Transcript Stock and flow models of housing

Stock and flow models of
housing
Ivan M Johnstone
Department of Property
The University of Auckland
Purpose of stock and flow
models
 Overlooked and often ignored benefits
 Dynamic relationship between benefits and costs
 Performance measurement of sustainability
 Flows of benefits and costs measured as a true flux
Mortality of housing stock
 Need for realistic models of mortality
 Severe data difficulties in most countries
 NZ average service life of 90 years
 Dynamic mortality – function of expansion rate
Losses
over age
interval
14000
1860 Cohort
1880 Cohort
1900 Cohort
12000
10000
8000
6000
4000
2000
0
0
20
40
60
80
100
120
Age of cohort (age interval = 5 years)
140
Forecasting replacement
housing
 Gross errors if extrapolate when dynamic mortality
 Dwelling losses can decrease as housing stock expands
 Need for dynamic housing stock model to forecast
Maximum justified expenditure
on full refurbishment
 Refurbishment extends service life of dwellings
 Alternative source of additional housing
 Low discount rates facilitate full refurbishment
Maximum
cost ratio
1.2
1.0
0.8
0.6
Discount rate = 0%
0.4
Discount rate = 3%
0.2
Discount rate = 6%
Discount rate = 12%
0.0
0
20
40
60
80
100
Age at complete refurbishment (years)
120
Energy and mass flow of
housing stock
 Macdiarmid (1978) 2.6 GJ/sq m
 Baird & Aun (1983) 3.6 GJ/sq m
 Johnstone (2001) 2.75 GJ/sq m
 10,000 MJ to sustain one year of dwelling services
 17.4% of above required to sustain growth
Potential reductions in national
costs due to refurbishment
 Past and current savings of 15%
 Potential reductions of 5%
 Inconsequential reductions if high expansion rate
 Need for balanced combination of benefits and costs
Benefit-cost ratio performance
of housing
 Current maximum benefit-cost ratio of 26.7 sye/cu
 Increase of 32.4% for stationary housing stock
Benefit-cost ratio
(dwelling service years per construction unit)
40.0
35.0
30.0
25.0
20.0
15.0
Expansion rate = 0%
10.0
5.0
Expansion rate = 1.5%
0.0
30
50
70
90
110
130
Service life span (years)
150
170
Future research
 Impact of using current land use succession criteria
 Impact of current taxation schedules
 Quantification of economic depreciation of services
 Update of 1978 National Housing Commission study