Design Economics for the Built Environment

Impact of Sustainability on Project Evaluation

Herbert Robinson, Barry Symonds, Barry Gilbertson, Ben Ilozor, Herbert Robinson, Barry Symonds, Barry Gilbertson, Ben Ilozor

• Publisher: Wiley-Blackwell
• Year: 2015
• Print ISBN: 9780470659090
• eBook ISBN: 9781118944868
• Edition: 1
• Topic: Technology & Engineering
• Subtopic: Technology & Engineering Research & Skills
• Index: Technology & Engineering

The drive towards environmentally friendly buildings and infrastructure has led to a growing interest in providing design solutions underpinned by the core principles of sustainability to balance economic, social and environmental factors.

Design Economics for the Built Environment: Impact of sustainability on project evaluation presents new directions, reflecting the need to recognise the impact of climate change and the importance of sustainability in project evaluation. The aim is to provide a new approach to understanding design economics in the context of the changing policy environment, legislative and regulatory framework, and increasing economic, environmental and social pressure as result of the sustainability agenda.

The book follows a structured approach from theories and principles in the earlier chapters, to the practical applications and emerging techniques focusing on value and social, economic and environmental considerations in making design decisions. It starts with the policy context, building on various theories and principles such as, capital cost, value of design and resource-based theories, the new rules of measurement (NRM) to explore cost planning, the relationship between height and costs, key socio-economic and environmental variables for design appraisal, eco-cost/value ratio (EVR), whole life theory and the treatment of carbon emission as external costs, productivity and efficiency, fiscal drivers and legal framework for carbon reduction, procurement and allocation of risks in contracts.

Case studies, practical examples and frameworks throughout reinforce theories and principles and relate them to current practice. The book is essential reading for postgraduate students in architecture, building and quantity surveying and is also a valuable resource for academics, consultants and policy-makers in the built environment.

Part I
Theories, Principles and Approaches

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Chapter 1 Economic Context, Policy Environment and the Changing Role of Design Economists

Chapter 2 Theories and Principles of Design Economics

Chapter 3 New Approaches and Rules of Measurement for Cost Estimating and Planning

Chapter 4 The Relationship between Building Height and Construction Costs

Chapter 5 Appraisal of Design to Determine Viability of Development Schemes

Chapter 6 Eco-cost Associated with Tall Buildings

Chapter 7 Productivity in Construction Projects

Chapter 8 Design Variables and Whole-Life Cost Modelling

Chapter 9 Procurement and Contract Strategy: Risks Allocation and Construction Cost

Chapter 10 Sustainable Design, Investment and Value

Chapter 11 Carbon Reduction and Fiscal Incentives for Sustainable Design

Chapter 12 Environmental Assessment Tools: An Overview of the UK’s BREEAM and the US’s LEED

Chapter 13 Space Planning and Organisational Performance

Chapter 14 Achieving Zero Carbon in Sustainable Communities

Chapter 15 Flood Risk Mitigation: Design Considerations and Cost Implications for New and Existing Buildings

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Chapter 1
Economic Context, Policy Environment and the Changing Role of Design Economists

Herbert Robinson and Barry Symonds

1.1 Introduction

Construction projects are essential for industrial development, business growth and economic transformation. However, major industry reviews and current challenges in the UK construction industry have identified a number of problems forcing construction firms and their clients to reconsider the way they procure and manage projects. A number of criticisms have also been directed specifically at quantity surveying firms assuming the role of economists focusing on cost management and a range of services to provide value for money for clients of the construction industry.

This chapter provides the economic context for construction projects, examines the policy environment and underlying implications for design economists. First, the role of construction in economic development is explored followed by a discussion of the global construction market, the drive towards international trade and the internationalisation of construction services. Secondly, the policy environment is examined and policy measures to stimulate construction investment are discussed with examples of how fiscal, monetary and industry specific policies affect construction processes, resource markets which in turn affect construction costs. Thirdly, the role of the design economists in responding to the policy issues resulting in increasingly complex challenges to reduce social, environmental and economic costs through efficiency, and productivity are discussed. Throughout the chapter, reference is made to how various sections or subsequent chapters relate to the current, emerging and the future role of the design economists. There is a gradual development of the sections from applying theories and principles, and approaches to developing practical tools and techniques to respond to new challenges and policy initiatives influenced by the global and national agenda such as climate change, sustainability, resilience to withstand flooding/storm and building Information Modelling (BIM).

1.2 The economic context

Construction projects are capital intensive requiring resources for various activities from concept design to construction and use of the end product, whether it is for self-use as with owner occupiers, for sale or investment as with some developers, for human development, or as capital goods for use in the economic production process.

Understanding the dynamics of the construction industry is critical in tackling central economic and policy issues such as role of infrastructure (including buildings) in economic growth, employment, investment, inflation, exports and imports. There are several reasons why construction is often seen as an ‘engine’ for economic growth. First, economic and trade infrastructure, a key product of the construction industry, such as roads, ports, power supply, airports, telecommunication systems, factories, warehouses, business parks and offices are required for industrial production, manufacturing, retail and the services sector. Social infrastructure such as educational, health, sports and recreational facilities are also directly related to improving living standards, quality of life and to facilitate human capital development and productivity. For example, labour productivity will increase through provision of good education, healthcare and recreational infrastructure. Figure 1.1 illustrates the need to understand the role of construction actors (design and construction firms as producers of capital goods) and other actors (such as planning agencies and clients as facilitators and owners) in the development process.

Figure 1.1 Actors in the development process.

Why is design economics important? The cost of infrastructure (or a building) matters. Understanding the cost drivers of infrastructure or building projects is key to the design of construction projects and recognising this factor is central to the discipline of design economics. First, infrastructure facilities (or buildings) are a critical input in production processes and contributes to a nation’s productivity as it directly affects the cost of goods and services and their competitiveness in the global market place. Industries, manufacturing and the service sectors are therefore primarily concerned with minimising both initial capital (construction costs) and operational costs to maximise the returns on investment and increase profitability. Construction investment varies directly with business profits (or expectation of profits). As industries and businesses continue to grow through profitability and further investment, an expansion in buildings and infrastructure facilities will be needed.

From a business perspective, the drive ...

Table of contents

• Cover
• Title page
• Table of Contents
• Editors and Contributors
• Foreword
• Preface
• Part I: Theories, Principles and Approaches
• Part II: Industry Perspective, Case Studies and Implications for Curriculum Development
• Appendix A: UK Property Investment Yields (December 2013)
• Appendix B: IPD/RICS Sustainability Inspection Checklist 2014
• Index
• End User License Agreement