tag:theconversation.com,2011:/global/topics/downsizing-17553/articlesdownsizing – The Conversation2020-02-11T19:10:07Ztag:theconversation.com,2011:article/1305312020-02-11T19:10:07Z2020-02-11T19:10:07ZHalf of over-55s are open to downsizing – if only they could find homes that suit them<figure><img src="https://images.theconversation.com/files/314351/original/file-20200210-27548-13rgp57.jpg?ixlib=rb-1.1.0&rect=279%2C96%2C3473%2C2435&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">karenfoleyphotography/Shutterstock</span></span></figcaption></figure><p>More than half of Australians over the age of 55 are open to downsizing, according to a <a href="https://www.ahuri.edu.au/research/final-reports/325">new report</a> based on a survey of 2,400 households. The main barrier to moving to a smaller home is a lack of housing that matches their needs and preferences. The rapid growth in the number of older Australians adds to the major challenge housing markets face in meeting their diverse housing needs.</p>
<p>Downsizing, or rightsizing, is considered an essential component of meeting the <a href="https://www.ahuri.edu.au/research/final-reports/317">housing aspirations of older Australians</a>. At the same time, downsizing creates housing opportunities for younger households by freeing up family homes.</p>
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<a href="https://theconversation.com/what-sort-of-housing-do-older-australians-want-and-where-do-they-want-to-live-120987">What sort of housing do older Australians want and where do they want to live?</a>
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<p>The ageing population also creates fiscal challenges for government, in terms of delivering services to the home and providing residential care. Downsizing can enable older Australians to age well and age in place rather than potentially move prematurely into residential care. </p>
<p>The <a href="https://www.ahuri.edu.au/research/final-reports/325">report</a> released today by the Australian Housing and Urban Research Institute (AHURI), for which 2,400 households over 55 were surveyed, found 26% of such households had downsized. Another third had thought about it. Overall, the findings point to a strong appetite among older Australians to downsize their dwellings. </p>
<p>With about <a href="https://www.abs.gov.au/websitedbs/D3310114.nsf/Home/Census?OpenDocument&ref=topBar">6.5 million Australians aged 55 or older</a>, living in about <a href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/6503.0Main+Features100002015-16?OpenDocument">4.3 million households</a>, our findings suggest downsizing could be relevant to 2.5 million households.</p>
<h2>Why downsize? And what are the obstacles?</h2>
<p>We know older Australians downsize in response to life events such as changes in health and relationship status, or children leaving the parental home. Lifestyle preferences and difficulties maintaining their garden or house also <a href="https://businesslaw.curtin.edu.au/wp-content/uploads/sites/5/2016/06/bcec-keeping-a-roof-over-our-heads-report.pdf">shape downsizing behaviour</a>. </p>
<p>Barriers to downsizing include a lack of suitable housing and a <a href="https://www.ahuri.edu.au/research/final-reports/214">lack of financial incentives</a>. There are also emotional and physical barriers to moving. Financial factors, however, do not greatly impact the decision to move, nor does <a href="https://www.ahuri.edu.au/research/final-reports/321">perceived financial well-being increase</a> once they have downsized. </p>
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<a href="https://theconversation.com/downsizing-cost-trap-awaits-retirees-five-reasons-to-be-wary-80895">Downsizing cost trap awaits retirees – five reasons to be wary</a>
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<p>Where those who had downsized were dissatisfied, this was most commonly related to the new dwelling, particularly its size, and the neighbourhood. </p>
<h2>Is it actually downsizing?</h2>
<p>One of the policy rationales for downsizing is to reduce the <a href="https://www.abc.net.au/news/2017-07-17/vacancy-tax-wont-solve-australias-empty-housing-problem/8709184">underutilisation of dwellings</a>. However, this is at odds with the attitude of many older Australians. They consider “spare” bedrooms necessary for use as permanent guest rooms (58%), studies (50%), or dedicated rooms for children or grandchildren (31%). </p>
<p>Space remains important to Australian downsizers. Over half of them move to a dwelling with three or more bedrooms. A third move to an apartment. </p>
<p>However, two-thirds of downsizers surveyed did move to a dwelling with fewer bedrooms. Three bedrooms was the preferred dwelling size for older Australians. Downsizing the garden was essential for most. </p>
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<p>Older Australians aspire to attain or retain home ownership. Their preferred neighbourhood has shopping, medical, recreational and public transport services all within walking distance. </p>
<p>Downsizers appear mobile. While under a quarter downsized within their original neighbourhood, 42% moved to a neighbourhood completely new to them. </p>
<p>The survey finding of a lack of suitable housing options matching would-be downsizers’ preferences may explain why so few were able to downsize in their original neighbourhood. </p>
<h2>Delivering what older Australians want</h2>
<p>If the local market does not have enough options available to meet the needs of older households, it is very difficult to downsize within an existing community. Moving to another desired location can also be problematic. </p>
<p>Meeting the needs of older Australians generally means an increase in medium-density housing. Developers are likely to require incentives to produce these medium-density products rather than potentially more profitable high-density development – although there is, of course, a downsizing market for well-located apartments. </p>
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<span class="caption">Most downsizers want less garden to maintain, but still want a three-bedroom home.</span>
<span class="attribution"><span class="source">Ben Romalis/Shutterstock</span></span>
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Read more:
<a href="https://theconversation.com/people-want-and-need-more-housing-choice-its-about-time-governments-stood-up-to-deliver-it-122390">People want and need more housing choice. It's about time governments stood up to deliver it</a>
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<p>The retirement industry has begun responding to the aspirations of older Australians. It is developing larger dwellings and offering a growing range of options, from high-end to affordable — all of which are accessible and suitable for ageing in place. </p>
<p>Equity-rich older Australians may wish to build a new dwelling in which to downsize. But they are often unable to borrow for this unless they have considerable capital available. </p>
<p>To support this avenue, new development finance models could be created to allow older Australians to develop without first having to sell the primary home. This shift would allow more collaborative forms of development, such as a group of <a href="https://www.ahuri.edu.au/research/final-reports/294">like-minded individuals developing</a> a site as housing for a small community. </p>
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Read more:
<a href="https://theconversation.com/co-housing-works-well-for-older-people-once-they-get-past-the-image-problem-79907">Co-housing works well for older people, once they get past the image problem</a>
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<p>For those <a href="https://www.abc.net.au/news/2020-02-10/older-australians-who-own-home-more-than-20-times-better-off/11815006">vulnerable private renters</a> moving into retirement, more secure rental accommodation through the social housing sector and delivered privately is essential. The community housing sector has a key role to play.</p>
<h2>Where next?</h2>
<p>The Australian housing landscape must shift towards a model of dwelling diversity with secure tenures – ownership and rental – in neighbourhoods where residents can walk easily to weekly services and recreation facilities, participate socially and be close to public transport options. </p>
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Read more:
<a href="https://theconversation.com/fall-in-ageing-australians-home-ownership-rates-looms-as-seismic-shock-for-housing-policy-120651">Fall in ageing Australians' home-ownership rates looms as seismic shock for housing policy</a>
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<p>Design is equally important. Australians need <a href="https://theconversation.com/we-need-more-flexible-housing-for-21st-century-lives-102636">adaptable dwellings</a> that can change to meet housing needs. </p>
<p>Such a landscape will provide effective downsizing options in which households can age well in the places that best meet their needs and aspirations. </p>
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Read more:
<a href="https://theconversation.com/for-australians-to-have-the-choice-of-growing-old-at-home-here-is-what-needs-to-change-91488">For Australians to have the choice of growing old at home, here is what needs to change</a>
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<img src="https://counter.theconversation.com/content/130531/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Amity James receives funding from the Australian Housing and Urban Research Institute and the Bankwest Curtin Economics Centre.</span></em></p><p class="fine-print"><em><span>Steven Rowley receives funding from the Australian Housing and Urban Research Institute, the Bankwest Curtin Economics Centre and the Australian Research Council. He is chair of the Housing Industry Forecasting Group in Western Australia</span></em></p><p class="fine-print"><em><span>Wendy Stone receives funding from the Australian Housing and Urban Research Institute and the Australian Research Council. </span></em></p>While a majority of householders over 55 have thought about downsizing, only one in four have done it. What’s stopping them? Most simply can’t find a home in the right place that meets their needs.Amity James, Senior Lecturer, School of Economics, Finance and Property, Curtin UniversitySteven Rowley, Head of School, Economics, Finance and Property, Curtin University. Director, Australian Housing and Urban Research Institute, Curtin Research Centre, Curtin UniversityWendy Stone, Associate Professor, Centre for Urban Transitions and Director, Australian Housing and Urban Research Institute Swinburne Research Centre, Swinburne University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/982462018-06-17T18:54:37Z2018-06-17T18:54:37Z‘Honey, I shrunk the store’: Why your local supermarket is getting smaller<figure><img src="https://images.theconversation.com/files/223292/original/file-20180615-32307-grv2ke.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Woolworths has already announced it will open more smaller stores. </span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>If you think your local supermarket is shrinking, you might be right.</p>
