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HUB addresses the current and endemic lack of integration between public sector housing needs, private sector funding, construction sector design, construction and on-going maintenance.
This lack of integration is resulting in inefficient use of labour, wastage of building materials, high costs of construction, high maintenance costs, and uncertain and returns for investors.
HUB’s underlying principles represent a departure from the way in which community development and housing is currently being delivered in New Zealand.
HUB’s 1st Principle is around measuring affordability against recognised international standards.
HUB’s supply chain philosophy is not based on extracting higher margins by squeezing suppliers or compromising quality agreements. Instead, HUB structures cost and value combinations to meet client social value drivers and investor returns.
The price point for affordable housing is based on the Median Multiple – a house-price-to-income multiple, and an internationality recognised measure of housing affordability. It is referenced in Agenda 21 Chapter 7 of the United Nations Framework and is the ratio between median house price and median annual household income.
The World Bank states that this ratio is “possibly the most important summary measure of housing market performance, indicating not only the degree to which housing is affordable by the population, but also the presence of market distortions”.
A median multiple of 3 TIMES is considered a very good marker of housing affordability. HUB targets affordability using this principle for each geographic location, and – as such – affordability is tailored to each location’s local economic circumstances.
HUB’s 2nd Principle is with regards to the collaborative management of costs and creating a secure, take-cost-out environment.
The HUB creates the environment whereby supply chain members apply all their skills to take out cost and waste whilst enhancing quality. This is achieved by protecting pre-agreed percentage margins, and against this backdrop of security continuous improvements are identified to reduce development costs and achieve the targeted affordability points.
Under this secure long-term working-environment the supply chain collaborates to reduce wastage and inefficiency whilst maintaining profit and overhead recovery margins.
HUB’s 3rd Principle is around utilising pre-established best value supplier relationships to create best value.
The way in which products and services are procured has a profound effect on cost and affordability. Long-term relationships provide performance improvement opportunities by establishing over time more effective collaborative relationships, and by developing collective expertise in design and building systems.
HUB supply chain members are selected on their ability to deliver value based on pre-established whole-life cost benchmarks.
HUB’s 4th Principle encompasses an integration of all project activities.
HUB incorporates strategic, long-term partners on pre-agreed contractual terms that incorporate continuous improvement targets. Through the HUB the client does not appoint design consultants, then contract with construction suppliers and then a different set of maintenance suppliers. This sequential approach does not promote integration and fails to realise the benefits of integration – resulting in inefficiencies and lack of affordability.
Within the HUB supply chain maintenance contractors are central in influencing design and specification. Construction and maintenance delivery are also more predictable as the integrated contractor supply chain members and cluster leaders have, from project initiation, been closely involved in the earliest stages of design and specification.
HUB’s 5th Principle guides integrating continuous improvement and affordability through leadership.
Continuous improvement and affordability improvement are centred upon the implementation of more efficient processes to achieve an even lower price for future projects.
HUB continuous improvement processes are characterised by placing a greater emphasis on planning, and tailoring design, build, fund, manage and operate processes in a manner that is compatible with client priorities.
HUB’s 6th Principle is with regards to mortgage availability, and support to transit from tenant to owner.
Personalised mortgage solutions are integrated with HUB’s delivery model. These provide a solution that goes beyond the norm: seeking to enhance affordability through the introduction of a menu of personalised support mechanisms, to enhance affordability for the occupier whilst reducing associated investment risks.
All applicants progress through a mandatory 12-week budgeting course prior to purchase. The purpose of this course, which is delivered and monitored by Mylend, is to upskill clients on day-to-day costs and how to have good “account conduct” for the banks prior to getting a home loan, and ongoing for life of loan.
In addition, HUB’s structure includes:
HUB’s 7th Principle is around integration of local social enterprise organisations to deliver services at the local level by other social businesses
HUB is designed around people who are committed to delivering true and measurable housing affordability, and developing sustainable and supportive communities. These communities are served by local social businesses that are committed to the self-empowerment of individuals and families.
This is achieved through the HUB supply chain of social enterprise organisations who provide services and support for the members of our society characterised as:
HUB’s social enterprise supply chain is designed to enable the above to capture a necessary part of the HUB value chain. In so doing, the recipients of these HUB services will over time create even more value through their subsequent and more effective economic activities.
