Functional Obsolescence Research Articles

Designing the public works values

What are public works, and under what conditions can they be considered a “common value” recognized by the community? The contributions to issue n. 28 of TECHNE Journal delve into these conditions, offering critical reflections and research advancements that examine cities, buildings, places, and public services from the perspective that «the entire urban space must be regarded as something produced, owned, and transformed collectively» (Marella, 2024). There are three main areas of reflection and proposal: the first involves the methods and procedural and design tools that can be employed for the recovery and adaptive reuse of public works facing functional obsolescence, abandonment, and/or decay; the second addresses the regenerative processes of public spaces and entire urban sectors with a focus on usability and environmental sustainability; and the third concerns the participatory design of public works as a vital lever for the creation of social value. This set of design actions is well-supported by analytical and evaluative tools that guide the decision-making process, all driven by an interest in optimizing the socio-economic, cultural, and environmental benefits that can result from more effective and efficient public works production and management processes, especially in response to evolving social demands.

Capturing Low Demand Through Long Time-On-Market: Functional Obsolescence and Owner Resignation Among Old Rental Houses

ABSTRACT In Asian countries, including Japan, the rapid demolition and new construction of housing continues, causing demand for old housing stock to fall. Employing unit-level listing information obtained from a real estate portal in the Tokyo rental housing market, this study differentiates vacancies by time dimension and documents that old properties are likely to spend a long time on the market, exceeding several months. This low demand for old houses can be attributed to functional obsolescence (lack of contemporary housing amenities and services) and owner resignation (lack of adequate countermeasures to fill vacancies regardless of their effectiveness). Our results indicate that even in popular property segments and neighbourhoods at the macro level, low demand broadly arises among old houses and is not always socially inefficient. Moreover, accelerating early redevelopment may improve social welfare by avoiding older properties sitting on the market for long periods.

How Property Rents and Expenses Depreciate: A Case of Tokyo Office Properties

This is the first comprehensive study on the age profile of new rents, average rents, operating expenses, net operating income, capital expenditure, and net cash flow for office properties in Tokyo. There are four main findings. First, the rate of rental depreciation in Japan is low and explains less than half of the rate of depreciation of property prices, although it is higher in earlier years. Second, average rents exhibit nominal rigidity. Third, approximately half of the observed depreciation in new rents is due to physical deterioration as opposed to functional obsolescence, which is driven by changes in tenant preferences and advances in building technology. Last, operating expenses are independent of age, whereas capital expenditure increases in the first 20 years. Our study contributes to the literature by estimating depreciation rates for commercial real estate rents, costs, and cash flows, with new insights into the detailed age profile and sources of economic depreciation.

Assessing Users’ Demand for Library Space: Insights from an Architecture School

The purpose of this paper is to conduct a post-occupancy evaluation to assess users’ feedback on the use of the architecture school library at Thammasat University, Thailand. The proposed study also has a specific objective: to explore users’ demand for library space in terms of academic library attributes. A case study of the library in the Faculty of Architecture and Planning was conducted at Thammasat University. Multiple data collection methods were used, including document analysis, a questionnaire survey, a workshop, and focus group interviews, to gather information on users’ demand for the library space. The findings confirm the relevance of the variables in the conceptual model from previous studies, which encompass three key attributes regarding users’ demand for library space: physical, social, and digital spaces. Functional obsolescence and changing learning approaches are revealed as dominant influential factors affecting users’ demand for library space. The connection between post-occupancy evaluation (POE) and pre-design evaluation (PDE) in the redevelopment of a real estate project is considered as a shift from performance measurement to performance management, assisting in establishing agreed-upon performance goals for the operation. This study’s findings, derived from a single case study, do affect affect generalisability. However, the study provides insights into academic library design and renovation by emphasising the alignment of library spaces with user needs for improved service effectiveness and user satisfaction. The research introduces an integration of POE and PDE, proposing a methodological framework for future library space redevelopment that could contribute to the broader discussion on library design and user experience.

Preserving History in a Modern Setting "An Adaptive Redesign of Lawang Sewu for Sustainable Development and Architectural Heritage Conservation

This study focuses on the adaptive redesign of Lawang Sewu, a prominent landmark in Semarang, Indonesia. The building, constructed in the early 20th century, has witnessed historical events and changes throughout its existence. In recent years, there has been a growing interest in preserving and revitalizing Lawang Sewu as a cultural heritage site. However, the adaptive redesign is not without challenges, including structural instability, environmental degradation, functional obsolescence, aesthetic discordance, and social resistance. This research essay aims to explore the adaptive redesign of Lawang Sewu from various perspectives and propose strategies for achieving energy efficiency and sustainability objectives. The essay is organized into chapters that provide an overview, literature review, case study analysis, discussion of historical and socio-environmental aspects, examination of visual impact, and a conclusion. The study also discusses the concept of authenticity in heritage conservation and presents a design proposal for Lawang Sewu's acoustic enhancement. The results of the case study analysis highlight the complexity of the adaptive redesign project and its cultural context and project site in Semarang.

