Mike DiGirolamo (narration): In a time when it seems like humans can agree on so very little, I think we can all agree that housing is pretty essential. You need a roof over your head. But in a world with increasing climate shocks, skyrocketing rents and home prices, how we build homes and reuse the materials is going to be a crucial part of adapting to environmental challenges, using resources sustainably and making sure people can actually afford these houses. It sounds like a lot to accomplish all these things in one go. But my guest today argues that’s precisely how it must be done.

Louise Dorignon: I guess our goal was to find out how implementing a circular economy approach can lead to a more sustainable housing system. And we didn’t want to juxtapose sustainability and circular economy as two different things. But instead, we wanted to see how they work together and so not just create two different silos, but see how a circular economy can help creating sustainable housing. So, housing that is comfortable, safe, healthy and also has minimal environmental impacts.

Mike: That’s Louise Dorignon. A post-doctoral research fellow at the center for urban research at RMIT university in Melbourne. In this episode, she outlines a detailed plan on housing circularity that draws upon successful case studies across the globe. And applies them to one of the most expensive and least qualitative housing markets in the world. I’m speaking of course of Australia. I’m Mike DiGirolamo. And this is Mongabay Explores. A podcast series diving deep. Into some of the biggest environmental issues of our time and the people working to solve them. You’re listening to the third episode of our fifth season. Mongabay explores the circular economy. Hi, Louise. Thank you for speaking with me today.

Louise: Hi, Mike. Thanks for having me.

Mike: So in the piece that you wrote you say that the Australian Housing and Urban Research Institute, A H U R I has a comprehensive strategy to address the crises of housing affordability. , availability and the social justice aspects of them and the climate crisis at the same time. So, before we get into the details of that, what is the high-level overview of this strategy?

Louise: Great question. Thanks, Mike. I just want to acknowledge the co-authors of this report, which, was funded by AHURI. Professor Rob Horn, who was the inquiry lead for this Project and also adjunct Professor Julie Lawson, who I worked with very closely on this work. And as you probably know, Mike, we are in a current climate emergency with increasing climatic events in Australia, such as bushfires and flooding. And at the same time, we have a housing affordability crisis and we have a long-term housing shortages, especially for social and affordable housing. So, we have these two related but distinct Crisis to address and sort of secular economy can be a useful lens to address these two Christ at the same time. And we also know that the built environment significantly contributes to carbon emissions. So about 35 percent of global emissions come from our built environment. And I guess the immediate connection is that prolonging the life of materials and also buildings and reusing materials and buildings for longer significantly reduce carbon emissions. When we talk about decarbonization. Embodied carbon. That’s what we’re talking about. We’re talking about the carbon that is produced when we build when we manufacture when we construct housing So I guess our goal was to find out how implementing a circular economy approach can lead to a more sustainable housing system. And we didn’t want to juxtapose sustainability and circular economy as two different things. But instead, we wanted to see how they work together and so not just create two different silos, but see how a circular economy can help creating sustainable housing. So, housing that is comfortable, safe, healthy and also has minimal environmental impacts. And also, we need to help industry to shift practices to achieve that. It’s a huge effort to accomplish in order to address these challenges. So, I guess for a high-level overview of the strategy, which is the question you asked about, I’d say three main components. The first one is that the strategy has to be holistic. So, it has to address all of the different processes in the housing ecosystem. So, from extraction of materials or reusing of already used materials to the production, consumption and end of life of housing. It’s really important to think about what we do with, a building when it’s reached its end of life, and at the moment there’s not enough focus on that. We also need to think about the social aspects of housing. And so not so much just thinking about materials and the materiality and if you’d like, the physical properties of our home but also keep this sustainability approach where you think about equity and so building housing, which has adaptive qualities so it can adapt to different age, you know, aging in place. And that piece about, intergenerational equity and also housing that emphasize local employment opportunities. So local employment, And I’m thinking about those sort of 15 minute city kind of opportunities. The second aspects of the strategy should be that it addresses the different segments of the housing industry. When you look at Australian housing, we don’t build single homes and apartment higher as apartments the same way. So, the housing. system actually comprises very, very different segments which rely on very different supply chains. So that’s how we structured the research through four different research pieces, which addressed first of all, neighborhoods and precincts. And second of all apartments and the third was on social housing retrofit and how we address and renovate the current stock of existing apartments, but also, I guess social housing units. And the fourth was on supply chains for materials. And so, with this approach through the different segments of the housing system. You cover all the different segments rather than considering housing a one block, which would not be very helpful. And then the third component is all about the collaboration that is involved to implement a strategy. This project has to be a national project. So, in the case of Australia has to be at the federal level, but of course it has to involve all the different tiers of government and sort of go across all the sectors. So, from, material manufacturers to developers, to people who actually build and sell homes. And it has to be a collaboration across institutions. So, it has to involve academia, but also local governments planning regulators and builders, developers. Civil society. So, the private sector as well and of course, training Institute for all the people who need to develop the skills required to make this transition. One thing that we did recommend in our report was to set up a Commonwealth task force to sort of address and orchestrate all of these efforts that are necessary to regulate and to create all of the new standards, and regulation that is necessary.

