A business case for flexible housing: the feasibility of implementing flexibility measures in the housing market

Abstract

Adaptive construction is already for decades on the agenda of the construction sector. The adaptive capacity of a building includes all properties and qualities that enable the building keeping its (economic feasible) functionality during the technical life cycle, under altered conditions and needs (Geraedts 2014). Meanwhile, the interest in flexible building has increased significantly from a broader perspective than ever before. This increased interest is caused by the growing awareness of the need for sustainability issues and related to that circular economy. The Dutch construction sector is responsible for 35% of the national waste production in Holland. This number emerges from a sector that accounts for 5,1% of the gross domestic product (Remoy 2013). This paper reports about a follow-up study that was executed in collaboration with a Dutch building real estate developer (Ruiterkamp 2015). The purpose of this research was to develop a successful business case for flexible row house concept that could show the market under what conditions flexibility measures for future adaptations can be implemented. The main focus was on the financial feasibility of the concept through a lifecycle approach and the special conditions for success. One of the main conclusions affirms that a long-lasting collaboration between the developer and the investor could result in a feasible business case if the developer stays involved after the delivery during the use phase of the dwellings. An important aspect is the degree and complexity of the possible future adjustments. For example it was financially more attractive to implement an extension at ground floor level for the flexible housing concept compared to the regular housebrand dwelling of the developer involved. Through many additional interviews this research was able to let the real estate market reflect about the business case of flexible row housing. All approached market parties defined the concept as customer-oriented, the business case successful and were highly interested in the concept.