Investigating the Potential Adoption of Product-Service Systems in the Luggage Industry to Promote Sustainability

The travel-goods industry is an essential part of the larger travel and tourism sector, but it allegedly creates significant environmental impacts due to resource and energy consumption. This study investigates the potential of the product-service system (PSS) models to promote the transition to a sustainable travel industry in the future. It explores the drivers and barriers to PSS adoption within the luggage industry from a theoretical perspective and identifies opportunities for value creation using both consumer and luggage industry viewpoints. Four hypothetical PSS models are developed to highlight different pathways to PSS adoption, underpinned with empirical data collected via a consumer survey and semi-structured interviews with industry experts. Even though the analysis revealed shifting consumer attitudes towards servitisation concepts within the travel-goods market, at present, the widespread adoption of PSS is hindered by the fragmented nature of global supply chains and entrenched ownership values. Addressing supply chain issues in a way that empowers end-of-life systems to sustainably manage products beyond their functional obsolescence is critical. In parallel, product-oriented PSS models are more likely to increase, driven by a burgeoning resale market and supported by digital technologies, which in turn can lead to greater prospects for use-oriented PSS adoption in the long-term that would eventually promote sustainability.

A participatory project for the Librino Social Housing Community.

Social housing is the outcome of policymaking aimed at guaranteeing adequate living conditions for disadvantaged social groups. In Italy, in the post-war reconstruction period, buildings designed by internationally renowned architects, led to results of such high design quality that it is essential to preserve them. Nevertheless, their advanced degradation and functional obsolescence are due to being built with construction systems focused on quick completion and cost-effectiveness, as well as a lack of maintenance. Such conditions now impose performance upgrades and reuse for services and collective spaces. The paper addresses the issue of the recovery of this housing stock in the Italian context, analyzing the case of Librino (Catania). The research question is based on evidence that the lack of services and collective spaces in the suburbs leads people to move to other areas of the city for work, health, education, culture, and leisure. The proposed approach investigates the overall organization of the neighborhood, up to reuse pilots, as for the Moncada Theater, to improve the overall quality and attractiveness of the area, even with minor renovations. The theatre, which was abandoned before completion, is an example of how only housing was built or completed in residential areas designed to provide a wide range of services for citizens as a result of a funding shortfall. Reuse decisions are the result of user involvement with a view to social and cultural sustainability.

The Architecture of Animation: Sungnyemun's Cultural Fire, Materiality, and Han

May 01 2023 The Architecture of Animation: Sungnyemun's Cultural Fire, Materiality, and Han Yeo-Jin Katerina Bong Yeo-Jin Katerina Bong Yeo-Jin Katerina Bong is a Ph. D. student at the Daniels Faculty of Architecture, Landscape and Design at the University of Toronto. Her research broadly focuses on early modern architecture of Italy, focusing on the treatment of structural defects, destruction, and demolition by architects of the period. She also examines the undergirding cultural history and early modern reception of failed or failing buildings and connects them to our own concerns about building destruction, functional obsolescence, and heritage preservation in the twenty-first century. Her secondary research concentrates on the material construction and preservation of East Asian architecture, particularly timber buildings from the Joseon dynasty. Katerina received a bachelor's from the University of Toronto and a master's from the University of Pennsylvania in art and architectural history. She also serves as the graduate chair of the Graduate Student Advisory Committee for the Society of Architectural Historians. Search for other works by this author on: This Site Google Scholar Author and Article Information Yeo-Jin Katerina Bong Yeo-Jin Katerina Bong is a Ph. D. student at the Daniels Faculty of Architecture, Landscape and Design at the University of Toronto. Her research broadly focuses on early modern architecture of Italy, focusing on the treatment of structural defects, destruction, and demolition by architects of the period. She also examines the undergirding cultural history and early modern reception of failed or failing buildings and connects them to our own concerns about building destruction, functional obsolescence, and heritage preservation in the twenty-first century. Her secondary research concentrates on the material construction and preservation of East Asian architecture, particularly timber buildings from the Joseon dynasty. Katerina received a bachelor's from the University of Toronto and a master's from the University of Pennsylvania in art and architectural history. She also serves as the graduate chair of the Graduate Student Advisory Committee for the Society of Architectural Historians. Online ISSN: 2572-7338 Print ISSN: 1091-711X © 2023 Yeo-Jin Katerina Bong2023Yeo-Jin Katerina Bong Thresholds (2023) (51): 150–161. https://doi.org/10.1162/thld_a_00774 Cite Icon Cite Permissions Share Icon Share Facebook Twitter LinkedIn MailTo Views Icon Views Article contents Figures & tables Video Audio Supplementary Data Peer Review Search Site Citation Yeo-Jin Katerina Bong; The Architecture of Animation: Sungnyemun's Cultural Fire, Materiality, and Han. Thresholds 2023; (51): 150–161. doi: https://doi.org/10.1162/thld_a_00774 Download citation file: Ris (Zotero) Reference Manager EasyBib Bookends Mendeley Papers EndNote RefWorks BibTex toolbar search Search Dropdown Menu toolbar search search input Search input auto suggest filter your search All ContentAll JournalsThresholds Search Advanced Search This content is only available as a PDF. © 2023 Yeo-Jin Katerina Bong2023Yeo-Jin Katerina Bong Article PDF first page preview Close Modal You do not currently have access to this content.