<p>Coles has <a href="http://www.wesfarmers.com.au/docs/default-source/asx-announcements/2018-strategy-briefing-day-presentatione296536999c863f7bfccff00000e9025.pdf?sfvrsn=0">announced</a> that it will open smaller-sized supermarkets in more locations. This follows the lead taken by other large retailers such as <a href="https://www.insideretail.com.au/news/coles-has-lost-its-way-as-woolworths-extends-lead-201802">Woolworths</a>, <a href="https://www.insideretail.com.au/news/harris-scarfe-refocuses-offer-with-new-format-201806">Harris Scarfe</a> and <a href="http://www.wesfarmers.com.au/docs/default-source/asx-announcements/2018-strategy-briefing-day-presentatione296536999c863f7bfccff00000e9025.pdf?sfvrsn=0">Target</a>. </p>
<p>Australia’s <a href="http://infrastructureaustralia.gov.au/policy-publications/publications/files/future-cities/Chapter-1.pdf">growing population</a> may mean more customers, but it is also putting pressure on available real estate for retailers. As population density increases, mostly in urbanised areas, many retailers are shrinking to grow. </p>
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Read more:
<a href="https://theconversation.com/how-high-streets-and-shopping-malls-face-a-domino-effect-from-major-store-closures-97263">How high streets and shopping malls face a 'domino effect' from major store closures</a>
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<p>The blame for <a href="http://www.afr.com/real-estate/retail-store-closures-to-accelerate--led-by-myer-target-macquarie-20171029-gzaoya">recent store closures</a> has fallen mainly on <a href="https://www.amazon.com.au/?tag=hydramzkw0au-22&hvadid=237274858500&hvpos=1t1&hvnetw=g&hvrand=14241777619990121769&hvpone=&hvptwo=&hvqmt=e&hvdev=c&hvdvcmdl=&hvlocint=&hvlocphy=9072357&hvtargid=kwd-297697473250&ref=pd_sl_zin8sykk8_e">Amazon</a> and other <a href="http://www.abc.net.au/news/2017-02-24/local-retailers-feel-fashion-pain-as-global-brands-expand/8301502">global players entering the Australian market</a>. </p>
<p>However, <a href="http://www.smh.com.au/business/property/sydney-melbourne-enter-top-10-most-expensive-retail-strips-in-asia-20171114-gzlac5.html">high rents</a>, a lack of prime real estate, and rising <a href="https://www.strategyand.pwc.com/trend/2017-retail-trends">inventory costs</a> and <a href="https://www.sbs.com.au/news/small-business-secrets/article/2018/06/01/how-minimum-wage-increase-could-impact-small-businesses">wages</a> have also contributed to the need to downsize. </p>
<h2>Shrinking to grow</h2>
<p>Retailers have responded to increased costs and competition in two ways: either by “rightsizing” - <a href="https://www.forbes.com/sites/barbarathau/2018/01/04/sears-continues-to-shrink-to-close-100-stores-here-are-the-locations-shuttering/#28fc50676719">closing underperforming and unprofitable locations</a> as Myer <a href="http://www.smh.com.au/business/retail/more-stores-to-close-as-myer-profit-tumbles-80-per-cent-20170913-gyh0y6.html">has done</a>, or by “downsizing” - shrinking their store footprints.</p>
<p>Smaller store formats allow retailers to maintain a bricks-and-mortar presence at a more affordable cost.</p>
<p>Several established firms, as well as retail start-ups, are taking the small store trend a step further by <a href="http://www.afr.com/real-estate/commercial/leasing/micro-stores-popping-up-in-melbourne-and-sydney-20161130-gt0obk">opening “micro” stores</a>. </p>
<p>Some retailers are also cleverly using smaller shopfronts as “<a href="https://theconversation.com/why-retailers-want-you-to-click-and-collect-83094%5D(https://theconversation.com/why-retailers-want-you-to-click-and-collect-83094">click and collect</a>” points for their online customers. </p>
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<a href="https://theconversation.com/why-retailers-want-you-to-click-and-collect-83094">Why retailers want you to 'click and collect'</a>
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<p>Smaller stores equal smaller rents. Retail rents are charged per square metre, meaning the bigger the store, the higher the rent. </p>
<p>To put it in perspective, <a href="https://www.smartcompany.com.au/finance/economy/international-retailers-keep-sydney-and-melbourne-in-top-10-most-expensive-global-retail-property-markets/">while global retailers seek retail sites</a> from anywhere between 7,500 square metres (Lululemon Athletica) to 40,000 square metres (Uniqlo), smaller stores <a href="https://www.news.com.au/finance/business/retail/coles-are-expanding-into-convenience-stores-and-that-could-be-bad-news-for-iga/news-story/7923334a0e7a838b2ca1859737fb8289?utm_medium=Facebook&utm_campaign=EditorialSF&utm_content=SocialFlow&utm_source=News.com.au">typically measure around 600 square metres</a> which is around a quarter of the size of the average supermarket. </p>
<p>Prime location retail rents continue to increase <a href="https://www.smh.com.au/business/companies/cbd-prime-retail-rents-jump-10pc-on-lack-of-space-20170718-gxdndo.html">due to lack of available space and strong demand from overseas retailers</a> such as Zara and H&M, who are happy to pay up to A$20,000 per square metre per year to shore up key inner city locations. </p>
<p>Industry reports <a href="https://www.allianz.com.au/business/business-insurance/news/retail-property-leasing-tips-and-costs">indicate</a> that the Sydney CBD remains the most expensive for retailers, with an average of A$13,335 per square metre per year. Melbourne’s CBD is half the cost at A$6,670, Brisbane is A$4,704, Adelaide is A$4,000-5,000 and Perth is nearly A$4,000 per square metre per year. </p>
<p>Annual average rents in trendy inner-city suburbs, like Surry Hills and Wooloomooloo in Sydney, come in at almost A$14,000 per square metre.</p>
<p>So if you have a very small 80sqm convenience store in a prime Sydney CBD location, your annual rent bill will be a little over A$1 million.</p>
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Read more:
<a href="https://theconversation.com/location-and-voice-technology-are-the-future-of-retail-94117">Location and voice technology are the future of retail</a>
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<p>Going smaller can open up new, and often better, locations. As <a href="https://www.commercialrealestate.com.au/news/chinese-investors-snap-up-sunbury-retail-centre-for-15m/">some real estate analysts noted last year</a>, “with the current environment characterised by a lack of premium retail investment offerings” retailers are increasingly finding it difficult to snap up prime locations. </p>
<p>Going smaller therefore <a href="https://www.forbes.com/sites/laurapomerantz/2014/05/06/time-for-retailers-to-re-evaluate-their-store-footprint-one-size-does-not-fit-all/#5dddbb4a3685">opens up more opportunities</a>) for retailers to capitalise on prime locations, particularly in highly populated and affluent inner-urban and suburburban areas.</p>
<p>But there are other benefits too, such as <a href="https://retailowner.com/Inventory/Excess-Inventory-Costs">less inventory</a>, which also means <a href="http://www.smh.com.au/business/retail/were-not-trying-to-break-a-cycle-debenhams-dishes-tough-love-on-discounting-20171019-gz40ib.html">less discounting</a>. Smaller stores also require fewer staff, and less cleaning and maintenance.</p>
<h2>What are the benefits for consumers?</h2>
<p>Research shows that customers are increasingly suffering from choice overload, also known as the “<a href="http://www.economist.com/node/17723028">tyranny of choice</a>”. </p>
<p>This is particularly so for online shoppers and for those browsing the aisles in superstores, department stores and large chain stores. A limited product offering, in a much smaller space, helps consumers make decisions more easily, and appeals to those shoppers who are primarily looking for “convenience”.</p>
<p>Small stores appeal directly to a growing number of affluent baby boomers and millennials who shop more frequently with smaller basket sizes. These shoppers demand <a href="https://link.springer.com/chapter/10.1007/978-3-319-69685-0_7">personalisation, special services and quality products</a>.</p>
<p>Because small retailers have less inventory, they are able to turn stock over, replenish and refresh products at a much faster pace than their larger rivals. They can promise <a href="https://hbswk.hbs.edu/archive/zara-s-secret-for-fast-fashion">new items arriving in store at shorter intervals</a>. The lure of “newness” is a very attractive prospect for shoppers.</p>
<h2>Are smaller stores here to stay?</h2>
<p>In 2018 and beyond, retailing will continue to evolve. Retailers have always had to adapt to meet changing consumer demands, advances in technology and the like. </p>
<p>A sure sign that physical retail is still alive and well is evident in the growing number of <a href="http://www.telegraph.co.uk/business/2017/11/14/internet-retailers-turn-physical-stores-online-sales-look-set/">online retailers</a> and <a href="http://www.ny1.com/nyc/all-boroughs/news/2018/06/12/covergirl-to-open-store-in-times-square">established brands</a> that are opening physical stores to complement their online offerings.</p>
<p>Just as <a href="https://theconversation.com/christmas-shopping-is-changing-but-retailers-must-accept-that-pop-up-stores-are-here-to-stay-88614">pop-up</a> retailing has cemented itself in the retail landscape, smaller stores are also likely to become a significant long-term strategic proposition for the retail industry, where it is now “big to be small”.</p><img src="https://counter.theconversation.com/content/98246/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Several large retailers and supermarkets have announced they are going to downsize to smaller stores.Louise Grimmer, Lecturer in Marketing, Tasmanian School of Business and Economics, University of TasmaniaGary Mortimer, Associate Professor in Marketing and International Business, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/914882018-03-06T19:34:08Z2018-03-06T19:34:08ZFor Australians to have the choice of growing old at home, here is what needs to change<figure><img src="https://images.theconversation.com/files/208346/original/file-20180228-36706-spb358.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">When an ageing person is forced to move out of their family home, that can trigger a host of problems that policy is doing little to prevent.</span> <span class="attribution"><span class="source">Diego Cervo/Shutterstock</span></span></figcaption></figure><blockquote>
<p>Ooh, a storm is threatening my very life today / If I don’t get some shelter / Oh yeah, I’m gonna fade away…</p>
</blockquote>
<p>Mick Jagger won’t ever need to be concerned about having somewhere to live, but older people have worried about where they will spend their final years since long before the Rolling Stones sang to a generation’s insecurities in 1969. Many wish to stay in their homes, but current policy doesn’t support age-friendly housing. It also makes it difficult for ageing people to manage their finances. </p>
