The government is introducing ways to reduce the compliance costs associated with building homes. By doing this, the government can increase the supply of properties, lowering the price of houses, and thereby increasing housing affordability.
No doubt this will be an interesting policy to look over, however this is not what I am going to do right now. Instead I am interested in Professor Roy Fleetwood’s (of Victoria University’s Architecture and Design Faculty) dual claims that”the plan risked creating cardboard cut-out houses” and that “the Kiwi dream was to build your own home, but individuality was highly prized”.
This is an interesting set of claims. Dr Fleetwood is fundamentally saying that we will end up with sets of cardboard cut-out houses , even though individuals in New Zealand truly value the individuality of their house – and this is a bad thing. I assume that the reason this will occur is because of new regulation allowing builders to create 50 houses off one consent. As the article says, the cost of a consent can be up to $30,000, implying that the cost of making these 50 houses is only $30,000 if they are all the same compared to $1.5m if they are given some individuality.
However, I think that this only covers half the story. Notice that Dr Fleetwood says that New Zealanders value the individuality of their house. If New Zealanders value the individuality of the house by more than $30,000 it would be in the builders best interest to continue making individual houses for the given consent fee. If New Zealanders value individuality at less than $30,000 then the reduction in cost to the firm will exceed the customers willingness to pay for the higher quality good – surely a good thing. As a result, complaining about the sameness of the properties given the fact that people value individuality does not seem to make sense – in this regard.
Does anyone have any funky models in mind where Dr Fleetwood’s story would hold up?