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13 Chapter 10 Low Income Housing

13 Chapter 10 Low Income Housing

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Sustainable Neighbourhoods Design Manual - produced by the Sustainability Institute 2009/2010
Sustainable Neighbourhoods Design Manual - produced by the Sustainability Institute 2009/2010

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Published by: Sustainable Neighbourhoods Network on Nov 29, 2010
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12/08/2012

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page 153
"While the environmental
and human health benets o green building have been widely recognized,[research reveals that] minimal increases in upront costs o 0-2% to support green design will result in liecycle savings o 20% o total construction costs – more than ten times the initial investment. In other words,an initial upront investment o up to $100,000 to incorporate green building eatures into a $5 million projectwould result in a savings o $1 million in today's dollars over the lie o the building."
 Aileen Adams commenting on "The Costs and Financial Benefts o Green Buildings," a report to Caliornia’s SustainableBuilding Task Force, October 2003.
Professor Johan Burger, Professor Mark Swilling & Jerome Lengkeek (Stellenbosch University – School of Public Management and Planning)
The CEA model (in excel) is available on the CD attached to the inside cover of this manual
 The preconceived notion
that sustainable building interventions are too expensive to be consideredor possible use in subsidy housing developments has been challenged or many years. During the pastdecade, the cost o many o these interventions has been alling rapidly, and the need or a reduction in waterand electricity use has become more acute. The result o this intersection between the questioning o old
Cost effeCtivenessanalysis of
 
lowinCome housing
introduCtionChapter 10
 
page 154
assumptions, alling costs, and growing environmental concerns has been the increased use o sustainablebuilding interventions, particularly in the commercial/industrial and high income residential sectors. However,there has been little uptake o these interventions in the low income, mixed income and subsidised housingsectors. There is thereore a pressing need or tools that can enable government ocials, developers, andhousing contractors to measure the viability o more sustainable methods o construction, particularly in theselower income sectors. A signicant step in this process was taken with the lie cycle assessment case studythat was previously published in the rst edition o the Sustainability Institute’s “Sustainable NeighbourhoodDesign Manual” (SI, 2009). It demonstrated that even a development that included a ull range o sustainableinterventions would be cost eective when measured over a 30-year lie cycle. By its very nature o being acase study, its ndings were directionally very important, albeit somewhat limited due to the use o data roma particularly expensive case. The next natural step in the process o dening nancial viability in settlements was to nd ways o ecientlycalculating the true costs o sustainable interventions over the ull lie cycle in a variety o unique situations. The need or such a tool led to the creation o the Sustainable Housing Calculator, which we will introduce laterin this paper. The rst section o the paper repeats the background inormation on the need or sustainablebuilding materials and the lie-cycle cost assessment methodology used in both the original case study andin the new sustainable housing calculator. The second section provides an overview o the unctioning o thecalculator and a section on how to use it. Finally, the paper will conclude with some o the key ndings thatwere generated by the calculator when tested with live data by the Sustainable Neighbourhoods Programmeat the Sustainability Institute in 2010.
seCtion 1BaCkground and methodology
 There is now
an emerging global consensus that unsustainable resource use (global warming, thebreakdown o eco-system services and the depletion o key renewable and non-renewable resources) willthreaten the existence o large numbers o human and non-human species. These threats have been welldocumented in several major international reports, including inter alia the impact o human-induced globalwarming (Intergovernmental Panel on Climate Change. 2007), the breakdown o the eco-system services thathumans and other living species depend on (United Nations. 2005), the depletion o oil reserves (InternationalEnergy Agency. 2008), the ecological threats to ood supplies (Watson et al., 2008), the threat o waterscarcity (Gleick. 2006; United Nations Development Programme. 2006), and the negative impacts on thepoor o the global crisis o unsustainability (United Nations Development Programme. 2007). The result is aglobal consensus that the continuation o unsustainable modes o development will need to be replaced by
 
page 155
what the Johannesburg Plan o Implementation adopted at the World Summit on Sustainable Development(WSSD) in 2002 dened as “sustainable consumption and production”. This broad ramework has led to aocus on cities because it is generally assumed that the construction and operation o the built environmentis responsible or approximately 50% o all CO2 emissions. There is a growing consensus that cities have toplay a leading role in the transition to a more sustainable socioecological regime (United Nations. 2006).Signicantly, recent empirical research commissioned by the United Nations Environment Programme (UNEP)has identied three priority challenges, namely transport, ood supplies and the construction o buildings/ urban inrastructure, which together account or more than 60 percent o total energy and materials used bythe global economy. This brings into ocus the technical aspects o the design and construction o buildings.More sustainable use o resources means reducing CO2 emissions, using less primary material resourcesand reducing unproductive waste outputs. Sustainable living is made possible when the built environment iscongured to achieve these objectives. There is, however, a common – and sometimes oensive – opinionthat sustainable built environments will remain the preserve o the afuent and/or developed economies,while minimum standard conventional housing provision remains the only aordable option or the poor. Thiscommon assumption is based on hard acts about what it costs to construct the physical structure o thehouse and related inrastructure, but it ignores the cost o operating the house over its entire lie-cycle. Thisis highly problematic in light o the act that lie-cycle operating costs are projected to rise aster than infationdue to declining supply o key input resources. The objective o this research was to demonstrate that a lie-cycle approach rather than the more traditionalonce-o capital cost approach generates results that demonstrate that sustainable living is more aordableor both the household and the tax base o the city. This has been achieved by collecting data and inormationon lie-cycle costs o both minimum standard conventional housing provision (hereater reerred to as the“current approach”) as well as a package o “sustainable living” applications. Conclusions were reachedby measuring and comparing 40-year lie-cycle cost eectiveness o the two alternatives. The results areexpressed as net present values, using a discount rate o 9%. According to Wrisberg, there are several“lie-cycle” methodologies that are in use in the world today that have emerged in response to the globaldemand or “tools” to determine the material and energy content o particular production and consumptionprocesses, as well as environmental impacts (Wrisberg et al. 2002). A “lie cycle” approach is necessary because it has become imperative to take into account the ull capitaland operational costs o a given production or consumption process over the lie cycle o the process.Without this kind o analysis it will not be possible at the design stage to determine which process willcontribute most towards achieving a more sustainable socioecological regime; or alternatively, which onewill do the least damage. However, a wide range o lie-cycle methodologies have emerged or dierentpurposes. These included the ollowing: Lie Cycle Assessment, Material Input per Unit o Service (MIPS),Environmental Risk Assessment (ERA), Material Flow Accounting (MFA), Cumulative Energy Requirements Analysis (CERA), Environmental Input-Output Analysis (env.IOA), analytical tools or eco-design, Lie CycleCosting (LCC), Total Cost Accounting (TCA), Cost-Benet Analysis (CBA) and Cost Eectiveness Analysis(CEA). It is not possible to describe and analyse these dierent methodologies here.

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