IN POD WE TRUST
Pre-fab housing is being heralded as a fresh answer to getting more Kiwis into their own homes
Ahna Brownlee is busy. Really busy. The Podlife business director says the transportable housing company has been ‘‘flat out’’ since launching five years ago. Manufacturing everything from tiny homes and granny flats, to baches and container homes, at their Whakatane site, Brownlee says they’re working on five pods a week, and finish about five in a month.
While the average house price is $800,000, building isn’t much cheaper. The average cost of a build in 2020 was $434,790 in Wellington, $451,910 in Auckland, and $392,801 in Canterbury. The most expensive place to build was Otago, at $547,672, with an average cost of $2659 per metre.
Some estimates suggest factory-line prefabricated home assembly can shave 15 per cent off construction costs. Podlife’s entry-level price point sees 10sqm - 15sqm pods starting from $18,000. Designs can be customised to include an extra room, or verandah. A 5sqm single pod goes for $11,000, with kitchen and en-suite added for $12,000, or a 10sqm deck for $2500. Manufacturing can take anywhere from days up to six weeks.
‘‘People who have children or are starting out and can’t get into the market, this is a great way to start,’’ Brownlee says. ‘‘Mums and dads are saying, ‘this is how we’ll get you into the market’ and putting a pod in their backyard for their children. For a lot of people, obviously, the huge thing is the budget. The beauty of the pod is, we know exactly what it’s going to cost.’’
But, says, Brownlee, some will be put off by the added logistical layers that pre-fab companies can’t negotiate for them. Although transportable companies will often handle building consent, buyers first have to find suitable land – also scarce. Brownlee has fielded phone calls from desperate buyers about land packages. They also have to battle council red tape to obtain resource consent, and secure a loan from banks often unwilling to loan on pre-fab builds.
‘‘If you haven’t got the land you might as well kiss it all goodbye,’’ says retired senior lecturer, Dr Allison Oosterman. With three family members, Oosterman bought a million-dollar 4ha site in West Auckland’s Oratia, planning to add a main dwelling and a minor dwelling (the latter for Oosterman). They’ve yet to choose a manufacturer but so far the process of just preparing land hasn’t been simple.
In the Waitakere foothills, resource consent from Auckland Council isn’t straightforward. They need to plan for flooding, and incorporate a swamp garden. Their homes must not be within 10m of the boundary, the minor dwelling has to be within 50m from the main house, and if all those rules run their options short they might have to build a bridge over the property’s stream, to the tune of $300,000.
‘‘Honestly it’s unbelievable,’’ says Oosterman. ‘‘It’s been a bit of a headache really. [Manufacturers] can build a house in eight weeks but nevertheless it’s four months to get consents and plans done.’’
For ‘‘risk-taker’’ Oosterman, 73, who anticipates some cash from the future sale of her Te Atatu South home, the tricky path will be worth it to her, and she’s got the time to plan. The pre-fab housing businesses she’s investigated have modern, interesting designs, compared to the ‘‘traditional, dull designs that haven’t been upgraded’’. But she can see why the logistics – and the cost of those logistics – could be off-putting to people just trying to get into the market.
Much of New Zealand’s first housing was pre-fabricated – built in Australia or the UK and assembled on-site. Although kitset housing, tiny homes, and other transportables have become trendy, there is an enduring perception that pre-fab housing is cheap and nasty.
PreFabNZ chief executive Scott Fisher says Kiwis, including the Government and the construction industry, are tied to an outmoded way of building and with commitment from Government to support and encouragement of others to invest, off-site construction could turbo-charge New Zealand’s housing construction. In 2018 the UK pre-fab sector was given a $324m (£170) investment promise for innovation and adoption of off-site manufacturing.
‘‘A business is not going to invest $25m into off-site manufacturing for housing if there’s not a commitment there for the output from that factory,’’ he says. Some larger companies which were producing about 500 homes annually, could double or triple their output, he says. With about 50 companies in the pre-fab market, upscaling could see thousands to tens of thousands of new homse on the market every year. ‘‘Other businesses, if they knew there was certainty around Government commitment to the industry, they will quite often... invest in technology and scale up operations. The off-site sector is very healthy, it could do more, it could do it quicker.’’
