significantly better than concrete block - and last time I did the math it did not justify the additional cost. There's also the issue that when people see Styrofoam insulation they discount the building even if it is solid concrete inside - so it's both more expensive and harder to sell for the developer.
The methods that are cheaper than block tend not to last as long, there is no free lunch in building methods.
From a labour point of view we will export all our unemployment (foreign masons will go home, Bermudian ones will be able to find work) if we are able to use lower-skill prefabricated panel or steel stud construction, because there is always a need for wet trades for tanks and foundations (among other structures)... so there's really no loss to the low end of the labour market if we lower the needs for skilled trades (blocklayers).
ICF
DeOnion,
ICF is a more expensive option on a materials basis but the biggest cost in construction is labour. As I mentioned in my first post, an ICF building, real life example, of 3,000+ sq. ft. and two stories had the roof on and all windows and doors installed in 28 days. You cannot do that with concrete block.
However, the shot crete product as proven to be about 30% cheaper for material and the real life example, 2,200 sq. ft. two story, was closed in an ready for finish work in 14 weeks and this was with hiccups due to a crew who had never used the product before.
As far as r-value, concrete block has virtually no r-value where ICF blocks range from R-18 to R-35, so I do not know how you can say the r-value difference is not significant. Try standing in an ICF or shot crete house when the temp outside is in the 90's, you can feel the difference without a/c being on.
Additionally, there is the 2 x 4 test
As far as people seeing styrofoam, it comes down to education, for example as I am sure you are aware that the longer concrete remains within forms the more it cures annd the stronger it gets. In an ICF structure the concrete remains in forms which means the building gets stronger and stronger.
I would welcome further discussion with you on this and pass on some information that I have on the products I have access to (my email address is guilden_gilbert@yahoo.com). I look forward to hearing from you.
Without going into my
Without going into my background, I am familiar with the economics of virtually every major brand of ICF and with a few local ICF projects... and I think it's unlikely that you have access to any ICF products I haven't seen.
It is a superior product to traditional concrete block or stone in many respects - but simply does not offer a compelling solution to help people who can't afford housing.
Okaaaaaay
DeOnion,
Are we (you and me) talking about those who can't afford housing or are we talking about ways to reduce the cost of construction? Based on our discussion I think we have been talking about the latter.
Unfortunately, outside of Government provided accommodation, those in Bermuda who cannot afford housing cannot be helped by any construction method because while there may be cost savings there are no alternative building methods that can reduce the cost of construction in Bermuda by more than about 30% and still offer enough structural integrity to be viable in Bermuda.
You and I have been back and forth on the merits or lack thereof of ICF and similar products but seeing as you seem to have an engineering type background are you able to offer insight to products that could be used to actually provide affordable housing? To be clear, in my view, affordable housing is maybe being able to build 1,000 to 1,200 sq. ft. strutures at a cost of around $100 to $150 per sq. ft. (maybe as high as $175). From the research I have done there are no products that I have come across that could accomplish this in the Bermuda market.
people shouldn't have to live in tents
I'm disappointed that this topic hasn't attracted as much attention as say, political attack posts. There's been an informative discussion on construction methods on which I knew nothing of before (much appreciated, guys), but nothing else at all. Surely this pressing issue warrants attention? Certainly we as a nation should be concerned about people spending over half their wages on housing and therefore saving next to nothing?
How about government providing incentives to those city property developers for including low rent residential components in their enormous office blocks (or making it mandatory a la Southark - don't have link at moment)?
We should be able to come up with some workable solutions.