|Longevity of buildings as an economic KPI
|de Jong, Peter
|In the medical field a vast literature has investigated on correlation between longevity and economic welfare. The debate is going on researching for attributes contributing to these KPI’s. On international level longevity-convergence is evident. Countries with modest longevity levels experience life expectancy gains in the last 50 years than countries with a higher starting level. The purpose of this paper is to set up an international data and methodological context for the building industry to investigate if and to what extent longevity of buildings is also a KPI for real estate, adding to economic performance on different levels.__The research approach starts with the definition (regression) of the changing relation between income and longevity for given moments in time (actual and a base year in the past). Followed by monetising the value of longevity gains by converting them into income value. This will enable the possibility to express different causes of demolition (technical underperformance, replacement, functional obsolescence) into reduction of income value. With buildings the question of longevity will always against which cost. Total life cycle cost spanning sequential economic (or technical) lifetimes, including cost of refurbishment and renovation, next to initial cost and maintenance, are added to the analysis.__The first finding which is aimed for is the confirmation that life expectancy of buildings is a similar important dimension of welfare as life expectancy of people. Secondly to put a value to longevity, and finally valuing demolition as an opposite of adaptive reuse.__There is rich data on the macroeconomic part of the equation through several international institutions. The research limitation, and challenge for cooperation, lies in the data collection of life expectancy for buildings on a comparable level. Dutch data reveals an approach for actual life expectancy of buildings. A base life expectancy must be constructed. Within this dataset it is possible to test the methodology for different Dutch cities, but the reflection on macroeconomic KPI’s requires international comparison, for which ERES is the ideal platform.__Mirroring a debate and a methodology of another field of science is not original in itself, but the effect is. In the minds of real estate people and politicians a new build CBD is a sign of desirable prosperity. However a sound mix of old and new can be found in many mature capital cities. The social and practical
|Year of publication:
|Longevity, Life expectancy, International comparison, LCC, Valuing causes of demolition
de Jong, Peter (2015).
Longevity of buildings as an economic KPI. 22nd Annual European Real Estate Society Conference in Istanbul, Turkey,