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How to solve the housing crisis

The housing crisis is a topic we have been hearing about for a long time, and it seems to get worse every year. With ever-increasing urbanization, that is, the tendency to move away from the countryside into cities supplying housing for these growing numbers becomes a bigger problem for private and public organizations. It is expected that by 2050 almost 70% of the entire global population will live in cities, so we just have to find a solution for the housing crisis, but for now, the crisis remains…

As of today, more than 54% of the world population lives in cities, independently if the country is developed or undeveloped. If we compare this to the 1950s, this means an increase of 30%. As for 2050, urbanization is expected to add an additional 2.5 billion people. This tendency strongly increases the demand for jobs in cities, as well as the demand for housing. As students in Amsterdam, we know exactly how such a housing shortage feels like, and there are many cities around the globe in which this problem is much bigger. This high demand leads housing prices to skyrocket, making it almost impossible for the majority to be able to afford an apartment or house near their place of work.

The question that one might ask oneself now is: why don’t we just build more houses? Simply put, we do. However, due to the increasing prices and the ever-growing trend to rent houses for tourists through websites such as Airbnb, many houses remain empty if they are not being rented out for visitors.

Nevertheless, assuming that this would not be the case many cities would still not be able to provide enough housing, simply because we cannot build houses on the rate that meets the current demand. Dublin, for example, would have to build 25.000 units every year to meet its demand, which is just not feasible to achieve. The government has tried to respond to this problem by banning house prices to increase even more, but it hasn’t had any real success in doing so. The only real solution to this problem is to increase the supply, and even though I just said that demand is too high, there are still some options to make housing more efficient. That means, building more houses while minimizing costs.

One important factor for efficiency is the optimum height of buildings. I have heard many people talking at our university why we cannot just build higher buildings to be able to provide more houses, but higher buildings also lead to higher prices. This is mainly due to ever-increasing costs the higher one builds. Water suppliers, lift systems, fire prevention measures, and many more things become more and more expensive in accordance with the height of the building. This leads to a U-curve that represents the costs that are associated with the height of a building. The graph below shows this curve on the example of the Kingdom Tower in Jeddah (Saudi Arabia). As we can derive from the graph, we know that the optimum height of the tower lies between 50 and 80 floors.

Obviously, this graph changes dramatically depending on the country and city one is interested in. In the case of the Netherlands, the optimum height of buildings is around 8 floors. As such, only in places with incredibly high housing demand such as New York, Paris, Tokyo, etc. are skyscrapers actually profitable. Even though we might think Amsterdam is expensive to live in, it doesn’t even come close to the prices that are currently being asked for in Manhattan, to give an example.

Another factor we have to discuss is how we can minimize the building costs. By doing this, the net to gross ratio becomes very important. Simply put this ratio tells us how much space we can use, compared to the total space of a single floor. The higher the ratio, the less space we can use. As such, we want this ratio to be as small as possible. The reason why this ratio varies is that different shapes require different forms of “cores” that ensure the stability of the building. The underlying rule is: the simpler the shape, the more space available. As such, a square is the most efficient shape a skyscraper can have, with a ratio of 1.14, despite the fact that it might not look as cool as others. This is also the reason why 432 Park Avenue, one of the most expensive skyscrapers exclusively built to live in, also has this shape. If you want to know more about the building, click here.

Now let’s talk about the construction technique, one of the most determining cost factors. Traditionally, towers are being built by using a repeating floor design, which is very labour intensive and slow and is additionally depending on the current weather condition when constructing. To reduce these costs, offsite construction and prefabrication have become throughout the last year an increasingly appealing option to save costs. Not just because the parts can be built faster and more precisely, it can often reduce common delays during the construction process. It also reduces the amount of highly skilled workers, which means that this technique is able to significantly reduce the most expensive cost when building a skyscraper – highly skilled workers. To see how far this can go, let us take the example of a company called Broad Sustainable Building that is located in China, which managed to build a 30-storey building in just 15 days, with a cost per square meter of just $1000. This technique makes building a skyscraper comparable to building a very big Lego house.

To conclude

Despite all this, governments and societies have to let go of past ideals. We cannot continue banning the construction of skyscrapers in cities like Dublin or limiting the height of a building to just 3 floors in San Francisco, one of the most demanded places for housing in the world, considering the ever-growing trend to move to urban areas. If we want to provide sustainable living in the future, many more things apart from engineering problems have to be changed. This is a problem that affects us all, and such, we should all try to find a solution.


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