Valuing Deliberate Built-in Flexibility in Houses – Exampled

Abstract

Housing requirements commonly transition over time, and there are financial, social and environmental impacts associated with altering and moving houses. With possible future alteration in mind, this paper looks at the viability of deliberately incorporating flexibility into houses at the time they are designed and built, as compared with no specifically incorporated flexibility (yet still possibly capable of being altered). A comparative analysis, rather than an absolute analysis, is outlined. The financial viability is performed as an options analysis, while the social and environmental matters are evaluated along life cycle assessment lines. As a case example, the paper considers the viability of incorporating deliberate two-storey flexibility into a single-storey house using Australian practices. It is shown on the case example that incorporating deliberate built-in flexibility can perform positively against all sustainability criteria -financial, social and environmental, separately or combined -however the generality of this conclusion remains to be proven.

Valuing Sustainability of Adaptable Infrastructure Using ROA-SEC: A Hybrid Approach

“…For example, Fawcett et al (2014) evaluate costs and environmental impacts of flexible infrastructure, using Monte Carlo simulation with abovementioned limitations, while ignoring the social aspect. Carmichael and Taheriattar (2018) suggest LCA approach combined with ROA to reveal the potential for enhancing financial viability of adaptable infrastructure by inclusion of both social and environmental issues. However, the uncertainty of social and environmental intangibles is not incorporated in Carmichael and Taheriattar (2018), the uncertainty of social and environmental intangibles is not incorporated.…”

“…Carmichael and Taheriattar (2018) suggest LCA approach combined with ROA to reveal the potential for enhancing financial viability of adaptable infrastructure by inclusion of both social and environmental issues. However, the uncertainty of social and environmental intangibles is not incorporated in Carmichael and Taheriattar (2018), the uncertainty of social and environmental intangibles is not incorporated. Hence, this paper aims to fill the literature gap by presenting an approach that integrates all sustainability aspects and captures the uncertainty to value designed-in adaptability infrastructure.…”

“…Thus, developers are caught in a dilemma to whether or not design infrastructure for adaptability. This implies the notions of non-designed-in (or fortuitous) adaptation versus designed-in (or in-built) adaptation (Carmichael and Taheriattar, 2018) -where an option, a right but not an obligation, is embedded in design to accommodate uncertain changes (Wang and de Neufville, 2005). The latter, which is the focus of this paper and compared against the former, often requires or is perceived to require extra upfront cost and effort.…”

“…Real Options Analysis (ROA) is used to evaluate financial viability of investing in adaptable infrastructure (Carmichael et al, 2011;Copeland and Antikarov, 2001), but disregards social and environmental aspects. A few attempted considering sustainability issues in adaptability valuation using LCA tools (Carmichael and Taheriattar, 2018;Fawcett et al, 2014;Moffatt and Russell, 2001), while still have limitations in terms of incorporating uncertainty or interpreting the results (Fawcett et al, 2014).…”

Valuing Sustainability of Open Plan Buildings: A Case Study

“…Also, enormous investment is predicted to be made in construction of new buildings, which can be equipped with built-in adaptability to facilitate easier and cheaper refurbishments.Building adaptations also cause environmental and social issues associated with resource consumption as well as disruption to building operation, raising a significant sustainability issue. As a result, deliberate adaptability has been introduced with the aim of enhancing sustainability (Gann & Barlow, 1996;Carmichael & Taheriattar, 2018…”