<p>The population of people aged 65 and over in Australia is <a href="https://www.aihw.gov.au/reports/older-people/older-australia-at-a-glance/contents/demographics-of-older-australians/australia-s-changing-age-and-gender-profile">projected to grow</a> from 3.7 million to 8.7 million by 2056. Cities, towns and housing need to be designed to help people stay at home as they age. Financial policy should be updated to enable them to better manage their assets.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/ageing-activism-why-we-need-to-give-voice-to-the-new-third-age-50305">Ageing activism: why we need to give voice to the new third age</a>
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</em>
</p>
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<h2>Gwen’s story</h2>
<p>Five years before her death, Gwen (not her real name) and her family faced a dilemma. Like many Australians, Gwen had juggled a succession of jobs, eventually owning her modest home. Following a fall, hospitalisation and rehab, her prognosis was not good. </p>
<p>Gwen wanted to die at home, or with her family. Should members of the family move into her house? Should she move into one of her adult children’s houses? What about their children? </p>
<p>Should they rent out the family properties, so Gwen and volunteering family members could cohabit in a more suitable rented property? Could they afford a house with the flexibility to handle two adults, one elderly person, possibly kids and pets? </p>
<p>For families like Gwen’s, there are few viable, let alone affordable, housing options. Gwen’s housing shuffle proved stressful for everyone. She was ultimately placed, against her wishes, in a nursing home. Aged 82, deprived of any sovereignty in her decision-making, Gwen passed away, but the family arguments and blame continued. </p>
<h2>What is stopping people ‘ageing in place’?</h2>
<p>Gwen’s deck of dominoes could not be reconfigured because of the housing, tax and financial barriers imposed by the same governments that are trying to implement “ageing in place”. </p>
<p>Ageing in place isn’t just about ageing at home. It’s about keeping older people connected to their neighbourhood and community as part of a broader framework of “active ageing”, with the aim of improving their quality of life and giving them more control over their circumstances.</p>
<p>Since the World Health Organization (WHO) released its <a href="http://www.who.int/ageing/publications/active_ageing/en/">Active Ageing</a> policy framework in 2002, federal governments have endorsed this approach. The 2013 <a href="https://www.legislation.gov.au/Details/C2016C00170">Living Longer Living Better</a> reforms and last year’s <a href="https://agedcare.health.gov.au/reform/aged-care-legislated-review">Legislated Review of Aged Care</a> promote emotional and mental preparation for old age, which is important for active ageing. </p>
<p>However, many aspects of policy in Australia undermine successful ageing in place. </p>
<h2>A lack of suitable housing</h2>
<p>First, ageing Australians have a limited choice of suitable housing, as the Productivity Commission <a href="https://www.pc.gov.au/research/completed/housing-decisions-older-australians/housing-decisions-older-australians.pdf">has highlighted</a>. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/lack-of-housing-choice-frustrates-would-be-downsizers-60512">Lack of housing choice frustrates would-be downsizers</a>
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<p><a href="http://www.livablehousingaustralia.org.au/">Livable Housing Australia’s</a> guidelines recommend installing nonslip floors and grab rails and retrofitting rooms to help keep them at a comfortable temperature. This improves home liveability and reduces risks of harm for occupants. Incremental measures like these also have beneficial ripple effects by making housing suitable for all ages. However, such guidelines are not yet widely implemented. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/how-can-we-best-design-housing-for-australias-ageing-population-50304">How can we best design housing for Australia's ageing population?</a>
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<p>The ability to influence what is built, and where, can greatly enhance or inhibit well-being. Denmark and Canada are already running with the <a href="https://www.880cities.org/">8 80 Cities concept</a>, which aims to transform cities so they meet the needs of people of all ages. It’s a good example for Australian planners. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/206920/original/file-20180219-75984-lyzel.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/206920/original/file-20180219-75984-lyzel.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/206920/original/file-20180219-75984-lyzel.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/206920/original/file-20180219-75984-lyzel.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/206920/original/file-20180219-75984-lyzel.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/206920/original/file-20180219-75984-lyzel.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/206920/original/file-20180219-75984-lyzel.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Greater Sydney Commission Chief Commissioner Lucy Turnbull inspects transport construction work in Sydney.</span>
<span class="attribution"><span class="source">Danny Casey/AAP</span></span>
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</figure>
<p>Local governments need to embrace redevelopment models that provide better ageing-in-place options for communities. The Greater Sydney Commission recently took a step in the right direction with its <a href="https://www.greater.sydney/news/plans-address-housing-choice-and-affordability">plans to increase housing supply and affordability</a>. Its investigation into improving transport options and amenities could also enhance liveability. </p>
<p>The City of Melbourne’s <a href="http://www.melbourne.vic.gov.au/building-and-development/urban-planning/city-wide-strategies-research/Pages/places-for-people.aspx">Places for People</a> strategy and the <a href="https://www.seniorsonline.vic.gov.au/get-involved/age-friendly-victoria">Age-Friendly Victoria</a> initiative commit to housing that meets the WHO’s essential age-friendly city features. These programs recognise that placemaking is strongly linked with successful ageing in place.</p>
<hr>
<p><em><strong>Read more:</strong> <a href="https://theconversation.com/eight-simple-changes-to-our-neighbourhoods-can-help-us-age-well-83962">Eight simple changes to our neighbourhoods can help us age well</a></em></p>
<p><em><strong>Read more:</strong> <a href="https://theconversation.com/contested-spaces-we-need-to-see-public-space-through-older-eyes-too-72261">We need to see public space through older eyes too</a></em></p>
<hr>
<h2>Financial penalties for moving</h2>
<p>Most Australians lack the financial means to customise their homes as they age. Safety concerns will eventually collide with their desire for independent living, forcing a devil’s choice. The decision to enter aged care can be very difficult for people and their families. Taxation and pension rules that prevent them managing their assets without losses worsen the situation. </p>
<p>If governments want to promote active ageing, then older people must be given more flexibility in managing their assets. This means allowing them to sell the family home, take the tax-free asset value, downsize to a suitable smaller property, and put the leftover money into their super without penalties in the form of stamp duty, tax or loss of benefits.</p>
<p>Many people <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3082757">don’t want to give up home ownership</a>, especially as a family home doubles as a tax shelter. Ideally, a compact property would be preferable, designed to accommodate any generation, and with better access to the amenities and services needed later in life. Then, should they eventually need high-level care, the home could be rented out, providing an income stream to help cover medical and care expenses.</p>
<p>Future-proofed properties like this mostly do not exist in Australia. They don’t exist because, thanks to current policy, the elderly are reluctant to monetise their tax-free asset (the family home) to buy such properties and thus generate a demand to be met by developers. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/downsizing-cost-trap-awaits-retirees-five-reasons-to-be-wary-80895">Downsizing cost trap awaits retirees – five reasons to be wary</a>
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</em>
</p>
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<h2>Where do you want to die?</h2>
<p>Baby boomers are living longer and are more mindful of their health and lifestyle. However, a recent <a href="https://nationalseniors.com.au/be-informed/news-articles/older-people-fail-plan-longer-lifespans">survey</a> found that only a small percentage were planning their financial future so they could live independently for as long as possible. And a growing number of seniors lack the income to cover the unforeseen costs that arise later in life. </p>
<p>Governments need to step up public information campaigns to encourage people to prepare for their old age. Without it, the confronting question “Where do you want to die?” cannot be feasibly answered.</p>
<p>Governments and the private sector can also take action to:</p>
<ul>
<li>acknowledge the tax shelter status of private homes alongside the tax shelter status of superannuation</li>
<li>reduce transaction costs such as stamp duty that discourage moving before it becomes essential, as it often does for the over-80s</li>
<li>remove disincentives to releasing equity in the family home (for example, the pension means tests on proceeds in interaction with the pension and superannuation systems)</li>
<li>with the <a href="https://theconversation.com/interest-in-tiny-houses-is-growing-so-who-wants-them-and-why-83872">growth of the tiny house movement</a>, ensure a wider variety of <a href="https://architectureau.com/articles/tiny-terrace-houses-on-smallest-freehold-lots-underway/">housing stock, styles</a> and locations to support ageing in place</li>
<li>encourage emerging home ownership models, such as <a href="https://www.choice.com.au/money/property/buying/articles/reverse-mortgages-and-home-reversion-schemes">home equity release</a>, reverse mortgages, <a href="https://domacom.com.au/wp-content/uploads/2017/07/DomaCom-Corporate-Update-DCL-28-July-2017.pdf">fractional property investment</a> and <a href="http://www.lifestyletransitionservices.com.au/wp-content/uploads/2015/10/Ebook-Final-26.10.15-_-Housing-Options.pdf">co-operative housing</a> – to name a few.</li>
</ul>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/co-housing-works-well-for-older-people-once-they-get-past-the-image-problem-79907">Co-housing works well for older people, once they get past the image problem</a>
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</em>
</p>
