Can architects enable better home affordability?
Australia has a big problem. The economy is stagnating badly and the Reserve Bank is attempting to kickstart the economy with a stimulus campaign by reducing interest rates. For the architecture profession this is very scary as recession typically means markedly reduced margins. The contemporary architecture business model is outmoded and is ill equipped to deal with an economic recession or structural economic change.
We are currently inhabiting the fourth industrial revolution, whereas the architecture business model is stuck in the first which in a dynamic contemporary society makes it a dinosaur. The architecture business model is creatively unimaginative and based on the simple notion of the correct proportioning of the hourly rate where firms make money through the leverage of people and pricing based on time. This approach is from a “bygone era of stability, linearity and predictability“ and cant compete with digital disruption (ii, Goodwin 2018). This method promotes conservative thinking, myopic individualism and uninspiring outcomes (Weiss 2009).
Architects are creatives whose foundational training is based on solving big problems in an elegant manner. The discipline is a fusion of art and science and for this reason the profession can adapt to the digital disruption of the next decade. We believe that architects need to move away from designing a single house and scale up to solve the problem of global house affordability. This will need a design framework that encompasses aesthetics, functionality, changing sociocultural patterns, economics and finance. The profession must remove the mortgage to enable a successful, creative business plan.
The problem with housing affordability in Australia is the financial system and more particularly the mortgage. The mortgage is the greatest impediment to equality in Australian society. It is outmoded because of its prohibitive deposit and interest rates. We will investigate alternative financial models such as the blockchain, the ICO and cryptocurrencies whose popularity has arisen from perceived global financial inequality. These financial innovations remove non-value producing elements in the process of trading and promote peer to peer trading which can reinvent the value equation of service transactions to something that benefits all social classes.