Mike: I’m really excited to dig into all of that and that context, while very Australia specific, it sounds like there’s a lot of lessons here. That possibly could be applicable to other nations as well. With that said, you did mention in the in your article that countries in Asia and Europe are implementing sustainable housing strategies that Australia could learn from and help, the country lift its game. So, what are some of those lessons that Australia could be learning from places in Asia and Europe?

Louise: So. It is important, as I said, to develop a strategy specific to Australia. But having said that, as you say, it’s good to look elsewhere to learn from things that have worked. So, success, successful implementation, successful examples, and also to look at things that, you know, haven’t worked so well. So, you can learn from failure as well. But in that instance, I’ll focus on I guess, best practice examples or things in elsewhere that have worked really well. So, if we look at Asian countries, to start with I’m thinking of Singapore where there’s a, a really important history of public housing through the housing and development board. And this board has achieved great residential outcomes for apartments in particular. Through maximizing, limited space on the island and also developing very sustainable urban development. So, these buildings have solar panels. They’ve got rainwater harvesting systems. They’ve got vertical gardens. So, a really great example of space, but really enhanced quality of life for public housing residents. So that’s a good example for, I guess, a nation that has a long-term history of public housing. And that’s also very sustainable. If we look at another example in, in Asia would be Japan and Japan gets discussed a lot for its emphasis on resilience, of course, in this country that is, you know, subject to earthquakes. They also have a lot of history to do with R and D, which was built in the history of Japan in support of manufacturer housing. So, Japan developed manufacturer housing very early on through a lot of R and D put in these companies to try and be and develop, I guess, a really productive housing industry. Through manufactured housing. So that’s applicable to Australia who’s trying to develop, you know, it’s manufacturing capabilities for housing. And of course, Japan has, you know, extremely resistant construction techniques but I won’t go into that cause that’s not really my area. But if we turn to Europe now, I’m guessing you’re also keen to hear about European examples. Of course, from Germany, we’ve got the passive house model, which has been successfully exported in, you know, lots of different countries. Now, it’s a standard that gets used a lot, especially in Australia, where it’s growing popularity, even though it is, it is an expensive certification, to achieve. But I guess the goal would be to integrate sort of passive house standards into our national construction code. So passive house is all about the house consuming very low energy for heating and cooling. And so, basically, you know, requiring very little carbon emissions to heat or cool. And also, you know, through high quality insulation very airtight construction and that sort of thing. So that’s one model that has been successfully exported and that we can learn more from. Other examples include I’d say. In Scandinavia, countries like Sweden, Denmark have been really successful at developing innovative use of timber. And so, things like cross laminated timber is a type of material that gets used a lot, which has potential for lowering our carbon footprint. then perhaps a less discussed example, which we discussed in the report is something to do with waste and sort of, managing and collecting data on our, on waste in cities. And so that was out of Milan in Italy, and I was called the environmental counter. So that’s something that we could also develop more in Australia in terms of construction and demolition waste. We need really more accurate reporting on the waste that gets produced from the construction housing system. So, I guess there’s a range of different, you know, lessons that Australia can learn from even though you know, there are some things that Australia is doing well, but. I guess the main perhaps lesson would be to look at examples of policies that Australia could perhaps develop and things like you see in Europe like tax incentives and subsidies and grants to really, I guess push and lift sustainability as a, as a practice. For example, in France and Belgium, they are a lot of financial support offered for energy renovations, something that we’d like to see in Australia. And France has also this strong sort of national regulatory tradition and more recently had come up with an energy and climate act with mandatory audits for buildings. So, there’s a lot of policies isn’t and also stronger, I guess. Regulation you can put in place to help because demand is not enough to, you know, relying on demand and consumer demand, especially in housing is not enough to achieve change.

