Sustainable building renovation – strategies and processes

Introduction

The need for building renovation is receiving increased attention in many countries around the world. One reason for this is an ageing building stock. Another reason is the urgent need to reduce energy consumption and greenhouse gas emissions in buildings.

The UNFCCC Paris Agreement at COP 21 in 2015 agreed on limitation of the global temperature increase to 1.5 °C above pre-industrial levels by 2050. This requires a fast transition to renewable and fossil free energy. Reaching the goal won’t be feasible without reducing the energy demand where possible and this also applies to buildings. Globally, the building sector accounts for approximately 28% of total energy-related CO₂ emissions (IEA 2019). Therefore, a major contribution to achieving emissions reductions must come from renovation of the existing stock to increase insulation and changing the building services (heat, cold, ventilation, electricity) to carbon free systems. Insights in the energy efficiency of residential buildings in Europe and the monitoring of the progress of renovation can be found in a special issue of Energy and Buildings (Visscher et al. 2016). The rate of renovation needs to speed up and the renovations should be deeper (IEA 2019). Deep renovation is addressed further on in this article. Central and local governments all over the world are translating the carbon reduction goals to policies and action plans for retrofitting the existing building stocks. As a concrete example, the European Commission presented October 2020 an integrated policy and support action “A Renovation Wave for Europe - greening our buildings, creating jobs, improving lives” (EC 2020). The plan describes the high aimed goals and huge challenges and barriers to overcome for the European building stock. It makes clear that research and innovation will be needed to overcome the barriers. (Wade & Visscher 2021)

There is at the same time a need to upgrade many buildings to improve the quality of life – social sustainability, and to increase productivity in the building process to ensure affordable housing – economic sustainability. Research in Sustainable Building Renovation (SBR) has also increased. An editorial article by the first guest editor of this special issue included a proposal for a research agenda for SBR based on a review article (Jensen et al. 2017, 2018). The identified research gaps and needs for new research are summarized below. This special issue of Construction Management and Economics aimed at publishing new research which contributes to or supplement this research agenda.

The barriers for SBR have been studied broadly and the drivers for SBR are also quite well researched. The barriers can be divided in economic and informational aspects. Among the economic barriers is the landlord/tenant’s dilemma (Ástmarsson et al. 2013). Building renovation is mainly initiated because there is an accumulated backlog of maintenance and degraded/outdated building components. Thus, to promote sustainable renovation including energy improvements, financial incentives are important drivers, but it is also important to take various stakeholders’ different interests into account. There is a need to develop new instruments to increase the volume of SBR and methods to evaluate such instruments.

The focus of most research on building renovation has so far been on deep renovation. Deep Renovation or Deep Energy Renovation is a term for a renovation that captures the full economic energy efficiency potential of improvement works, with a main focus on the building shell, of existing buildings that leads to a very high-energy performance (Global Buildings Performance Network 2013). Such renovations are encouraged in European energy policies (EU 2016, EC 2020). A main argument for deep renovations is that they are a necessity to achieve radical improvements in energy efficiency. However, recent research in Sweden has observed a trend of housing associations moving towards applying partial or over-time renovation strategies (Femenías et al. 2018). There is a need for research on the diversity of current and potential new strategies for SBR including renovation over time (Fawsett 2014), and of both singular building projects, portfolios of buildings and districts.

The renovation process has been studied in several research papers, but mostly in terms of case studies and dominated by preconceptions of rational decision-making and development of normative guidelines. There are only few examples of broader cross-sectional research studies investigating specific aspects of renovation processes among a larger sample of projects, companies, professionals and/or countries. One example is the study by Gluch et al. (2018). There is a need for more in-depth descriptive and cross-sectional studies of SBR processes in practice to reach a deeper understanding of the different sub-processes of renovation, for instance collection of data on buildings before renovation, the actual use of tools in different renovation sub-processes, the characteristics of processes for different building types and organizations.

The organization of SBR projects has only been researched to a very limited degree and there have been limited attempts in practice to develop new forms of organization of SBR. Outside of building renovation, there have been recent studies that examine new form of cross-sectoral collaborations to drive social value through construction projects (e.g. Barraket and Loosemore 2018). There is thus scope to draw inspiration from these studies to feature research that can support increasing the performance of SBR, for instance, by improved collaboration across the value chain and across sectors with more learning across projects and companies. The application of relational contracting seems a promising direction for further development of building renovation.