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<p>These initiatives would allow people to find and create homes that offer shelter from the ageing “perfect storm” already under way in Australia.</p><img src="https://counter.theconversation.com/content/91488/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Juliette Brodsky has been affiliated with an organisation that seeks to develop housing for elderly people.</span></em></p><p class="fine-print"><em><span>Francis Grey is affiliated with an organisation that has developed fractional investment opportunities for investors, and another organisation that has sought to develop housing for elderly people.</span></em></p><p class="fine-print"><em><span>Sarah Sinclair receives funding from Longevity Group Australia as a member of the School of Economics, Finance and Marketing Placemaking economics Group. </span></em></p>Millions of older Australians live in houses that don’t safely meet their needs, but they’re not ready for a nursing home. Lack of suitable housing and the moving costs leave them with nowhere to go.Juliette Brodsky, Researcher, College of Business, RMIT UniversityFrancis Grey, Economist and Sessional Academic, RMIT UniversitySarah Sinclair, Lecturer in Economics, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/808952017-07-30T20:11:00Z2017-07-30T20:11:00ZDownsizing cost trap awaits retirees – five reasons to be wary<figure><img src="https://images.theconversation.com/files/179733/original/file-20170726-30108-h6wbsw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Add up all the neglected costs of downsizing and retirees have good reason to be wary of making the move.</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/worried-senior-couple-checking-their-bills-388566784?src=AAHgc3E3V_gFUzd07Jphfg-1-0">wavebreakmedia from www.shutterstock.com</a></span></figcaption></figure><p>It’s time to debunk the myth of zero housing costs in retirement if we want to understand why retirees resist downsizing. Retirees have at least five reasons to be wary of the costs of downsizing.</p>
<p>Retirees living in middle-ring suburbs face frequent calls to downsize into apartments to free up larger allotments in these suburbs for redevelopment. Retirees who fail to downsize into smaller units and apartments are viewed as being a greedy, baby-boomer elite, stealing financial security from younger generations. </p>
<p>It also makes sense to policymakers for retirees to move into less spacious accommodation and make way for high-density housing. Housing think-tank AHURI <a href="http://www.ahuri.edu.au/__data/assets/pdf_file/0021/14079/AHURI_Final_Report_No_286_Australian-demographic-trends-and-implications-for-housing-assistance-programs.pdf">fosters this view</a>. Yet seniors remain resistant to moving, in part because of the ongoing costs they would face. </p>
<hr>
<p><strong>Further reading:</strong> <a href="https://theconversation.com/lack-of-housing-choice-frustrates-would-be-downsizers-60512">Lack of housing choice frustrates would-be downsizers</a></p>
<hr>
<p>The concept of zero housing costs in retirement is based on a 1940s view of a well-maintained, single dwelling on a single allotment of land where the mortgage has been paid off. This concept is incompatible with medium- and high-density housing and refusing to acknowledge ongoing housing costs may cause significant poverty for retirees. </p>
<h2>Reason 1 – upfront moving costs are high</h2>
<p>When a house is sold the owner receives the sale funds minus the real estate and legal fees. When the same person then buys a different property to live in, they pay legal fees plus stamp duty. </p>
<p>For cities such as Melbourne and Sydney, these costs are likely to exceed A$70,000. </p>
<p>These high transfer costs may mean it is not cost-effective <a href="https://theconversation.com/why-older-australians-dont-downsize-and-the-limits-to-what-the-government-can-do-about-it-76931">for the person to move</a>. </p>
<h2>Reason 2 – levies are high</h2>
<p>Because apartment owners pay body corporate levies, people often assume this is just the same as periodic payment of rates, water, insurance and other costs. It is not. </p>
<p>Fees remissions for low-income retirees for rates, power, insurance and water are difficult to apply within a body corporate environment. As a consequence, these are usually not applied to owners of apartments.</p>
<p>The costs of maintaining essential services, such as mandatory fire-alarm testing, yearly engineering certification, lift and air-conditioning inspections, significantly increase ownership costs. </p>
<p>When additional services are supplied, such as swimming pools, gyms and rooftop gardens, these also require periodic inspections. Garbage collection, cleaning, gardening, concierge and strata management services also <a href="https://eprints.utas.edu.au/cgi/users/home?screen=EPrint%3A%3AView&eprintid=23322">must be paid</a>. </p>
<p>Owners of standard suburban homes choose whether they want these services, with those on fixed incomes going without them. </p>
<p>Annual levies for apartment buildings vary, but expect to pay between $10,000 and $15,000. They <a href="https://www.strata.community/understandingstrata/faqs">may be more than this</a>.</p>
<h2>Reason 3 – costs of maintenance</h2>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/179734/original/file-20170726-30125-d2g2s8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/179734/original/file-20170726-30125-d2g2s8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=628&fit=crop&dpr=1 600w, https://images.theconversation.com/files/179734/original/file-20170726-30125-d2g2s8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=628&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/179734/original/file-20170726-30125-d2g2s8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=628&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/179734/original/file-20170726-30125-d2g2s8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=790&fit=crop&dpr=1 754w, https://images.theconversation.com/files/179734/original/file-20170726-30125-d2g2s8.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=790&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/179734/original/file-20170726-30125-d2g2s8.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=790&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">Lift maintenance is one of many costs that suburban home owners needn’t worry about.</span>
<span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/man-hitting-elevator-653680081?src=LJc4V1Yb8nrTn7HULDVsyw-1-72">shutterstock</a></span>
</figcaption>
</figure>
<p>Apartments are often sold as a maintenance-free solution for older people. The maintenance is not free. It needs to be paid for. </p>
<p>Maintenance costs are higher in an apartment than a standard suburban home because there are more items and services to be maintained and fixed. Lifts and air conditioning need periodic servicing and fixing. This is in addition to the mandatory inspections listed above.</p>
<h2>Reason 4 – loss of financial security</h2>
<p>It is a mistaken belief that the maintenance costs that form part of the body corporate fee include periodic property upgrades. This relates to items that are owned collectively with other apartment owners. </p>
<p>Major servicing at the ten-year mark and usually each five-to-seven years after that include painting, floor-covering replacement, and lift and air-conditioning repair or replacement. </p>
<p>Major upgrades may also include garden redesign or other external building enhancement including <a href="https://eprints.utas.edu.au/cgi/users/home?screen=EPrint%3A%3AView&eprintid=23315">environmental upgrades</a>. All owners share these upgrade costs. </p>
<p>Costs of upgrading the inside of an apartment (a bathroom disability upgrade, for example) are additional again. </p>
<p>Once the body corporate committee members pledge funds towards an upgrade, all owners are required to raise their share of the funds, whether they can afford it or not. Communal choice outweighs an individual owner’s need to delay upgrade costs. </p>
<p>Owners who buy apartments that are part of a body corporate effectively lose control of their future financial decisions.</p>
<h2>Reason 5 – loss of security of tenure</h2>
<p>Loss of security of tenure is usually associated with renters. However, the recent introduction of <a href="http://www.lpi.nsw.gov.au/__data/assets/pdf_file/0009/25965/Termination_of_a_strata_scheme_by_RG.pdf">termination legislation</a> in New South Wales gives other owners the right to vote to terminate a strata title scheme. When this occurs, all owners, including reluctant owners of apartments within that scheme, are compelled to sell.</p>
<p>There are valid reasons why termination legislation is desirable, as many older apartment complexes are reaching the end of their useful life. </p>
<p>Even so, as termination legislation is rolled out across the states, owner- occupiers effectively lose control of how long they will own a property for. They no longer have security of tenure, which means retirees may face an uncertain housing future in their old age.</p>
<hr>
<p><strong>Further reading:</strong> <a href="https://theconversation.com/when-developers-come-knocking-why-strata-law-shake-up-wont-deliver-cheaper-housing-50971">Why strata law shake-up won’t deliver cheaper housing</a></p>
<hr>
<h2>Downsizing raises poverty risks</h2>
<p>Because current data sets do not adequately take account of ongoing costs associated with apartment living, the effect of downsizing on individual households is masked. </p>
<p>Downsizing retirees into the apartment sector creates ongoing financial stress for older people. Creating <a href="https://theconversation.com/it-will-take-more-than-piecemeal-reforms-to-convince-older-australians-to-downsize-51043">tax incentives to move</a> does not tackle these ongoing costs.</p>
<p>Centrelink payments for of <a href="https://www.humanservices.gov.au/customer/services/centrelink/age-pension">$404 per week</a> are well below <a href="http://acoss.wpengine.com/poverty-2/">the poverty line</a>. Yet we expect retirees to willingly downsize and to be able to cede most of their Centrelink payments to cover high body corporate costs. </p>
<p>Requiring retirees to downsize for the greater urban good will shift poverty onto retirees who could barely manage in their previously owned standard suburban home. </p>
<p>Failing to understand the effect of high ongoing costs associated with apartment living and reinforcing the myth of zero housing costs in retirement will continue to lead to poor policy outcomes.</p><img src="https://counter.theconversation.com/content/80895/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Erika Altmann does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Retirees are often urged to downsize to free up suburban properties for the next generation and for higher-density development. What’s being ignored is the costs of moving into a unit or apartment.Erika Altmann, Property and Housing Management Researcher, University of TasmaniaLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/785472017-06-08T16:31:39Z2017-06-08T16:31:39ZMajor change at work can trigger loss and grief. Organisations must accept this<figure><img src="https://images.theconversation.com/files/172723/original/file-20170607-11305-yeecef.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Employees are often unsettled by change in their organisations.</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>There is hardly an organisation in the world – big or small – that doesn’t have to adapt to changing circumstances. The pace of development in technology, the quick pace at which new rivals come on the scene, even the rapid turnover of leaders, all require shifts in the way things are done.</p>
<p>But it’s never easy to steer people through change. And, inevitably, there’s resistance. So how can organisations manage it in a way that gets them the outcomes they want?</p>