Mike: That is really interesting. And all those examples you just listed, certainly I will try and find ways to link those in the show notes. So, with all that said, I want to take a look at the four pronged reform process that you have laid out. And so, the first part looks at reappraising value which is a really interesting concept. So, what does that entail?

Louise: We called it reappraising value because it’s all about shifting priorities in both planning and building to elevate and have secret economy as a key priority. And so, I guess it’s the first pillar of our framework because it is a cultural shift before all that has to happen. And so, mechanisms to, I guess, reappraise value in that context would be, for example, having demonstrated projects to showcase space practice and sustainability and showcase what is possible. And I guess create set an example in industry that others want to follow. So that peer pressure can be really powerful to implement change, but also it can be a little stronger in terms of, for example, fostering new professional norms and new training requirements. And that can, that can really shift leadership in industry and I guess lift that secular economy imperative through that renewed professional development. Effort. And there was another interesting recommendation that came out of the apartment project, which was led by Professor Hazel. It’s East Hope at University at UNSW. And that relates to that reappraising value piece. And that was to incorporate sustainability into property valuation. So that’s to directly correlate the value of an apartment with, you know, its sustainability I guess performance. And so, we could look at, you know, the European way of mandatory disclosure for environmental performance and, and have that for apartment buildings and for listings, for example. So, when you look for to rent or to buy an apartment or a home. You would immediately see the performance the energy rating of that place and also potentially it’s embodied carbon emission as well. So that’s something that can really help shifting, I guess, behaviors and, and perceptions in the forefront by, you know, both sort of soft, soft power and also stronger regulations around transparency and for the performance of our homes,

Mike: So potentially could this, let’s say you go to buy a home or you go to rent a home, could it be that you, you see all the sustainability metrics of this home, but it incentivizes, the owner or the landlord to actually incorporate the sustainability practices and it values those higher than properties that don’t have them.

Louise: Yes, potentially that’s a great insight. I think what it would do is that if you had a rental home that is not in good condition, that is not performing well, that is not you know, for example, you mentioned your apartment gets. Very cold in the, in the winter and very hot in the summer

Mike (narration): You’ll soon learn this was the previous apartment I lived in. But in winter here, when it gets down to six degrees Celsius at night, that’s 43 degrees Fahrenheit, it’s that temperature inside the house due to the poor insulation in many of the homes, which fail world health organization standards. In fact, 80% of Australia’s housing stock fails that test, according to a recent study. So, I’m not alone. In a chat I had with a man who moved here from Switzerland. He told me the biggest shock to him moving to Sydney was how cold his house gets in the winter.  And he’s not exaggerating every year, 10,000 people in Australia die from the cold, according to the healthy homes for renters campaign. Which is higher than Sweden.

Louise: If, if prospective people, you know, wanting to rent this apartment, we’re seeing that they wouldn’t really be interested in that property. So, I think it would push landlords to make to renovate and to improve the performance energy performance or else of the, of their property investments. Of the investment property. Sorry. So, I think that would overall push landlords to, I guess, improve the quality of the homes they’re trying to let. And so overall the stock would be in better condition because currently the, the stock is not very well maintained in Australia. There’s no incentive to renovate the, you know, the places that you’re renting out.

