The Optimum Timing and Maximum Impact of Full Rehabilitation of New Zealand Housing Stock

Abstract

The author develops a simulation model to estimate the optimum timing and maximum impact of full rehabilitation of New Zealand housing stock. The model is based on the theories of classical population dynamics. Data used in the model include empirical estimates of the mortality of New Zealand housing stock, assumed schedules of depreciation of dwelling services, and assumed schedules of annual maintenance costs. The dwelling service years provided by dwellings serve as a proxy for benefits of rents or imputed rents (excluding rent for land). The cost to construct one dwelling and fractions thereof serve as a proxy for costs of maintenance, rehabilitation, replacement, and new construction. Optimum timing of rehabilitation can increase the quantity of benefits provided by the housing stock per unit total cost but a reduction in the growth rate of new dwellings has a greater impact in achieving the same objective. A stationary and stable housing stock can provide 45% more dwelling services per unit total cost than a housing stock which doubles in size every 35 years.