<p>The default when things don’t go well is to blame employers for being resistant to change. This may be convenient, but it doesn’t deal with the <a href="https://www.ncbi.nlm.nih.gov/pubmed/24362547">real issues</a>. </p>
<p>Over the last few decades organisations around the world have been pushed into large-scale changes, such as downsizing, outsourcing, mergers and acquisitions, or restructuring. The <a href="https://doi.org/10.1080/15416518.2015.1039637">success rate</a> in large scale changes is around 20%.</p>
<p>Change is inevitable. But forced change is emotionally more intimidating and disturbing than is generally assumed. This predisposes employees to be negative about it. What’s very often missing when organisations announce major change is that they don’t recognise this. In fact they should be concerned with issues such as loss, emotional trauma, grief and mourning.</p>
<p>Leaders, managers and change consultants have a great deal to learn about the ways in which employees experience change and the sense of loss they suffer. Change has little chance of success unless the severity of loss is acknowledged, grief is enfranchised and mourning is encouraged.</p>
<h2>Loss</h2>
<p>Work is central to many people’s lives and their identities. Therefore forced changes to jobs or work structures are <a href="http://www.emeraldinsight.com/doi/pdfplus/10.1108/eb028998">experienced</a> particularly intensely.</p>
<p>People become emotionally attached to things, the more important these things are, the more individuals want to hold onto them. The awareness of loss is therefore much more profound and creates more anxiety. </p>
<p>Any change involves some sort of loss. There are tangible losses like loss of income when a person is retrenched or downgraded. And there are abstract losses such as loss of control, status or self-worth.</p>
<p>For the most part, the deeply felt emotional losses are ignored when dealing with change or in debates about resistance to change. Most studies about corporate rationalisation, <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1467-6486.2006.00593.x/abstract">focus</a> mainly on costs and the performance of the survivors.</p>
<p>Where emotions from change are studied, the focus tends to be on the loss of a job. But the subjective losses and subsequent emotional experiences of individuals tend to be underplayed.</p>
<h2>Grieving</h2>
<p>Profound loss is associated with <a href="https://doi.org/10.1080/15325020902724198">grief</a> – a deep sorrow that causes piercing distress. Although the experience of grief is common, there are marked differences in how intensely and for how long people grieve. It’s more intense when there’s greater degree of attachment to what was lost. The rational size of the loss isn’t relevant – merely the emotional intensity with which the individual experiences the loss. </p>
<p>Organisations tend to be <a href="https://doi.org/10.1080/15325020902724198">indifferent</a> and reluctant to acknowledge the intensify of loss felt by individuals. Often demonstrating, or talking about emotions is taboo, and when it happens it’s interpreted as resistance to change. The indifference and carelessness of executives can compound the experience of emotional trauma. In the minds of many, grief is associated with weakness, cowardice or even hysterical exaggeration. </p>
<p>As a result, many employees fear that they’ll be seen as weaklings or disloyal if they show their hurt and pain. </p>
<p>When grieving is denied or discouraged, repression or suppression is the only alternative. This leads to individuals being unable to engage with change, and can even cause other pathologies. <a href="http://www.emeraldinsight.com/doi/full/10.1108/02683940010305289">Research</a> has shown that restructuring, especially downsizings, instils in affected people intense fear, anxiety, distrust, , perceptions of betrayal and rejection. These tend to transpire into lack of focus and higher rates of absenteeism and turnover. And <a href="http://www.emeraldinsight.com/doi/full/10.1108/02683940010305289">occupational injuries and illnesses</a> are much higher at workplaces that goes through transformations.</p>
<p>A <a href="https://www.researchgate.net/publication/285875563_Healing_emotional_trauma_in_organizations_An_OD_framework_and_case_study">study</a> titled “Healing emotional trauma in organizations” describes how a group of executives were negatively affected. This is after they went through a restructuring that logically should have caused no distress. But they were unable to look forward to plan their strategy as they remained stuck in emotional trauma of the restructuring.</p>
<h2>What can be done</h2>
<p>Executives can’t expect employees to leave their emotions at the door when they come to work. They must embrace people’s sense of loss and help them adapt to it if they want change to be successful. </p>
<p>Organisations must build systems that ensure grieving and mourning are allowed so that employees can heal and move on through and past the change. </p>
<p>To ease the pain that comes from change, loss and pain must be publicly acknowledged and mourned in the organisation. Sharing destigmatises the loss and grief as the bereaved employees find validation from peers and managers through their narratives. </p>
<p>This must happen in a safe space, without logical explanations, platitudes or superficial suggestions. In the <a href="https://www.researchgate.net/publication/285875563_Healing_emotional_trauma_in_organizations_An_OD_framework_and_case_study">case study</a>, a group of executives felt healed and prepared for the future after the opportunity to tell and share their stories. The anomaly is that nothing has changed rationally or logically to their situation, but psychologically they would be able to move on. </p>
<p>If safe and constructive environments are created, employees won’t find it necessary to vent their emotions in the passages, around the water cooler or in tea rooms.</p><img src="https://counter.theconversation.com/content/78547/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mias de Klerk does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Many large scale organisational changes end up as failures most of the time employers are blamed for being resistant to change. This may be convenient, but it doesn’t deal with the real issues.Mias de Klerk, Professor: Organisational behaviour, human capital management, leadership development, Stellenbosch UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/767912017-05-10T19:39:22Z2017-05-10T19:39:22ZBudget needs a sharper policy scalpel to help first home buyers<p>In its 2017 budget, the federal government repeatedly stated its preference for a “<a href="http://www.budget.gov.au/2017-18/content/speech/html/speech.htm">scalpel</a>” rather than a “chainsaw” or “sledgehammer” approach to demand management in the housing market.</p>
<p>The number of housing measures in the budget are more wide-ranging than in previous budgets of recent times. Policy levers on both the supply and demand side have been incorporated within a raft of housing measures. The government claims this is a “<a href="http://www.budget.gov.au/2017-18/content/speech/html/speech.htm">comprehensive package that can make a difference</a>”.</p>
<p>However, do the demand measures go far enough to make much-needed inroads into the housing affordability crisis now facing an entire generation of would-be first home buyers? Or is the so-called scalpel too blunt to make a meaningful difference for them?</p>
<h2>First Home Super Savers Scheme</h2>
<p>The budget’s key housing measure for helping young people gain a foothold on the home-ownership ladder is to allow first home buyers to use up to A$30,000 of voluntary superannuation contributions for a deposit on their first home. </p>
<p>Clearly, the scheme will attract the tax advantages of superannuation. Therefore, in principle, it will help first home savers accelerate their savings to buy a home, thus bridging the deposit gap, while protecting superannuation savings accumulated through compulsory employer contributions.</p>
<p>However, at least two key questions are pertinent. </p>
<p>The first relates to how many first home buyers will likely be well positioned to make voluntary contributions to their super saving account. There appears to be a general reluctance among Australians to make voluntary contributions. </p>
<p><a href="https://theconversation.com/why-australians-dont-make-extra-super-contributions-24841">Existing research</a> has found household budget constraints are a major barrier that make it unaffordable for many to make voluntary superannuation contributions. Poor financial literacy and <a href="https://theconversation.com/why-australians-dont-make-extra-super-contributions-24841">lack of knowledge of the superannuation system</a> are other factors. </p>
<p>The second key question relates to the scheme’s impact on property prices. The scheme does not aim to ease demand pressures in the housing market. It is likely that high house prices will not be curbed, so the prospects of home ownership will continue to fade for many first home buyers. </p>
<p>Existing demand-side levers, including the First Home Owners Grant and stamp duty concessions for first home buyers, have not succeeded in improving the affordability of houses for most young people. Hence, it is difficult to see how an additional demand lever such as the First Home Super Savers scheme is going to have a substantial impact on affordability.</p>
<p>This is not to say that the budget has completely ignored the need to temper demand tensions in the property market. </p>
<p>Demand pressures can be eased via measures that target two other types of property owners – older home owners and property investors. The budget does contain measures that target both groups. Yet again, the question remains as to whether the levers are long enough to produce meaningful impacts.</p>
<h2>Targeting older owners and property investors</h2>
<p>Older downsizers aged over 65 years will be allowed to channel up to $300,000 from the sale proceeds of the family home into their super fund. </p>
<p>Many older home owners are <a href="https://theconversation.com/it-will-take-more-than-piecemeal-reforms-to-convince-older-australians-to-downsize-51043">living in larger dwellings than they need</a> after their children leave home. Helping elderly home owners – sometimes coined <a href="https://www.mediastatements.wa.gov.au/Pages/Barnett/2016/11/Strategy-to-put-WAs-last-homebuyers-first-.aspx">“last home buyers”</a> – to downsize into smaller dwellings can free up larger homes for first home buyers in earlier stages of life who are forming families. </p>
<p>However, the impediments to downsizing are many. These include financial barriers but also non-financial barriers. Importantly, most elderly home owners have strong emotional attachments <a href="https://www.ahuri.edu.au/__data/assets/pdf_file/0013/2191/AHURI_Final_Report_No217_Housing-equity-withdrawal-uses,-risks,-and-barriers-to-alternative-mechanisms-in-later-life.pdf">to their family home and local community</a>. </p>
