The mundanity of cost cutting: The value of small wins in affordable housing production

Abstract

Regardless of the best intentions to address the issue among policy makers, affordable housing remains one of the most underprovided assets in advanced economies, otherwise characterized by an ample supply of product offerings. The paper addressed the question of how affordable housing can be provided on basis of new housing production. The study is premised on the theoretical proposition that excellence is not primarily a matter of working “harder” or “smarter” than competitors do, but is rather an effect of small, yet discernable qualitative changes (being the basis for the management of the “mundanity of excellence”) that generate benefits and returns in excess of what may be originally expected. The value of such “small wins” are of general relevance for any organized activity or managerial pursuit. Drawing on a study of two low-cost producers operating in the Swedish market and (in one of the cases) abroad, it is shown that to make newly produced homes affordable (defined in local terms on basis of documented housing sales and their buying price), the planning, production, and sales cost need to be minimized throughout the whole process. Affordable housing is thus provided on basis of a full organizational and wider institutional commitment to serve households with limited budget headroom, and this work demands a long-term commitment to stated business objectives and enacted housing policies.