There have been intensive research and development of tools and systems to support decision-making, design and evaluation of SBR projects (see e.g. Mjörnell et al. 2014, Malmgren and Mjörnell 2015, Malmgren et al. 2016), but only few with a focus on portfolios of projects. Exceptions are Nielsen et al. (2018), Österbring et al. (2019) and Nägeli et al. (2019). Moreover, the methods for evaluation of social sustainability are underdeveloped, as well as consideration for architectural and historic values (Thuvander et al. 2012), and there is a lack of integration of evaluating the different pillars of sustainability. Only a few attempts to integrate different values can be found, as in Serrano-Jiménez et al. (2021). There is a need to develop more holistic methods for prioritising and evaluating SBR.

While there has been a stronger technological emphasis in previous studies on SBR, there is growing interest in taking into account the perspectives of building users (see e.g. Mangold et al. 2016, Buser and Carlsson 2017, Tjørring and Gausset 2019). This more social viewpoint is critical as there is a need for more research that can support a pull from the demand side, including building owners, facilities managers and end-users to disclose and drive unfulfilled needs and new opportunities.

The increased political focus on SBR makes it important to investigate and demonstrate the contribution that SBR can have in relation to solving important societal challenges, for instance, in relation to UN’s Sustainable Development Goals, climate change, energy transition, circularity, industrialization, digital transformation, affordable housing provision and equality, heritage preservation, social value and quality of life.

Papers in the special issue

Five papers were accepted for the special issue.

Jowkar et al. (2022) present a paper on barriers and motivations for renovating and retrofitting residential buildings. The study takes a house-owners’ perspective with a holistic approach to sustainability covering both environmental, social and economic aspects. It is based on a questionnaire survey with 341 citizens in a city in Norway. The results confirm that economic issues are the main barrier for SBR and different forms of financial support are suggested to resolve this barrier. The paper discusses the role of urban Facility Management (FM) in promoting SBR and points to the need for an intermediary role to engage citizens to co-create their needs for SBR in urban areas together with public/private sectors. A novelty of the paper is the urban level perspective on SBR and collaboration between house-owners and both public and private sector.

Le et al. (2022) focus on collaboration in managing state school properties in New Zealand with participants combining their abilities to solve challenges and achieve common goals for SBR. This involves multiple stakeholders with a diversity of knowledge. The research aims to develop a collaboration maturity model with process areas, criteria in each process area and rating levels. The criteria were identified from interviews with school managers and then used in a questionnaire survey to investigate the maturity levels of criteria in the collaboration. The study identifies problem areas and discusses possible improvement initiatives regarding staff training, funding allocation, reporting system and information technology. A novelty of the paper is the focus on management of property and SBR on a national level.

Brahmi et al. (2022) focus on management and collaboration supported by sophisticated technologies for SBR of heritage buildings. The research aims to assess the application of Integrated Project Delivery (IPD) strategies and tools through Building Information Modelling (BIM), determining shared collaborative practices across projects. The research adopts a mixed methodology triangulating the collected data from four heritage cases in different countries. The study explores the potential use of IPD and BIM and develops an analytical framework consisting of a set of defined variables including 50 criteria, classified into 15 categories, and grouped into five thematic strands (people, process, policy, technology, and product). The findings reveal that the simultaneous use of IPD and BIM allows for the integration of heritage values into holistic decision-making frameworks attaining high-performance outcomes in heritage renovations. A novelty of the paper is the integration of IPD and BIM in collaboration and decision-making on SBR in heritage buildings in different countries.

Hu et al. (2022) present a study on the cost of energy retrofit of residential buildings with particular focus on cost variance. Energy-efficient buildings are often characterised by higher construction costs and there is a large cost variance, especially in retrofit projects. This is seen as a barrier for the adoption of energy retrofit practices. The research includes a comparative study of 10 projects in Finland and seven projects in the United States. A Monte Carlo simulation was used to determine the coefficient of variation for construction costs and the potential reasons behind the variations. The results showed that the two most significant construction cost factors for both countries were non-energy related cost items and the building envelope, rather than the mechanical system (heating and ventilation) as commonly perceived. The construction cost variance was larger in the United States than in Finland, which may be associated with the unfamiliarity of energy-efficient technologies and varied construction methods in different regions. A novelty of the study is the focus on cost variance of energy retrofit projects with an international perspective.