<p>However, a lack of appropriate and affordable dwellings in neighbourhoods where older owners <a href="http://bcec.edu.au/assets/bcec-keeping-a-roof-over-our-heads-report.pdf">would like to stay</a> also poses barriers to downsizing. For downsizing reforms to be effective, financial incentives will need to be accompanied by supply-side solutions that broaden the diversity of the housing stock so older home owners’ housing preferences and needs <a href="https://theconversation.com/lack-of-housing-choice-frustrates-would-be-downsizers-60512">can be met</a>.</p>
<p>The government has not made any significant changes to tighten negative gearing or capital gains tax concessions to reduce competition from property investors. Concern has focused on the potential contraction of <a href="http://www.abc.net.au/news/2017-04-10/morrison-to-reaffirm-opposition-to-changing-negative-gearing-tax/8429638">private rental housing supply</a> should investors withdraw en masse from the private rental market. However, a longer-term perspective would take into account second-round effects. </p>
<p>As investors sell off their rental properties, more properties will become available in the market to meet demand from first home buyers. This will not only have the impact of easing tensions in the rental market as more renters become home buyers, but it will also encourage subsequent second property investment as young career-builders seek to accumulate more wealth in their property portfolios after securing their first home. </p>
<p>Such second- and third-round effects need to be incorporated more into policy thinking so that policy design rests on not just short-term, but medium-to-long-term, considerations.</p>
<h2>Is the scalpel sharp enough?</h2>
<p>The budget contains myriad demand and supply levers that directly or indirectly aim to assist young people with their first home purchase. It represents an overdue but welcome acknowledgement on the government’s part that much needs to be done to improve home-ownership prospects for first home buyers.</p>
<p>A package of measures that seeks to influence both supply and demand simultaneously in the housing market is, in principle, a sensible approach to an entrenched policy concern such as housing affordability. However, in practice, policy design matters. </p>
<p>In the case of the 2017 budget, it would appear that the scalpel will need a whole lot more sharpening if it is to make an effective incision into the housing affordability crisis that’s plaguing an entire generation of aspiring home owners.</p><img src="https://counter.theconversation.com/content/76791/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rachel Ong is Deputy Director of the Bankwest Curtin Economics Centre, an independent economic and social research organisation located within Curtin Business School at Curtin University. The centre was established in 2012 with support from Bankwest (a division of Commonwealth Bank of Australia) and Curtin University. The views in this article are those of the authors and do not represent the views of Curtin University and/or Bankwest or any of their affiliates.</span></em></p>The budget acknowledges the crisis of affordability for first home buyers, but fails to do enough about demand pressures on prices to put home ownership back within their reach.Rachel Ong ViforJ, Deputy Director, Bankwest Curtin Economics Centre, Curtin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/664102016-11-23T19:23:15Z2016-11-23T19:23:15ZReinventing density: co-living, the second domestic revolution<figure><img src="https://images.theconversation.com/files/145250/original/image-20161109-19097-1c8vi3x.jpg?ixlib=rb-1.1.0&rect=0%2C386%2C3003%2C1987&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The Collective Old Oak co-living block in London has more than 500 apartments with bedrooms and bathrooms. All other spaces are shared.</span> <span class="attribution"><a class="source" href="http://www.geograph.org.uk/photo/5046380">David Hawgood/Geograph</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p><em>This is the third piece in our series, <a href="https://theconversation.com/au/topics/reinventing-density-33081">Reinventing density</a>, co-published with <a href="http://www.alva.uwa.edu.au/community/futurewest">Future West (Australian Urbanism)</a>.</em></p>
<hr>
<p>Many housing types are totally at odds with how people live today because people don’t have as many material goods as they used to. </p>
<p>Those under 30 may not own much at all. Music is digitised and streamed (Sonos, Spotify), treasured photo albums live in the cloud or within applications (Dropbox, iPhoto), tools are pooled (Open Shed), vehicles and rides are shared (Flexicar, BlaBlaCar, Uber), there’s no landline phone or TV cable, kitchen appliances are redundant with the ubiquity of food delivery services (Foodora, Deliveroo) and pets are borrowed (DogVacay, BorrowMyDoggy). </p>
<p>The young are also likely to be renting their accommodation. Data from the Melbourne Institute of Applied Economic and Social Research reveal that barely <a href="http://fbe.unimelb.edu.au/exchange/edition3/income-wealth-stall">50% of Australians lived in a house they owned</a> in 2014. If this trend continues, many of today’s young Australians will never own their own home.</p>
<p>With transformations in digital technologies and housing-price pressures changing living habits, people will not only possess fewer physical objects in the future, but new apartment dwellers will be more likely to occupy less space at a later age. These <a href="http://www.theaustralian.com.au/business/opinion/bernard-salt-demographer/australian-house-sizes-diminish-after-gfc-peak/news-story/572e608f79e416d5798764144b1a64e2">private domestic spaces are decreasing in size</a> to become more efficient, hopefully more affordable and, for some restless millennials, more desirable.</p>
<h2>Corporatising the co-living model</h2>
<p>One model to emerge in the trend towards downsizing private domestic space is branded co-living spaces. Examples include <a href="https://www.thecollective.co.uk/">The Collective</a> (London), <a href="http://livezoku.com/">Zoku</a> (Amsterdam) and <a href="https://www.roam.co/">Roam</a> (London, Madrid, Miami, San Francisco, Tokyo, Ubud). In the corporatised co-living model, occupants rent private bedroom space (some bedrooms are as small as ten square metres) on a rolling contract for weeks or months, but share living and working spaces. </p>
<p>These collective spaces are often programmed with extracurricular activities such as yoga, business workshops, cooking classes and guest talks that promote social exchange between renters. </p>
<p>Systems of logistics, such as apps and chat platforms, facilitate the sharing of objects and space. Access to the co-living space is granted if you are part of a tribe (students, communes, families or business people). </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/141173/original/image-20161011-3909-jygem4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/141173/original/image-20161011-3909-jygem4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/141173/original/image-20161011-3909-jygem4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/141173/original/image-20161011-3909-jygem4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/141173/original/image-20161011-3909-jygem4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/141173/original/image-20161011-3909-jygem4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1131&fit=crop&dpr=1 754w, https://images.theconversation.com/files/141173/original/image-20161011-3909-jygem4.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1131&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/141173/original/image-20161011-3909-jygem4.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1131&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">China’s You+ has 25 branded branches.</span>
<span class="attribution"><a class="source" href="https://www.youplus.cc/?p=web&c=shop&a=get&shop_id=9">You+</a></span>
</figcaption>
</figure>
<p>One of the global market leaders in co-living arrangements is the Chinese <a href="https://www.youplus.cc/">You+</a>. The company has built over ten co-living spaces and claims to house <a href="http://qz.com/706409/chinas-co-living-boom-puts-hundreds-of-millennials-under-one-roof-heres-what-its-like-inside-one/">more than 10,000 people across 25 branches</a>. Private bedrooms (with bathroom) range in size from 20 to 50 square metres. The minimum stay is six months at an average monthly rent of A$470. </p>
<p>At You+, <a href="http://www.bloomberg.com/news/features/2015-12-02/why-china-s-millennials-are-happy-to-own-nothing">people over 45 are discouraged</a>. Couples with children or those who are anti-social are not permitted. Tech entrepreneurs tend to be given preference.</p>
<p>Subscribing to a co-living or dormitory arrangement such as You+ can mean lower rental costs (relative to renting a single-bedroom apartment on an above-average income), a surfeit of potential friends and a flexible rental contract. For some, this may be a genuinely desirable option. For others it may be the only option in a competitive rental market at a time when there are few affordable housing options.</p>
<h2>Blurring the public-private divide</h2>
<p>As private interior space contracts and shared domestic spaces become more common, the public realm is also changing.</p>
<p>Formerly private activities such as working and communication are occurring more frequently outside of the home, while the public sphere is taking on characteristics of interior or domestic settings: intimate spaces, interior furnishings and finishes, <a href="https://en.wikipedia.org/wiki/Pocket_park">pocket parks</a>, <a href="https://en.wikipedia.org/wiki/Guerrilla_gardening">guerrilla gardening</a>. The idea of what constitutes a home may be changing and expanding to consider urban space.</p>
<p>A lot of hyperbole surrounds the branded co-living spaces like You+ that have emerged under the so-called <a href="https://theconversation.com/au/topics/sharing-economy-7841">sharing economy</a> – also known as the communal, collaborative, inclusive, gig or social economy. But there is a tension between the realities of the model and the benevolence of the act of sharing. </p>
<p>At the behest of the property owner, co-living spaces tend to have less fixed furnishings and cheaper construction. They also have more occupants because typical apartment spaces (living room, laundry, kitchen) are compressed. Behind You+ and its ilk there are venture capitalists looking for high returns.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/141175/original/image-20161011-3903-1iz37i7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/141175/original/image-20161011-3903-1iz37i7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/141175/original/image-20161011-3903-1iz37i7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/141175/original/image-20161011-3903-1iz37i7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/141175/original/image-20161011-3903-1iz37i7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/141175/original/image-20161011-3903-1iz37i7.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/141175/original/image-20161011-3903-1iz37i7.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/141175/original/image-20161011-3903-1iz37i7.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">A dormitory room at You+ in Guangzhou.</span>