A customized design method for upgrade remanufacturing of used products driven by individual demands and failure characteristics

Design for upgrade remanufacturing (DfURem) of used products is the generation of the optimal scheme in remanufacturing, with the purpose of improving function and performance to overcome functional obsolescence. However, the demands for upgraded remanufactured products are often characterized by individuation and diversification. Moreover, due to the wide variety of used parts, failure forms and failure degree, the failure characteristic presents DfURem with a unique challenge. As a result the generation of DfURem schemes for used products is currently prohibitively individual and inefficient. To address this, this paper develops a customized method to implement DfURem task based on individual demands and failure characteristics of used products. Firstly, the Quality Function Deployment for Life (QFDL) model is constructed to transform the multi-attribute life and performance demands into engineering characteristics through data analysis theory, aiming to satisfy customer demands more accurately. Secondly, a hybrid approach integrating Case-Based Reasoning (CBR) and Constraint-Function-Behavior-Structure-Upgradation (CFBSU) is proposed to generate the DfURem scheme. Engineering characteristics and failure characteristics are used to drive the CBR-CFBSU hybrid approach together, and compatibility constraints are identified and addressed. The DfURem scheme is retrieved in CBR by the nearest neighbor algorithm to calculate similarity, and the knowledge representation model of CFBSU model is constructed complementary to CBR, which transforms the engineering characteristics into implementable DfURem schemes by layer mapping. Finally, a case study of a used lathe part is illustrated to demonstrate the effectiveness of the proposed method.

A conceptional structure for challenging the rebound effect of the product-service system

The product obsolescence rate is one of the product-service system rebound effect issues. Obsolescence can be generated by both planned obsolescence and post-production obsolescence. Planned obsolescence can increase sales and revenue artificially. However, the pattern of planned obsolescence has demonstrated that obsolescence is no longer limited to functional obsolescence but rather rapidly evolves to include quality and aesthetic aspects. Moreover, post-production consuming behaviours hasten the rate of product obsolescence, especially in the absence of ownership. At this point, rapid obsolescence contradicts the spirit of the Product-service System's (PSS) value proposition. During the stage of value co-creation, such topics must be considered. According to research on PSS and the co-creation process, the co-creation of value is inherent to PSS. Nevertheless, managing the process of value co-creation is another challenge. In addition, decision-making should also be prevented from being dominated by a high degree of centralisation. This paper presents a preliminary investigation into constructing a framework for managing the value co-creation process and decision-making to prevent the rebound effect based on conceptual review. This study identifies methods applicable to the co-creation procedure. A conceptional structure of co-creation of value and decision-making is presented.