Mike: I actually had to move to another place with AC. So, I’m in a new apartment. The previous one I had, had no AC. And the owner was not interested in installing it either. And that was 900 a week. But that’s a story for another day

Mike (narration): Heat pumps, which are simple systems to replace natural gas, to heat the air and water of a home are a potential solution to this problem in Australia, that’s an upfront cost starting at around $2,000. But according to estimates, outlined in the guardian, the savings one home would get from switching from natural gas to a heat pump. Would be between 50 and 80% and then 90% when paired with solar energy. However, has Louise mentioned, there’s pretty much no incentive for landlords to do this. Even when their tenants are very clearly suffering, physically, mentally, and financially..

Mike: My next question to you is that the second part of this report looks at shaping markets. So that’s this looks at regulatory steering instruments. So, can you detail what’s going on here?

Louise: So, you often hear that regulation is key to support, you know, this type of change and change towards more sustainable practices. And it’s, it’s also what we found and what we argued for in our report. Regulation is essential to shape markets for secular economy approaches. And so, we, in our report, went through a lot of different steering instruments, I guess, and performance drivers that can help do that. And so, I can give you a few examples to illustrate a little bit what that means. And it’s all about having strategies to shift demand and also to regulate a sort of reformed market for circular economy housing. So, a first example could be to have clearer targets and standards. So, enforcing energy efficiency and sustainability standards like we mentioned but also do better in terms of monitoring and having accountability systems to really keep track of our housing stocks and how it’s performing. And all of that can be, I guess, administrated through the national construction code. Which could be expanded so its scope at the moment is Reduce, but it could be expanded to include things like materials, glazing, water usage, indoor air quality. So, expanding the scope of the NCC could be really helpful and necessary to achieve these changes. We’ve talked about the energy performance of building directive in Europe, the EP. And that had that, you know, model could be instrumental in Australia as well to, to have this, you know, transparency and the disclosure of, of environmental performance for, for housing for when you advertise a property. So, we’ve discussed that. And also, I think an important piece would be in terms of regulation would be to recognize the role of embedded carbon and to address that in the construction and demolition waste system and to put in place a system that would better support building material reuse. And of course, reuse needs strong standards and regulation because it’s not, you know, you have to be really careful when we, when you reuse building materials, you can’t you have to regulate that. It’s, you have to protect, you know, of course, consumers and not You know, have them have, you know, a piece of wood that is not, you know, fit for purpose in their housing, if they’re renovating or else.

Mike (narration): If there’s one thing Australia really loved to use in the 20th century, it’s asbestos, which is almost certainly present in one of every three Australian homes. Eradicating it and removing it is a serious business that will take a super long time to do in the meantime, making sure that it doesn’t end up in recycled materials is a really big problem. Earlier this year, Sydney had a high-profile incident where asbestos started showing up in the mulch in dozens, upon dozens of parks and school yards across the city. Including three places directly outside of my apartment. Fences were erected for months to keep people out of these areas while removal took place. This bulge also contained construction waste and building debris which is illegal as revealed in the Guardian.

Louise: So, if we’re to create a marketplace for reused goods, for example, it has to be it has to be regulated. And I guess that’s one of the limitation at the moment for the existence of such a marketplace is that it’s really difficult to test all of the products that You know, would have been reused already or used, and to certify that they can be used again.

So, at the moment, I guess that’s the, one of the barriers to implementing a circular economy, but you know, more can be done, more can be done to create a system like that,

Mike: So, the third section here is tilting investment flows. So, before I ask you any questions about that, what does that mean exactly?

Louise: I think to put it very simply, it means to get money in into more sustainable building practices and to redirect current investment flows towards, you know, circular economy housing. So, both, I guess, sticks and carrots, if you’d like at the same time, attract investments for. Sustainable housing and at the same time discourage wasteful practices. So once again, we turned to international examples and we looked at what already exists in terms of you know, these investment flows and how more money can be invested in housing that is sustainable, and we found really interesting examples out of Europe. So, sustainability bonds, for example, can be really helpful to, I guess, have more investments in into circular economy. And so, it’s interesting that the European Union taxonomy actually includes a circular economy definition. So that’s an interesting policy to look at. Then you can have things like urban design competitions and grants that can really encourage innovation and sort of sustainable solution from developers. And I think the other really important piece in that investment question is procurement policies. I think procurement has a huge role to play in terms of privatizing low carbon products and practices and also supporting those secular economy markets that we’ve talked about. So, I guess it’s all about Finding ways to build on what’s already so on investment flows that are already existing, but I guess shifting them to more to more sustainable projects, I guess.