<span class="attribution"><a class="source" href="https://www.youplus.cc/?p=web&c=shop&a=get&shop_id=9">You+</a></span>
</figcaption>
</figure>
<p>Co-living arrangements are transforming the physical typologies and financial models of housing and are the latest in a long tradition of collective housing arrangements, from the kibbutz to student dormitories to share houses, <a href="http://theconversation.com/reinventing-density-how-baugruppen-are-pioneering-the-self-made-city-66488">baugruppen</a> and boarding houses. </p>
<p>With lone-person households to account for <a href="http://www.abs.gov.au/AUSSTATS/abs@.nsf/Lookup/4102.0Main+Features20Dec+2010">more than a quarter</a> of all Australian households by 2031, according to the Australian Bureau of Statistics, we need to rethink how we build collective and individual space in a denser city that reflects how many people want to live today – and tomorrow. </p>
<p>We can see that market and societal demands are pushing people towards sharing space, but many co-living arrangements do nothing to improve housing affordability in the long term.</p>
<hr>
<p><em>The Conversation is co-publishing articles with <a href="http://www.alva.uwa.edu.au/community/futurewest">Future West (Australian Urbanism)</a>, produced by the University of Western Australia’s Faculty of Architecture, Landscape and Visual Arts. These articles look towards the future of urbanism, taking Perth and Western Australia as its reference point. You can read other articles <a href="https://theconversation.com/au/topics/future-west-30248">here</a>.</em></p><img src="https://counter.theconversation.com/content/66410/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Timothy Moore does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>While some forms of co-living seek to match modern lifestyles and a desire to downsize, other profit-driven models simply exploit a lack of affordable housing alternatives.Timothy Moore, PhD Candidate, Melbourne School of Design, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/605122016-06-06T20:07:05Z2016-06-06T20:07:05ZLack of housing choice frustrates would-be downsizers<figure><img src="https://images.theconversation.com/files/125315/original/image-20160606-26007-10vshz8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Almost one in three older Australians would like to downsize to reduce the demands of maintaining their garden, but many can't find alternative homes to suit their needs.</span> <span class="attribution"><a class="source" href="http://www.shutterstock.com/pic-1542529/stock-photo-senior-man-mowing-the-lawn-with-a-lawnmower.html?src=xwHq7kD02QBPQ0exzXy5TQ-1-76">Pierdelune from www.shutterstock.com</a></span></figcaption></figure><p>Australia’s housing stock is not meeting the demands of older Australians, according to a <a href="https://business.curtin.edu.au/wp-content/uploads/sites/5/2016/06/bcec-keeping-a-roof-over-our-heads-report.pdf">new report</a> released today by the <a href="http://business.curtin.edu.au/our-research/centres-and-institutes/bankwest-curtin-economics-centre/">Bankwest Curtin Economics Centre (BCEC)</a>.</p>
<p>The report features findings from a BCEC Housing Affordability Survey, which captures the housing experiences and affordability perceptions of more than 4,300 people across New South Wales, Western Australia and Queensland.</p>
<p>Older householders aged 55 years or over were asked a series of questions relating to downsizing, including motivations and barriers. Around 16% of those aged 55 to 64 and one-quarter of those aged 64 or over reported they had already downsized. The most commonly cited reasons for downsizing, as shown in the figure below, were to live in a smaller house that is easier to maintain and to reduce housing costs. </p>
<p>Older Australians want options that allow them to downsize in areas that suit their lifestyle. This includes being close to family and friends while having access to quality amenities. </p>
<p><strong>Main reasons for downsizing</strong></p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/125300/original/image-20160606-26003-1j0d161.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/125300/original/image-20160606-26003-1j0d161.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=409&fit=crop&dpr=1 600w, https://images.theconversation.com/files/125300/original/image-20160606-26003-1j0d161.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=409&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/125300/original/image-20160606-26003-1j0d161.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=409&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/125300/original/image-20160606-26003-1j0d161.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=514&fit=crop&dpr=1 754w, https://images.theconversation.com/files/125300/original/image-20160606-26003-1j0d161.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=514&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/125300/original/image-20160606-26003-1j0d161.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=514&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<h2>A growing mismatch between housing stock and demand</h2>
<p>Among those aged 55 years or over who had not downsized, more than 80% said they would certainly do so in the future. However, around 40% of those who had not downsized felt there weren’t enough suitable or affordable housing options in the areas where they would choose to downsize.</p>
<p><strong>Perceived barriers to downsizing</strong></p>
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<img alt="" src="https://images.theconversation.com/files/125303/original/image-20160606-26010-10q9jmn.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/125303/original/image-20160606-26010-10q9jmn.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=267&fit=crop&dpr=1 600w, https://images.theconversation.com/files/125303/original/image-20160606-26010-10q9jmn.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=267&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/125303/original/image-20160606-26010-10q9jmn.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=267&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/125303/original/image-20160606-26010-10q9jmn.PNG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=335&fit=crop&dpr=1 754w, https://images.theconversation.com/files/125303/original/image-20160606-26010-10q9jmn.PNG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=335&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/125303/original/image-20160606-26010-10q9jmn.PNG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=335&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<p>This identifies a mismatch between demand and existing housing stock. And it’s likely to get worse, with the proportion of older and lone-person households <a href="http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/3236.0Main%20Features42011%20to%202036?opendocument&tabname=Summary&prodno=3236.0&issue=2011%20to%202036&num=&view=">set to increase significantly</a> over the next 20 years. </p>
<p>Most of Australia’s dwelling stock is made up of separate houses with at least three bedrooms. Small dwellings with one or two bedrooms are still relatively scarce. </p>
<p>According to <a href="http://www.abs.gov.au/websitedbs/censushome.nsf/home/data?opendocument&navpos=200">the 2011 Census</a>, three-quarters of the nation’s dwelling stock is made up of separate houses, compared to just 14% flats, units or apartments. There are, however, some stark differences across cities. </p>
<p>Census data show that more than 25% of Sydney’s housing stock is made up of flats, units and apartments. Other cities lag behind. In Melbourne, only 15% of the housing stock are flats, units and apartments, in Brisbane 12% and in Perth only 9%.</p>
<p>Semi-detached, row or terraced houses provide smaller alternatives to the detached house. Yet, with the exception of Perth, the proportion of such dwellings is even lower than flats, units and apartments.</p>
<p>The lack of housing diversity compels older Australians to continue living in larger dwellings than they would prefer, and often for longer than they would prefer. </p>
<p>In Western Australia, where four out of every five dwellings are separate houses, <a href="http://business.curtin.edu.au/wp-content/uploads/sites/5/2016/02/bcec-securing-our-future-report-230216.pdf">more than one-quarter</a> of households aged 55 years or over live in dwellings with three or more spare bedrooms. </p>
<h2>So, what housing solutions are possible?</h2>
<p>As population ageing drives a long-run demand for smaller dwellings, the mismatch between preferences and housing supply will grow unless a significant shift in the diversity of dwellings happens across the country. </p>
<p>This does not simply mean delivering more one-bedroom apartments. Increasing dwelling diversity takes time, planning and commitment. Strategic planning documents across the country recognise the need for change, yet the housing market in its current form appears unable to deliver diverse, affordable housing options on anything close to a sufficient scale.</p>
<p>The lack of suitable homes is not the only factor that discourages older Australians from downsizing. The BCEC Housing Affordability Survey shows that 58% of would-be older downsizers thought the costs of downsizing – such as stamp duty and real estate agent fees – were simply too high to make downsizing worthwhile.</p>
<p>Making downsizing less costly is likely to be “doubly beneficial”. This is because it would free up existing housing stock for younger families, thus revitalising an ageing housing stock, while allowing older households to reduce their housing costs. Stamp duty reforms targeted at older Australians, such as those already implemented in <a href="https://extranet.sro.vic.gov.au/SRO/SROCalcs.nsf/concession?OpenForm">Victoria</a> and <a href="http://www.revenue.act.gov.au/home-buyerassistance/pensioner-duty-concession">the ACT</a>, would remove a significant barrier to downsizing and potentially deliver benefits to the economy.</p>
<p>However, tax reforms must be accompanied by flexible housing solutions. These need to increase the supply of diverse housing forms, not just in terms of house type but also tenure, in the locations where older people want to live.</p>
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<figcaption><span class="caption">This ‘vertical village’ in Singapore was named World Building of the Year 2015 at the World Architecture Festival.</span></figcaption>
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<p>Older Australians want innovative solutions that offer more than traditional retirement housing options. <a href="http://www.smh.com.au/business/property/welcome-to-the-vertical-village-20120325-1vshu.html">Vertical villages</a>, which offer activated internal corridors, flexible living spaces and areas to entertain the grandchildren, <a href="http://www.afr.com/real-estate/commercial/australian-unity-to-build-vertical-retirement-village-20150128-130qyj">are starting to appear</a>.</p>
<p>Alternative tenure options such as the <a href="http://www.lda.act.gov.au/en/land-rent-scheme">“land rent” model</a> create housing solutions in which costs are reduced because the occupant does not need to buy the land.
