Zero Carbon Leasehold


Build a zero-carbon house - but don't buy the land.

How this will impact Adelaide's carbon emissions

One of the biggest barriers to low-carbon building are the higher up-front costs involved, even if the energy savings eventually pay for those costs in the long run. What if that initial cost for your house was significantly lower? What if you only needed to find the funds for buying or building a low-energy house, but not for the land?

Sounds like fiction? It isn't. It's called a leasehold development, and it is common in the Netherlands ('Erfpacht') to make the step onto the housing ladder easier and more affordable for first-time buyers. It also used to be the main way of building houses in 19th-century England. It has also been trialed in Canberra with success.

The proposed idea is to set up a pilot project of a zero carbon leasehold development in Adelaide. Plots of land would be made available for first-time buyers to build a house. Initially there would be no fee for the land, but they would pay an annual ground rent. The land ownership would be held by a non-for-profit housing provider. Their income to cover the land mortgage and maintenance would come from the ground rent.

The key condition would be that the houses need to be zero carbon and also use a certain percentage of local materials. International standards such as 'Living Building Challenge' and the 'Passive House Standard' can be used as measures. This condition is likely to increase the cost of building the houses. According to the Passive House institute, a zero carbon house is achievable to construct for about 10% more than a code-compliant house. However, the first-time buyers would not need to pay anything for the land up-front which usually makes up at least 50% of the construction cost. The ground rent they would pay could at least be partly offset by zero energy bills.

The idea would impact on Adelaide’s carbon emissions by setting an example that could help transform the industry. If the pilot project is successful, it would set a precedent that others could follow.

The main benefit is to lower the threshold to zero carbon building and home-ownership for first time buyers. Normally the focus is on the total cost and the houses are built as cheaply as possible. With the land taken out of the initial costs, the focus would shift to the quality of the product being purchased.

Voting has now closed for the Wildcard prize. Stay tuned to find out which project will be the 11th finalist.


Comments closed

Bridgette Dunn

10 Jul 2016

Hi - I'm currently living in community housing (common ground Adelaide CBD) and would love to know if this is something for CBD or outerlying areas. My son is at CBC so we need to stay in the city.. Thanks