Mike: The fourth section is building capacity, skills, knowledge, and training, which it seems like a straightforward thing, but please do explain what, that all entails.

Louise: So, in order to, I guess, reform the way we build housing and reform the building and construction industry for housing, we need to change our practices and we need to change the workforce and for that we need to reskill and to upscale in some circumstances. So, it’s a huge part of the process. And I’m glad you mentioned it because I actually believe it’s the most important part. We need a skilled workforce for this transition. And, and we also need to think about workforce productivity. Because at the moment, there’s a huge pressure on the construction industry to deliver all this housing, but currently this this industry doesn’t have the capacity to deliver housing that is required at a significant pace to, you know, answer the national cabinet’s ambition to deliver all this housing.

Mike (narration): According to recent data reported by the ABC, Australia needs 90,000 new workers to meet the goal of 1.2 million new homes. But, Hey, that’s not just an Australia problem. The United States needs 723,000 new construction workers each year to meet housing demand. Albeit that data comes from the home builders Institute.

Louise: So, we need to support the industry to create all these new jobs and to develop these skills. So, for example, I mentioned. You know, modern methods of constructions and for that we need to train the workforce to operate slightly differently. And so that that is a really important part of this, of this strategy. We discussed in the report various programs to achieve that. So, it can go through university courses and training centers, but also, I think CPD. So, compulsory. Professional development is really important. So, it’s not just about, you know, the young generation going into the construction industry. It’s also about, you know, current workforce and how we can potentially retrain them or add to their current skill set. And I think what was also highlighted in our work was All of this has to be done in a way that is fair. And so, we talked about a just transition. So, we have to understand and address the uneven industry practices and recognize that when we think about you know, building this capacity. And also, I think there’s an opportunity here when we re skill to to have a more inclusive employment strategy. So, you know, the building industries, it’s male dominated. But when you think it when you look at methods such as manufactured housing, it’s a type of work that happens in a factory. It can be a lot more inclusive in terms of, you know, levels of skills, but also gender opportunities. So, when you look at countries that have high proportion of manufactured construction, they include a lot more women because, you know, it’s in a different environment. It’s not as harsh, it’s not onsite it’s in size it’s more regulated, it’s, it’s safer. So, I think it can really afford. To be to be more inclusive in that way and also have, you know, people with different skill sets. And also perhaps, you know, for example, if you think of immigration, you can have people who Have, you know, Laura skills and because it’s a more repetitive process you can teach them differently. And then you can also have opportunities on site to do, you know, language lessons and all sorts of different programs for inclusion for social inclusion. So, I think there’s a huge opportunity here in that shift as well.

Mike: That’s all great information. And I hope this four-pronged approach that you just described, it’s going to have some social justice and equity benefits. And that’s now what we’re going to talk about. So, listeners who are listening to this podcast, most of them are not based in Australia, so we’re going to talk about some contextual things about Australia. We’re a nation of catastrophically high housing prices, pretty much everywhere. Specifically in Sydney where I live when taking incomes into account, I believe Sydney is the most expensive housing market in the world, just behind Hong Kong.

Mike (narration): According to Demographia’s report on international housing affordability, Australia is the most expensive housing market in the English-speaking world. And indeed, Sydney ranks as the second least affordable city to buy a home. This report, measured markets on a scale of affordable to impossibly unaffordable. Based on the median house price divided by the median household income. So, what does that look like? Well, it’s 3.0 or below. Now, no major city in the United States really meets that target, but Pittsburgh, Pennsylvania barely misses it. Where the median house price is 3.1 times the median household income. The United States on the whole is ranked moderately on affordable at 4.8. So, you might be wondering. What’s Australia. Well, it’s 9.7 or officially impossibly on affordable. And in the case of Sydney, it’s an eye watering, 13.3 times the median household income. Some of the most expensive cities on this list, which are well-known on affordable places, look like deals compared to Sydney, such as Honolulu, Hawaii, which is 10.5 or San Francisco, which comes in at a comparably comfortable 9.7.