Relocatable housing company Elevate, based in Cambridge, caters to the higher-end of the modular housing market – their range starts from $235,000 for a two-bedroom, 70sqm home – and produces about a dozen homes a year.
Director Lee Turner says they have few, if any, first-home customers and attributes this to land supply, nervous banks, and developers unwilling to have transportables on their subdivisions. Their price-point sees a clientele more likely to be retirees, empty nesters, or sometimes families with a good income who like their designs’ efficient use of space.
‘‘Our clients aren’t really chasing the money so much, they’re looking for ease and quality . . . (But) I think it’s something people are going to turn to more often. They’re going to look at it as an option and think, geez, look at the benefit here.’’’
Elevate project manages its builds, and organises building consent. Construction is in a controlled yard, so they minimise waste, and he says the workmanship is high because, ‘‘when you have the same tradesmen repeating the same job over and over you get a bit of practice at it’’. Although their yard is open air, they’re investigating covered options, and their speed still means they can get a roof, framing and undercladding on in a day and a half, so it becomes waterproof. Since Covid-19 has put a premium on labour and materials, Turner says the guarantee of both by signing up to them has appeal for buyers.
However, pre-fab businesses aren’t immune from labour and materials shortages. A 46-year high in house building consents in October, plus the pandemic, has put a strain on materials, including timber. Charles Innes, director of designer modular homes producer Podular, says he had trouble finding staff as the company scaled up, creating three new sites after launching in 2018. It has about 65 clients at one time.
Podular sells 13sqm sleepouts from $40,000, and larger, 2-5 bedroom options, from $240,000. Like Elevate, its price-point and design is at the higher end and their market tends to be people looking for baches or second dwellings. He thinks banks need to change their risk-averse position to help more people into the pre-fab market.
Westpac was the first bank to offer a specific mortgage for prefabricated home buyers. Its head of homeownership, Mark Dunmore, has previously said off-site manufacturing was crucial to addressing affordability and supply issues. The loan is similar to a construction loan but includes an insurance requirement during the build.
Pre-fab proponents hope that the shelving of the Resource Management Act will streamline developments and free up land, but in the meantime, people looking for lowcost living options are struggling. Dunedin solo mum of two, Cyndee Elder, has been investigating transportable housing since realising her youngest, 13, would likely be out of their Ka¯ inga Ora home in a few years, and she’d need to find something permanent, and affordable, for herself. With a tight budget of $80,000, she quickly came up against bureaucracy.
Hoping to not just find a housing solution for herself, but put together a community of tiny houses, she discovered that although it was possible to secure a section for several tiny homes, resource consent requirements stipulated there couldn’t be more than one kitchen on site, for example. She thinks land supply issues could be solved by developers, land bankers or even Ka¯ inga Ora, sitting on patches waiting for construction, to lease plots to transportable home owners. ‘‘I don’t see why there’s an issue around housing, there’re opportunities out there – but people aren’t listening.’’
Scott Fisher says now is the time for a Government-led revolution. Ka¯ inga Ora continues to investigate and use pre-fab construction companies. About 12 per cent of its housing under development uses off-site design techniques. Seven market projects are also at various development stages, ranging from terraced housing to apartment buildings.
It’s expanding its off-site manufacturing programme, and will revise its targets for that type of housing.
Fisher says Ka¯inga Ora is but a small part of the puzzle.
‘‘The old ways will not save us, and we no longer have the time to wait. The Canterbury earthquakes were a missed opportunity to turbo-charge the off-site sector. KiwiBuild failed to deliver when the off-site sector was ready ... Government now runs the risk of missing yet another opportunity – the one Covid-19 presents.’’
Minister for Building and Construction, Poto Williams, agrees offsite manufacturing played an important role in enabling fast, safe and cost-efficient buildin. Williams says changes to the Building Act would incorporate a bespoke scheme for consenting pre-fab buildings, and a certification scheme for manufacturers would let them sign off their own designs and construction.
‘‘These changes will support an increase in the use of offsite and prefab building methods, which can result in faster build times and an overall increase in efficiency.’’