Sustainable housing has wider environmental, social and wellbeing benefits which do not neatly fit into traditional economic considerations. Policy makers must adapt the way they develop minimum performance regulations if we are to move beyond the argument about capital costs and deliver a transition to low carbon housing.
Since the 1970s oil crises, energy efficiency has been on the agenda. Housing accounts for a sizeable chunk (10-25%) of greenhouse gas emissions in developed countries. Report after report suggests there is ample scope for cost-effective improvement through energy efficiency and renewable energy generation.
Yet, a commonly touted barrier to achieving these changes is the high cost of sustainable housing.1 Various vested interests claim that build and retrofit costs are high and savings are indeterminate. While the argument rages over cost-effectiveness, almost all sides seem to be missing the main game: There are a raft of other non-economic environmental, social and wellbeing benefits that make sustainable housing a more compelling and affordable policy response.
In this article we discuss the arguments for and against increasing sustainability standards in housing performance, and point out the often unacknowledged benefits of sustainable housing through a mixed methods evaluation of a low-carbon housing development in Victoria, Australia.2 Our analysis makes the case for combining traditional Cost Benefit Analysis (CBA) with other social science methods to reveal the true costs and benefits of sustainable housing.
Beyond Minimum Standards
Minimum standards based regulations specify building elements such as insulation levels, energy labelling of appliances, and the general specifications of building design and materials. Generally, building energy performance regulations focus on improving the building “skin” or thermal envelope, to reduce the energy required for heating and cooling. These regulations have seen increasing sustainability requirements over the past decade or two, but current minimum requirements are still significantly below the performance required to deliver low/zero energy housing.3 They have also been heavily criticised for the assumptions they make about how occupants use energy in the house and for not including technologies such as energy generation.
There are increasing examples of low/zero energy housing developments around the world such as Park Dale (Wakefield, UK)4 and Lochiel Park (Adelaide, Australia).5 These developments are demonstrating what is possible for new builds or retrofitting of existing dwellings. Moving from one off examples to mass production of low energy housing continues to be a significant challenge. In countries like Australia, the majority of new housing (and retrofits) is delivered to minimum regulatory requirements. Therefore, improving these regulations is critical to delivering improved sustainability across the residential sector.
Arguments for improving building regulations, and in turn sustainable housing outcomes, often come down to the claim of additional capital costs related to any additional “sustainability” requirements. Even in the face of increasing evidence that low energy housing does not necessarily cost more upfront, the perception that it does is holding back regulatory development in the face of housing affordability challenges around the world.
However, the argument that sustainable housing adds an unreasonable capital cost to housing fails to consider the through-life benefits that such housing provides. Research is increasingly demonstrating a range economic, social and environmental benefits associated with low energy housing. For example, households living in sustainable housing have lower (or eliminated) energy bills which help control living costs and reduce the risk of energy poverty – an increasingly important outcome in the context of rapid utility price increases occurring around the world.6 There is also increasing research highlighting improved health and wellbeing outcomes from low energy housing such as reduced stress from paying energy bills, reduced temperature related health issues, and improved mental wellbeing.7 These benefits have been found to be even greater for low-income or vulnerable households.8
The problem is that policy makers increasingly require hard monetised benefits in, say, health care savings, if sustainable housing beyond minimum standards are to be justified. Without a defined economic cost, and with contingent, long-term or flow-on effects, such benefits are not easily captured in traditional policy making evaluative tools such as CBA. As a result, policy analysis often wrongly concludes that zero carbon housing is unaffordable.
If these wider benefits can be properly considered the justification for zero carbon housing becomes clearer. Our three-year, mixed-method evaluation of a small sustainable housing development in regional Victoria, Australia demonstrates these benefits.