Mike: So very few people. If any can afford to buy a home as a first-time home buyer. The ABC did a study on this and outlined how much you would need to afford like a mid-range home in each capital city and in Sydney. You’d need to be making 238,800 a UD per year after tax to afford a mid-range home. And this is assuming you could also put down a 20% payment. So, in a city of five plus million people. This to me does not seem sustainable or realistic in the least. So, what are your thoughts on this? How would you categorize the situation?

Louise: I wish I had a magic wand to address, to know what to do in that circumstance, because they are really complex issues. And I think in the current economic system things are pretty tight and locked up in that, in that situation. The way I would categorize it, well, I think what you’ve described is first a housing affordability crisis. So, you know, as you’ve just described median house prices that are disproportionate compared to incomes but also I think you’re describing widening socio economic inequality between you know Those who can afford a home and those who can’t and with this widening gap between property owners and others. And I think I’ve heard someone at a conference described this crisis as, there’s a theater, there’s a cinema and people are trying to get in and there’s a queue outside the cinema and it gets, the queue gets longer and longer. And, you know, once one person gets into the cinema, 10 other people, get into the queue

Mike (narration): So how many people are in that cinema? Off the cuff. It’s roughly 66% of the population of the whole country. Many of which either bought homes before prices soared or inherited it through family or in some cases bought their house because they could afford to, but that’s only one part of the story, according to data obtained by the ABC. Just 2,500 people in the entire country own 10 or more rental properties, a piece which is 33,200 or which the ABC states is equivalent to roughly the same number of dwellings in the Melbourne suburbs of Richmond and south Yarra combined. And just 170, do people own 20 or more rental properties, a piece. And they’re also the biggest beneficiaries of capital gains tax discounts and writing off their losses on their taxes under Australia’s negative gearing policy. So according to the Australian campaign organization, everybody’s home. The money from these tax handouts is in the hundreds of billions over the next 10 years. And if they were scrapped, they could be used to build half a million social homes.

Louise: So, it’s, it’s really, really, there’s a huge constraints on housing and leads to housing affordability stress because people get stuck renting for a really long time with rental prices that increase. And, I was reading this article this morning about you know, rent is describing having to move every year with a rental increase, which means that sometimes they spend a significant portion of their income, more than 30 percent on their housing costs. And I think what you’ve described also is in Australian cities. Is increased social spatial divisions and especially in Sydney, I think. I mean, I’m in Melbourne, but I know that in Sydney new developments with urban sprawl can happen really far away from services and from essential urban infrastructure and social infrastructure. So, you’ve got a situation Where families or individuals are pushed to less connected areas and therefore have reduced access to, essential services and things that are needed for their quality of life. So, I think there’s three things is how I would categorize, I guess, the issue, which is nothing new, and I think having You know, taking a circular economy approach on housing can help finding some solutions to, to address those challenges. And I think something we looked at was to diversify tenure models. So, things like cooperative housing models after the German Baugruppen can, can be, an interesting I guess, option to look at because of the involvement of the communities in planning and management of housing, you get much better outcomes in terms of having housing that actually needs the needs of residents and also it’s more affordable. Then you can also look at things like community land trust. Land is owned for a much longer time and where the land and the housing ownership uh, separated to reduce the cost. So, I think that’s another model that can be inspirational in the case of Australia. But all of these require long term planning and commitment. And that’s really hard to do when the property market is down., made of ups and downs and, and very short and fluctuation. So, there’s a really, there’s a tension here between those models that require long term commitments. And at the same time the booms and busts of the property market. And that’s a really hard tension to resolve.

Mike: Well, it sounds like to me that a lot of the incentives that you outlined in your four-pronged approach would require cultural shifts, and that includes like things where we put our money and where we invest our money as individuals. And something I heard a lot of here in Australia, and this is not a thing that’s unique to Australia necessarily, but it’s particularly pronounced here, is using housing as a speculative investment A place to live, which sort of incentivizes, smaller amounts of people buying up lots of properties to specifically just to invest and rent them out to people at exorbitant prices and kind of choking the supply. So, I’m curious to hear from you, whether you see these incentives that you outlined in your four pronged approach, whether it can shift the thinking on using housing as, a wealth building tool.

