Is Investing in Sustainability of Social Housing Economically Profitable

The purpose of this paper is to present a systematic decision-making model for suburban development of residential building block owned by the non-profit investor in social housing market. This model is an updated version of the decision-making process developed by Aalto & Heljo (1984). The original model was planned as a life-cycle profitability tool for single building examinations and as such it was not sufficient tool to respond the challenges set by block-level development projects. The model enables an investor to compare different design solutions and choose the one that guarantees effective use of limited resources. The choice can be made purely from the economic viewpoint, but sustainability factors, such as energy efficiency and greenhouse gas emissions, can also be considered. Thus, the model can be used as a tool to guide social housing towards sustainability. For redevelopment of the model, current practices of social housing companies were analyzed in relation to suburban development on the basis of a case project, but the results can be considered broadly applicable in the field of housing and real estate. The case study area is a full scale residential block including 13 blocks of flats. All of the buildings are owned by the VTS homes which is a non-profit social housing company in the city of Tampere. The development project includes infill as well as retrofitting. Decision-making process in a residential development project is complicated and a classification of related factors is a challenge. Thus, for example, it is not possible to treat energy efficiency in a decision-making process as a separate factor, but it has to be considered as part of a bigger entity. From the viewpoint of sustainability energy efficiency is an essential factor. Energy costs constitute a significant expense from the viewpoint of life-cycle economy of a building. From the viewpoint of social housing companies there is financial pressure to raise rents as energy prices continue to rise globally. These future pressures can be restrained by improving energy efficiency of buildings within development projects. However, it would appear that energy efficiency becomes overshadowed by other issues in planning.