Could a circular economy help address the housing crisis?

By Tamanna Wadhwani  August 15th, 2023

In the face of dual challenges – a housing and climate crisis – a new report explores how the circular economy could reshape the way Australians live, build and consume at home, lightening the impact on our pocket and the planet.

In the midst of Australia’s pressing challenges concerning cost-of-living and climate change, a recent report by the Australian Housing and Urban Research Institute (AHURI) presents how the circular economy offers a compelling path forward. The report delves into the application of circular economy principles to the housing sector, demonstrating its ability to address both challenges of housing affordability and sustainability.  

The report’s core emphasis revolves around reimagining the housing landscape through circular practices like reducing and reusing building materials, optimising design to ensure extended lifespan and zero waste and regeneration of nature. 

Drawing learnings from four research projects encompassing neighbourhood-scale housing, apartment complexes, social housing and large-scale retrofit, and building materials supply chains across Australia’s housing sector, the report presents diverse potential solutions. Each of these sectors offers unique challenges, involving a range of activities, skills, resources, stakeholders and governance structures.  By addressing five key research questions, the report constructs a comprehensive framework for circular housing transformation, consisting of four major areas of reform: 

  • Appraising the market value of developments aligning with sustainable and circular guidelines 

  • Reshaping market practices and processes through policy and regulatory instruments 

  • Redirecting investment flows such as fiscal and financial incentives towards environmentally conscious projects 

  • Building capacity and capability for the transition by upskilling, training and knowledge sharing 

The circular economy approach offers substantial promise to landlords, developers and consumers alike and can be applied while equipping new homes or renovating existing ones. Decarbonisation and resource use efficiency are twin imperatives in making houses more affordable for people and more sustainable for the planet. 

The move to circular practices also presents a wealth of job and employment opportunities in the housing sector. According to the report, for every million dollars invested in retrofits and energy efficiency processes, between nine to 30 manufacturing and construction jobs would be created. 

However, obstacles persist. The lack of robust policy frameworks and collaboration mechanisms between planners, designers, developers and the waste disposal sector hamper the implementation of circular practices. Other challenges include high upfront costs involved in circular practices for developers, financial barriers to consumers, low incentives for sustainable projects and inadequate knowledge about circular business cases. 

Australia has a long road ahead towards circular and sustainable housing and achieving this lofty goal will require a concerted nationwide effort with all levels of government, developers, landlords, designers, consumers and training institutions working in tandem. 

A reform of current regulatory standards and policy, stricter financial and fiscal frameworks, incentives for circular housing practices, education and support for low-income households will aid in ensuring Australia’s housing sector caters to social, environmental and economic concerns. 

Read the full report at Informing a strategy for circular economy housing in Australia or visit The Policy Framework: Actions towards Circular Economy housing in Australia for a quick-reference guide.

Tamanna Wadhwani

Tamanna moved from India to Australia to pursue a degree in environmental science and conservation biology. After learning about the concept of a circular economy in 2020, she worked with various organisations in this sector and is interested in solving complex climate change and waste management problems. She loves to communicate with people about all things sustainability or animals. Outside of work, Tamanna is a budding hip hop dancer who also loves travelling, cat cuddles and reading.

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