Louise: Well, I think you would need to regulate to shift really practices with, you know, reducing housing being used as a speculative investment because as long as you know, some, some people can make a lot of money out of their property investment, the investment properties, so it’s, it’s not going to really change and until we have stronger measures in place to limit that. Yes, I agree with you has, treating housing as a as an investment commodity is an issue. I think housing, you know, should be sort of first and foremost as people’s homes and where, you know, people live their lives and not as a as a, you know, an investment tool. I do think that increasing housing supply is And, and sort of freeing up the market could really help reduce, you know, affordability shortage in Australia. So, I mentioned, you know, using more innovative construction methods, such as manufactured housing to create more supply. I think that could be really helpful to increase the housing supply as well as, you know, of course tax reforms and things like rent control policies that could. That could help. And I think in that increasing the supply piece, there’s something to do with, there’s something about the missing middle typology, which you may have heard in Sydney, which is to focus on, focus our efforts on densifying our suburbs and building more mid-rise apartments that are well located.

Mike (narration): Well-located homes here mean exactly what Louise has describing homes that are located within urban areas, close to schools, hospitals, businesses, and public transit. A really big hurdle to making something like this happen more is zoning laws, particularly in the United States, which heavily restrict multi-use zoning and create minimum parking standard requirements for businesses. Or the good old-fashioned NIMBY, which stands for not in my backyard. Which can be homeowners that veto additional housing projects in their neighborhood, because it would supposedly ruin the character of the place. This in effect means that homes must be built continually in high rise situations. Just single-family buildings and increasingly ever outward from urban centers. Which means more suburbs, roads, pipes, power lines, construction, and less efficient use of space and circularity. And as we mentioned, people buying and investing in properties that are located in places that people need to live in.

Louise: So, I think you’re absolutely correct. That is a huge problem. And unless we have strong regulation and the tax reform to limit that we won’t really see any change, but the cultural aspect is important. And that can also, I guess, play in, you know, in concert with a, with a regulatory reform.

Mike: So, on that note, in terms of increasing the supply, I, this was from definitely more than a year ago, but it was the last time I checked it was reported in the Sydney Morning Herald, there was 164, 000 empty units. In the city and in Melbourne this was a more recent report that was based on water usage from actual houses, but in the entire Melbourne area, there was a hundred thousand vacant homes.

Mike (narration): Not quite a hundred thousand, 97,861.

Mike: And that seems like a lot of empty units to have in, in cities with one of the worst housing crises in the world. What do you think of this issue and what are some solutions that could address it?

Louise: Vacant homes does contribute to, to housing scarcity. And I think when you, when we’re talking about secular economy, which is all about using and reusing, I think definitely putting vacant homes back in use is very important to a secular economy program. Some cities have implemented tax for vacancy tax. So, cities like Singapore Vancouver and Paris that’s quite well known, I believe. So, you know, there’s ways to disincentivize you know, vacant homes, and that includes short term rental. So, if you have your home on Airbnb, but it’s not lived in by a permanent tenant, I guess that’s considered a vacant home. And so, it’s really important to, I believe, encourage the effective use of homes and to discourage speculation and underutilization. But I think when you look at a vacancy homes, it’s also useful to look at the opportunities in the sharing economy. So, things like collaborative group housing solutions. Can be put in place as well as modular living and adaptive spaces. So, an apartment that can be, for example, used by family. And then when the you know, kids want to move out, it’s turned into two apartments. So, there are ways to sort of maximize use. of current structures to, you know, to address these issues. And also, when you, I think there’s a lot of talk about, you know, for example commercial conversions and having structures that, so we’re not talking about vacant homes now, but we’re talking about buildings that are not in use. I think it’s really important to always ensure that the spaces that you’re going to converting to homes are going to be healthy and livable. So that’s maybe a separate and distinct part of the conversation. But definitely putting vacant homes back in use is very important in the security economy agenda. And I think that also shifts the perspective to view housing back to what you were saying as an essential social infrastructure.

Mike: So, and this is kind of a big question. It may be a little bit too simplistic, but from the work that you do and everything you’ve researched, which nation would you say is like really getting things right on housing circularity and justice? Are there any like case studies out there that are really sticking out to you?