Opportunities for revitalising the outdoor spaces of historic town centres in Zemgale

The study examines the processes of transformation of urban infrastructure and the ways and tools for revitalising the outdoor public spaces of a historic centre. Changes in the historic centres of Auce, Bauska, and Jelgava and their functional layout were identified. A study of usability levels and outdoor public spaces in the historic centre was carried out, resulting in an assessment of the outdoor public space. Based on the study, spatial proposals were made for the development of the historic centres of the three cities. The transformation processes in the urban environment affect social issues, transport infrastructure, land use, water issues, etc. Transformation is taking place at all levels today, from global economic, political, and social structures to the ways the outdoor public space is planned. With the trends of the early 21st century, historic squares are moving towards the revitalisation of these historic locations through recreation and quiet leisure: concerts, exhibition areas, café terraces, also reviving the character of historic fairs. This spurs possible business development, increases the value of property, encourages the presence of green structures, and the introduction of regulation for protected areas in old towns to discourage possible unauthorised activities by their residents. Negative factors in historic centres include urbanisation, physical deterioration, climate change, marketing, and functional obsolescence. Urban revitalisation is viewed as a multi-sectoral strategy that includes the development and implementation of policies in the fields of urban planning, transport, economy, urban development, and sustainability. Solutions can be developed based on different time frames: short-term, cyclical, seasonal, and long-term. The purpose of revitalising the outdoor public space is to improve the social, functional, economic, ecological, and historical aspects of an area through a variety of revitalisation tools.

Slum Prevalence and Crime incidence in Calabar, Nigeria

The problems faced in slums go beyond defacing the city’s aesthetic quality and poor housing supply but extend to crime increase. In Calabar, the weaknesses of the government/development partners towards preparing and implementing urban renewal programmes/projects has resulted in sporadic increase in the prevalence of slums. Obviously, places of functional obsolescence with derelict features create breeding ground for crime to thrive. In Calabar, areas mainly in the city core are characterized with moribund environments, deteriorating/deteriorated housing units and poor sanitation systems all of which points to slum development. Crime is prevalent in such areas hence the need to carry out this study. The study focused on ascertaining slum prevalence and crime incidence. A sample of 400 respondents was taken using Taro Yamene formular. Data were obtained from both primary and secondary sources. Questionnaire and housing/environmental quality checklists were the major instrument for data collection. Data were analysed using relative index, frequencies and percentages. It was noted in the study that slums are prevalent in the study area and it prevalence contribute to increasing crime levels. This is because the absence of certain facilities constrain security operation in the slum prevalent area. The study recommended that there should be urgent urban renewal in the study area. Facilities and infrastructure that will increase security level should also be provided
 Keywords: Slum, crime, housing/environmental quality, urban renewal, sustainability

Environmental Identities and the Sustainable City. The Green Roof Prospect for the Ecological Transition

This research deals with the issue of the recovery of the historic urban fabric with a view towards ecological transition, nowadays considered the preferable direction of sustainability for the reform of the house–city–landscape system. The massive incentives provided by the Italian government for sustainable building, in view of the post-pandemic economic recovery, risk being reduced to mere support for the real estate sector, which turns the financial transfer from the public into an increase in asset value for the private sector. Such an incentive system could contradict the original function of the city, which is to be the privileged place for social communication and the creation of the identity of settled communities. A process of property development that disregards the distribution of income favors the most valuable property, thus increasing the socioeconomic distance between centrality and marginality. The latter is a condition that often characterizes the parts of the historic city affected by extensive phenomena of physical and functional obsolescence of the built heritage, and it is less capable of attracting public funding. The increase of building decay and social filtering-down accelerates the loss and involution of neighborhood identities; the latter constitutes the psycho-social energy that helps preserve the physical, functional and anthropological integrity of the city, due to the differences that make its parts recognizable. This study, with reference to a neighborhood in the historic city of Syracuse (Italy), proposes a model of analysis, evaluation and planning of interventions on the buildings’ roofs, aimed at defining the best strategy for ecological–environmental regeneration. The model presented allows one to generate a multiplicity of alternative strategies that combine different uses of roofs: from the most sustainable green roofs, but that are less cost-effective from the identity and landscape point of view; to the most efficient photovoltaic roofs from the energy–environmental point of view; and up to the most cost-effective ones, the vertical extensions with an increase in building volume. The proposed tool is an inter-scalar multidimensional valuation model that connects the multiple eco-socio-systemic attitudes of individual buildings to the landscape, identity, energy–environmental and economic overall dimensions of the urban fabric and allows one to define and compare multiple alternative recovery hypotheses, evaluating their potential impacts on the built environment. The model allows the formation of 100 different strategies, which are internally coherent and differently satisfy the above four perspectives, and it provides the preferable ones for each of the five approaches practiced. The best strategy characterizes most green roofs, 427 out of 1075 building units, 277 blue roofs, 121 green–blue roofs and 46 grey roofs.

