Stock and flow models of housing

1. Stock and flow models of housing Ivan M Johnstone Department of Property The University of Auckland

2. 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

3. 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

5. 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

6. Maximum justified expenditure on full refurbishment • Refurbishment extends service life of dwellings • Alternative source of additional housing • Low discount rates facilitate full refurbishment

8. 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

9. 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

10. Benefit-cost ratio performance of housing • Current maximum benefit-cost ratio of 26.7 sye/cu • Increase of 32.4% for stationary housing stock

12. 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