High performance buildings and stable affordable housing - by Brett Pelletier

July 10, 2020 - Appraisal & Consulting
Brett Pelletier
Kirk&Company

Affordable housing is among the Counselors of Real Estate’s Top Ten Issues Affecting Real Estate for 2020-2021. COVID-19 has made the housing affordability challenge more widely seen and more widely felt throughout the US. Various sources cite housing shortages in the range of 7-million units across the country. According to a research brief published by CBRE last June, over the prior decade, average annual household formation totaled 1.04 million, while housing production had been only 880,000 units. Each year the US has fallen short of housing production, which adds to the existing undersupply and puts pressure on affordability. Incomes are not keeping up with increases in housing costs and while wage growth was beginning to post gains, the impact of COVID-19 will reverse that. None of this data rings as sustainable, economically, or otherwise.

Meanwhile, our own health, the health of our family and friends, and the ability to achieve health outcomes are front and center. How can we achieve health outcomes in our homes, and are our homes helping or hurting us? For some, it’s something we’ve never had to think about before. Home was where we slept and ate a meal or two in between work in an office, recreation out in public, school for the kids, time spent in the car, outdoors, at the gym, and in restaurants. Now, home, for a lot of people, IS our office, our rec center, our school, our gym, and our restaurant. The Brookings Institution suggests in a report from early June, that COVID-19 and the economic crisis that has followed is forcing everyone to consider the state of affordable housing as both a social good and an economic necessity. While the lack of an adequate safety net and response is felt unevenly throughout the economy, the critical vulnerabilities in our systems are painfully evident across economic and geographic spectrums. 

I’ve been reading, talking, and asking questions about so-called modern building technologies for about a decade and how they might help solve the affordable housing problem. From factory-built housing (FBH), which can include traditional manufactured homes, modular, panelized, and containerized construction, to high-performance building efficiency standards (HPBS) like PassiveHouse, zero-energy buildings, zero-carbon housing, and all combinations. When people think hard about housing problems and apply technology and efficiency solutions to them, better buildings are the end product. From where I sit, it has always been a no brainer from a single-family perspective and more recently it’s proving out to be a powerful force in multifamily design, construction, and operation. The friction has been focused on cost, expertise, and willingness of the established rules and regulations to accommodate something new and different. All those challenges are simple to overcome with diligence, discussion, and education. The real question to ask is ‘why aren’t we building better buildings?’

The benefits of FBH and HPBS are significant and center on construction benefits and ongoing operating benefits. Factory built housing is built, unsurprisingly, in a factory. A perfect environment for working with wood and steel and gypsum and concrete. There’s no chance of the framing or decking of the building getting soaking wet or snowed on. Perfect humidity, massive jigs, and assembly lines mean that the panels, pods, or modules are more dimensionally stable and therefore the buildings, when assembled, are less prone to settling. They require less maintenance and fewer callbacks for plaster cracks, popped calking joints, and out of square doors and windows. Less waste and reliance on fossil fuels are a major benefit. When coupled with the high-performance building standards that supercharge insulation, all but eliminate air leakage, reduce thermal bridging, and site buildings and align windows for maximum passive energy transfer in winter and minimum passive energy transfer in summer, these buildings rely less on large HVAC systems and instead focus on conditioning indoor air, cleaning it, and keeping it in the building. 

These buildings have significantly better indoor air quality because of the climate-controlled factory environment and the heat/energy recovery systems that handle and filter indoor air. Better indoor air quality is important to respiratory health. The buildings are quieter and more comfortable and have a significantly reduced energy load, which can be further offset by renewable energy sources like PV solar arrays. PassiveHouse often cost only 3%-5% more than standard construction and can contribute to significant operational savings well in excess of the additional cost burden. 

While these methodologies are generally employed in new construction, adaptive reuse and retrofits are on the rise. Where there’s a will, there’s a way. At the end of the day, better buildings that last longer, cost less to operate, and provide superior health outcomes to residents should be an easy sell. 

In a recent talk to members of the National Housing & Rehabilitation Association (NH&RA) David A. Smith outlined his concept of health-secure housing (HSH) which implies that “once you’re inside the front door, you’re health-safe.” It is a highly complex issue that needs further discussion and action by people far smarter than I, but at its simplest, HSH forces us to think about our own housing security and health. It is widely recognized that the poorer your housing is, the poorer your health is. Access to good quality housing and health outcomes are related. Now, more than ever, our homes are not just a place to sleep and we should all be involved with the conversation around housing affordability and what it means to each of us, our neighbors, and the health and economic wellbeing of the country as a whole. How tenuous is the grip on our own housing security and our own health within our homes? Was the answer to that question different six months ago? Food for thought.

Take care of yourself. Be helpful and kind always. Think about what you can do for others and what that might mean to them.

Brett Pelletier is chief operating officer with Kirk&Company, Real Estate Counselors, Boston, Mass.

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