Abstract
Energy efficiency is fundamental to enhancing homes affordability. There are several unique challenges to affordable housing that owner-developers need to address in order for energy efficiency to make significant economic sense. Issues such as Transaction Costs (TCs) plays a significant role in achieving building energy efficiency (BEE) for affordable housing delivery. It is evident that split incentives, information asymmetry, institutional transition, opportunistic behavior, and ill-informed users incur different levels of TCs and affect stakeholder’s willingness to take part in BEE for affordable housing. A better understanding of the nature and structure of TCs is indispensable to enhance the market-drive and investment for BEE affordable housing. Uncertainty, specific investment, frequency, and bounded rationality seen as the key dimensions of TCs. The research focuses on how to minimize TCs involve in BEE affordable housing delivery. It was found in the literature that, the level of TCs for building energy efficiency estimated at 20.5% of total project costs. A conceptual competency-driven benefits realization model is proposed for minimizing TCs taking into consideration the peculiarities of the current housing projects delivery. This research aims to establish the significance of leveraging on BEE project team-competency and commitment organized within a strategic Benefits Realization Management framework to optimize client‘s benefits regarding minimizing TCs. The focus is on the aspect of a developer’s competencies and their project team commitment concerning minimizing TCs that structured within a Benefits Realization Management (BRM) practice. This model is proposed as a pro-active enabler tool to achieve Value for Money in BEE affordable housing projects. This paper is part of a series of publications.
Highlights
Construction industry could contribute significantly to the sustainability of future development
There is the need for the developing countries to advance their level of awareness and contribute immensely to the Building Energy Efficiency (BEE) development battle to redefine the fight against climate change and address the global environmental concerns [4]
The framework was further developed using Williamson's [14] analysis of the key contributors of Transaction Costs (TCs), namely: the economic actors' behavioural assumptions, the lack of competency resulting in bounded rationality [15]; and transaction characteristics such as split incentive, information asymmetry, opportunistic behaviour, illinformed users and institutional transition [16] of the BEE affordable housing projects
Summary
Construction industry could contribute significantly to the sustainability of future development. In Nigeria, the case is similar, as buildings consume about 75% of electricity, primarily for air-conditioning due to the tropic climate characterized by sunny and hot weather This seen as the fundamental point and source of Nigeria’s greenhouse gas emissions. Though, when compared to the conventional building's approach, green buildings projects are often seen to have a higher initial cost at both the design and construction stages. The barrier to the building energy efficient market entry is higher when compared with conventional building approach; this is due to new information search, expertise, lack of technical knowhow of new technology, and financial risk involved. The attempt here is to provide a basis to realize benefits for the client by focusing on key existing developers' capabilities, viewed as corporate social responsibility within the construction industry, focusing on the soft human factors component. TCs have variously described as being a social waste of wealth [10,11]
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