Rajala et al. (2022) also focus on economic aspects in a study of profitability of building renovation companies compared to companies specializing in new construction. The study analysed financial statements from 60 renovation companies and 59 new building companies from 2005 to 2019 in Finland. Profitability was assessed through EBITDA and return on assets (ROA). The findings show that micro and small companies in the new building sector have a statistically significant advantage in EBITDA over renovation in same size groups. Projects in the renovation sector appear to be more complex, especially in terms of design, causing cost overruns. The more cyclical nature of new construction, however, equalizes EBITDA differences over time. Medium-size companies overall had the lowest EBITDA following the 2008–2009 financial crisis. ROA was generally higher for renovation sector highlighting the more capital-intensive nature of new construction. Since both sectors’ profitability has been decreasing during the research period, actions are needed especially in the renovation sector, which has an increasingly important role in developed societies. A novelty of the study is the comparison of profitability of building renovation companies and new construction companies over a long period.

Discussion and conclusion

The five papers all address sustainability in a broad sense and none of the paper mainly focus on environmental aspects of SBR unlike most other research on SBR. The first three papers by Jowkar et al., Le et al. and Brahmi et al. mainly focus on social sustainability in terms of collaboration on management level and in decision-making or design stage. The last two papers by Hu et al. and Rajala et al. mainly focus on economic sustainability in terms of project cost variance and company profitability, respectively. The level of study various considerably between the papers. Hu et al. provide an international comparison of cost between retrofit projects in two countries, Le at al. investigate property management of schools on a national level, Rajala et al. study company profitability in a country, Jowkar et al. focus on homeowners of residential buildings in a city, and Brahmi et al. investigate new management models and technologies in the design of heritage office building in several countries. None of the papers are specifically concerned with the on-site renovation process.

In relation to the research gaps and needs presented in the introduction of this editorial, the five papers contribute to closing some of the gaps and supplement them with new perspectives. The first gap concerns new instruments to overcome barriers for SBR. This is particularly addressed in the first paper by Jowkar et al., who propose a new intermediary role on a city level (Urban FM) besides new financial instruments to promote SBR. Hu et al. also address barriers and provides an analysis of cost variance to provide better understanding to overcome barriers, but they do not suggest new instruments.

The second gap concerns new strategies for SBR processes. The suggestion by Jowkar et al. in terms of a new intermediary role on a city level can be seen as a new strategy. The papers by Le et al. and Brahmi et al. suggest new management models as a strategy to improve SBR. The third gap concerns the need for more in-depth descriptive and cross-sectional studies of SBR processes in practice. This is also partly addressed by Le at al. for management of state schools on a national level and by Brahmi et al. for management of design of heritage buildings. The fourth gap concerns research that can support increasing the performance of SBR processes. The two papers by Le et al. and Brahmi et al. can also be seen as addressing this gap. The focus on IPD in the paper by Brahmi et al. can be regarded as introduction of relational contracting, which was mentioned in the introduction as a promising direction for further development of SBR.

The fifth gap concerns a need to develop more holistic methods for prioritizing and evaluating SBR, particularly with a stronger focus on social sustainability and integration of the three pillars of sustainability. Although several papers mainly focus on aspects of social sustainability, none of them focus on social sustainability as a specific topic and provide holistic methods for prioritizing and evaluating SBR. The sixth gap concerns the need for more research that can support a pull from the demand side. This is addressed by Le et al. by taking a homeowners’ perspective. The seventh and last gap concerns the need to investigate and demonstrate the contribution that SBR can have in relation to solving important societal challenges. None of the papers address this.

The five papers make valuable contributions to research on SBR and help to close some of holes in the identified research gabs. The papers also provide new perspectives, for instance by focussing on management of SBR on national and city level and by comparison of projects across countries. However, there is still a need for much more research on SBR to close all the identified and other not yet identified research gaps.