Such models represent forward thinking, but existing policy settings present major challenges to such innovation. </p>
<p>Governments need to work with industry to deliver solutions that meet the housing needs of older Australians. These solutions are required now more than ever.</p>
<hr>
<p><em>The authors would like to thank Amity James, of Curtin University, for her contributions to the administration and analysis of the BCEC Housing Affordability Survey.</em></p><img src="https://counter.theconversation.com/content/60512/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Rachel Ong is Deputy Director of the Bankwest Curtin Economics Centre, an independent economic and social research organisation located within Curtin Business School at Curtin University. The centre was established in 2012 with support from Bankwest (a division of Commonwealth Bank of Australia) and Curtin University. The views in this article are those of the authors and do not represent the views of Curtin University and/or Bankwest or any of their affiliates.</span></em></p><p class="fine-print"><em><span>Alan Duncan is Director of the Bankwest Curtin Economics Centre.
</span></em></p><p class="fine-print"><em><span>Steven Rowley is Director of the Australian Housing and Urban Research Institute's Curtin Research Centre. He receives funding from the Australian Housing and Urban Research Institute and the Bankwest Curtin Economics Centre. </span></em></p>Australia’s housing stock is not meeting the demands of older Australians, according to a new report.Rachel Ong ViforJ, Deputy Director, Bankwest Curtin Economics Centre, Curtin UniversityAlan Duncan, Director, Bankwest Curtin Economics Centre and Bankwest Research Chair in Economic Policy, Curtin UniversitySteven Rowley, Director - Australian Housing and Urban Research Institute - Curtin Research Centre, Curtin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/426862015-06-04T20:09:39Z2015-06-04T20:09:39ZThe Terminator as boss: why mass sackings don’t work<p>Malaysia Airlines recently appointed a new CEO, <a href="http://www.smh.com.au/business/aviation/malaysia-airlines-terminator-begins-hard-reset-20150601-ghe9ut.html">Christoph Mueller</a>, to turn around its failing fortunes. After the dual tragedies of 2014, and even before, the organisation has been struggling. Its traumatised employees have had much to deal with, but even they were probably surprised to be fired en masse last week.</p>
<p>Living up to his nickname “The Terminator” (earned as CEO of European airlines) – Mueller terminated all 20,000 Malaysia Airlines staff before offering a lucky 14,000 new contracts to rejoin the downsized firm. His intentions are certainly clear - his way of turning around the organisation is to remake it from the ground up, according to his own predilections. There is no sense of collaborative decision making or plurality. Nobody can have any misunderstanding of who is the boss.</p>
<p>The aviation industry is more prone to this type of “shock therapy” than most. Legacy carriers like Malaysia are confronted at home and abroad by new airlines with radically different internal economies. Malaysia Airlines has the misfortune of being co-located with Air Asia, one of the world’s fastest growing low cost airlines.</p>
<p>The airline’s owner and board hope that Mueller will turn things around - but experience and <a href="http://sloanreview.mit.edu/article/which-way-should-you-downsize-in-a-crisis/">much evidence suggests</a> his dramatic actions are likely to fail.</p>
<h2>Willingness to fire</h2>
<p>In the 2009 romantic comedy cum drama, “Up in the Air”, George Clooney’s character Ryan Bingham flies around the US firing people – a task that those peoples’ bosses find unsettling. Happily able to distance himself entirely from the human consequences of his job, Bingham’s life obsession is reaching ten million frequent flyer miles and securing an uber rare frequent flyer card from American Airlines.</p>
<p>It is fiction, of course, in most elements of detail. For example, generally American managers have no problem firing people, and have been doing so with gusto for decades. <a href="http://www.ft.com/intl/cms/s/0/23160d12-9779-11e0-af13-00144feab49a.html#axzz3byqJdADb">As an example</a>, in 2001 Cisco fired 8,500 staff in a downsizing exercise that saw morale in the company plummet. Since then Cisco has adopted a stronger “talent management” approach to handling layoffs and economic downturns, however long term damage was clearly done. As in all things, Australia and indeed much of the rest of the world follow closely and invariably US trends. Downsizing is a <a href="http://www.emeraldinsight.com/doi/full/10.1108/IJM-04-2013-0076">central element of corporate cultures</a> in most western nations.</p>
<h2>Chainsaw Al</h2>
<p>The most celebrated corporate “toe cutter” in modern times is quite probably Al “Chainsaw” Dunlap. Dunlap made his name cutting a swathe through various US corporations. He went on to live in opulence in a Florida mansion reportedly replete with <a href="http://www.bloomberg.com/bw/magazine/the-stack-the-psychopath-test-by-jon-ronson-07212011.html">“sharks and lions and panthers and eagles and hawks, and a lot of gold”</a>. Clearly not in the business of challenging stereotypes, Al knew his place as King of the Jungle. </p>
<p>In a way, Dunlap’s unbridled behaviour was the entailment of American capitalist triumphalism central to Reagan’s America. Business is war - and while enemies are out there competing against us, they also work just down the hall. Those fired deserved no more than what’s legally necessary, while he deserved no less than the millions he was paid to transform his realms. </p>
<p>Dunlap, however, is a cautionary tale for those shareholders who made the mistake of trusting him - including Australia’s own <a href="http://www.abc.net.au/4corners/content/2009/s2711781.htm">Packers</a>. He was later permanently barred from serving as a director of a public company due to <a href="https://www.sec.gov/litigation/litreleases/lr17710.htm">fraud</a> and was cited as an exemplar of the modern <a href="http://www.forbes.com/sites/jeffbercovici/2011/06/14/why-some-psychopaths-make-great-ceos/">corporate psychopath</a>. This goes a long way to explaining his cavalier approach to those he employed - it’s likely the impact his decisions had on their wellbeing quite simply did not enter his mind. </p>
<p>Herein lies an interesting paradox – businesses are first and foremost groups of people. To survive in business, the first priority is the management of relationships. Treating your employees like cannon fodder might create some short term gain, but at what medium and long-term cost?</p>
<h2>The evidence</h2>
<p>The phenomena of downsizing has been well researched, and it is found to almost inevitably fail in any of its stated aims. </p>
<p>Meta-analyses of downsizing’s effects indicate that massive layoffs are bad for <a href="http://papers.ssrn.com/sol3/papers.cfm?abstract_id=952768">shareholders</a>, <a href="https://archive.ama.org/Archive/AboutAMA/Pages/AMA%20Publications/AMA%20Journals/Journal%20of%20Marketing/TOCs/SUM_2012.3/customer_uncertainty_downsizing.aspx">customers</a> and of course <a href="http://onlinelibrary.wiley.com/doi/10.1111/j.1467-8551.2010.00724.x/abstract?deniedAccessCustomisedMessage=&userIsAuthenticated=false">employees</a>. A <a href="http://www.researchgate.net/profile/James_Guthrie3/publication/211384719_Causes_and_Effects_of_Employee_Downsizing_A_Review_and_Synthesis/links/0deec5277b354d9dd8000000.pdf">major omnibus analysis</a> of recent empirical research concludes there are equivocal findings in relation to downsizing’s consequences - with negative impacts dominating. Survivors often feel guilt, especially if the processes involved in the downsizing have been arbitrary and unfair. </p>
<p>In essence, downsizing resets the relationships that are at the heart of every organisation in a negative manner - cynicism replaces trust, secrecy replaces candour and faithlessness replaces loyalty. What else could you possibly expect?</p>
<h2>A better way?</h2>
<p>A key problem with American business literature is that it is predicated on conflict. <a href="http://en.wikipedia.org/wiki/Porter_five_forces_analysis">Porter’s Five Forces</a>, for example, sees great gains to be had by weakening the relative position of your buyers and suppliers through any legal means. Workers are seen as an entity with innately conflicting priorities to shareholders. </p>
<p>Surely the way to build sustainable organisations is to treat all stakeholders with decency and respect. Rebuilding trust after downsizing is nigh impossible and so logically, downsizing is the antithesis of the organisational renewal it purports to be.</p>
<p>Managers seeking to turn organisations around would do better to try candid and open dialogue. They might not like where this leads, but at least they will secure honesty and commitment from the organisation’s employees, owners and stakeholders.</p><img src="https://counter.theconversation.com/content/42686/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Rice is a member of the NTEU and the ALP.</span></em></p><p class="fine-print"><em><span>Nigel Martin does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Malaysia Airlines is letting go 6,000 staff as it seeks to turn around its fortunes. But research shows downsizing on this scale doesn’t usually work.John Rice, Professor of Management, University of New EnglandNigel Martin, Lecturer, College of Business and Economics, Australian National UniversityLicensed as Creative Commons – attribution, no derivatives.