Louise: Finland is definitely coming back a lot in, in our research and its famous for having it’s the first national secular economy roadmap. So, there was a lot of examples and policies and programs out of, out of Finland through Sitra, which is their secular economy agency.

Mike (narration): Just in case folks haven’t heard our previous episode, we actually interviewed Tim Forslund from Sitra about circularity in Finland. You can listen to that on episode two.

Louise: But then Also, you know, maybe I’m biased towards looking at France, but France has done a lot recently in terms of, of secularity and also justice. So, things like the Airy 2020 policy, which is about having goals for carbon neutrality by 2050 for new buildings. So that really Lifted the use of renewable materials in all new construction, and that’s, you know, a new piece of regulation that started so about two years ago. And then maybe another example, which is a bit of an underdog. Look, looking back at home for you would be California in the United States being the first state to mandate the reduction of embodied carbon into Update its building code. I think sometimes looking at more local jurisdiction is also helpful and not simply at, you know, national efforts. So yeah, the California was an interesting, an interesting case study to me.

Mike: That’s interesting to hear you say cause California is often thought of as the poster child of housing and equity. And having lived in San Francisco, I can attest it’s crushing.

Louise: Yes, perhaps not for justice, but at least for efforts towards embodied carbon. They’re, they’re trying.

Mike: Tis encouraging to hear. Vienna is often referred to as the most livable city in the world due to its sustainable housing policies as reported on by the guardian and renters pay a third of what someone in Paris or London is paying. So, anything there that you want to highlight? How did Vienna achieve that?

Louise: Well, I think when you go back to the history of the city after the first world war, there was a There’s been consistent investment in social housing since then. So, I think the that explains the huge proportion of housing that is actually owned by the city of Vienna and, and rented. I think they also have strong rent control policies in terms of limiting rent increases. And also, they’ve got strong tenants protection regulation. So, I think there’s really capital in their success. As I mentioned, the city actually retains and own a lot of the land that these housing developments are built on and because it controls the land cost that ensures the affordability of the housing. But then they also have this program, which I thought was really interesting when I came across it called the four pillars. Developer competition, which is a housing competition that happens every year where subsidized housing projects get evaluated by this jury. And these projects get judged on four pillars, hence the name. So, social sustainability, planning, ecology and costs. And so that leads to really pushing and increasing the social and technical standards for new housing and also reducing the cost of these housings. And we’re talking about seven to 10, 000 apartments annually that get funded through this competition. So, I thought that was an interesting program that they’ve got in VNI leading to, you know, having those demonstrators project kind of leading and excelling and leading the industry.

Mike: This is my last question for you, Louise, but if you had a magic wand and you could change one thing today policy wise or otherwise about how nations are handling housing, what would it be?

Louise: I think it’d have to be about implementing policies that really support a change towards more modernized methods of construction and so really supporting the use of manufactured housing to produce apartments in particular more quickly more efficiently, more safely for the construction workers. And at the end of the day, that our departments that would be more comfortable to live in and more affordable. So, I think those policies that are supporting things like prefabrication. Modular construction using the digital. All of this modernization piece, I think, is really important. I think that’s what I would encourage in most nations. I mean, especially in Australia,

Mike: Louise, thank you so much for speaking with me today. It’s been a pleasure.

Louise: You’re welcome.

Mike: If you want to read the report from Louise Dorignon, and her colleagues at RMIT on housing circularity, please see the link in the show notes. If you enjoyed this episode of Mongabay Explores and you want to support us, tell a friend about this podcast series and also our award-winning flagship podcast series The Mongabay Newscast. Word of mouth helps expand our reach, but you can also support us by becoming a monthly sponsor by heading to patreon.com/Mongabay. You can donate there to help us cover production costs and hosting fees for all of our podcast content. If you want to stay up-to-date on all things Mongabay follow us on Facebook, Instagram, Mastodon, LinkedIn, and Bluesky, where our handle is at Mongabay. This concludes episode three of our circular economy series. And the final episode in this season of Mongabay Explores. Stay tuned for the next one.