Re:Crete – Reuse of concrete blocks from cast-in-place building to arch footbridge

About 9% of anthropogenic greenhouse gas emissions worldwide are due to the production of cement, key constituent of concrete. Concrete also contributes to a large share of demolition waste, usually coming from building structures that are discarded because of functional obsolescence rather than of technical deficiency. Current practice for treating end-of-life concrete is to landfill it or crush it into aggregates used in new concrete mixes. Instead, a little-explored strategy consists in extending the service life of concrete elements by reusing them in new constructions. Following this paradigm, this paper presents a proof-of-concept prototype that reuses blocks cut out of obsolete cast-in-place concrete walls for a new structural application: a 10 m-long post-tensioned segmented arch footbridge. The paper details the design, material sourcing, and construction processes while highlighting the unusual features of the approach. The structural behavior is verified with a finite element analysis model and validated by load testing. A comparative life cycle assessment shows that the arch construction presents a significantly lower global warming potential then recycled concrete (−71%) or steel (−74%) alternatives and is very competitive to a timber one (+9%). In conclusion, the project proves the feasibility of a new circular economy application for the construction industry, in which new and reliable concrete structures are built with little to no cement inputs.

Abandoned places, complexes and parts of cities. Regeneration and enhancement of monumental hospitals in the historic centre of Naples

Even before Covid-19 although in the very center of the old town and historic center of Naples there were abandoned buildings and complexes, uninhabited and unused for decades. The cause is attributed to multiple reasons such as functional obsolescence, failure to adapt to intervening European standards in terms of hospital construction, technological facilities to standards, etc. The health crisis which strongly affected European societies revealed the fragilities of our healthcare systems. In Italy, a large number of COVID-19 patients congested hospitals while the continuity of essential services was interrupted at the expense of other needs. At the same time, the process of abandonment of historic buildings affects different monumental hospitals, such as the “San Giacomo degli Incurabili” and the “Carlo Forlanini” in Rome, or the “Gesù e Maria” Hospital, “San Gennaro dei Poveri” and the “Santa Maria del Popolo degli Incurabili” in Naples. This paper reports three case studies of Neapolitan historical hospitals regeneration proposals with the goal of strengthening the existing community healthcare system and developing energy efficiency and seismic improvement strategies in the spirit of sustainable development. Leveraging the flexibility of monumental hospitals, the proposed light retrofit interventions restore the historial healthcare functional destination ensuring also the reuse of such an heritage. The current research delineates an approach to the recovery and enhancement for social and cultural purposes of unused and abandoned historical hospitals. This approach can positively affect the quality of life of citizens and the use of health services, while recovering historical cultural heritage buildings.

Abandoned places, complexes and parts of cities. Regeneration and enhancement of monumental hospitals in the historic centre of Naples

Even before Covid-19 although in the very center of the old town and historic center of Naples there were abandoned buildings and complexes, uninhabited and unused for decades. The cause is attributed to multiple reasons such as functional obsolescence, failure to adapt to intervening European standards in terms of hospital construction, technological facilities to standards, etc. The health crisis which strongly affected European societies revealed the fragilities of our healthcare systems. In Italy, a large number of COVID-19 patients congested hospitals while the continuity of essential services was interrupted at the expense of other needs. At the same time, the process of abandonment of historic buildings affects different monumental hospitals, such as the “San Giacomo degli Incurabili” and the “Carlo Forlanini” in Rome, or the “Gesù e Maria” Hospital, “San Gennaro dei Poveri” and the “Santa Maria del Popolo degli Incurabili” in Naples. This paper reports three case studies of Neapolitan historical hospitals regeneration proposals with the goal of strengthening the existing community healthcare system and developing energy efficiency and seismic improvement strategies in the spirit of sustainable development. Leveraging the flexibility of monumental hospitals, the proposed light retrofit interventions restore the historial healthcare functional destination ensuring also the reuse of such an heritage. The current research delineates an approach to the recovery and enhancement for social and cultural purposes of unused and abandoned historical hospitals. This approach can positively affect the quality of life of citizens and the use of health services, while recovering historical cultural heritage buildings.

The historical telegraphic towers from Madrid to Valencia: from knowledge to preservation and enhancement

ABSTRACT The optical telegraphic system was introduced in Spain in 1844. In fact, more than a hundred towers were built to connect Madrid to Irún, Valencia and the Andalusia. Decommissioned at the end of the nineteenth century, despite their historical value, the towers are today abandoned with a high level of material and functional obsolescence, waiting for a new utilization. In light of the above-mentioned aspects, the research aims at the identification, cataloguing and qualification of the telegraphic towers located on the pathway from Madrid to Valencia in order to propose a large-scale territorial project for their preservation and enhancement. In particular, the paper is going to describe, first, a historical and morphological evolution of the telegraphic towers. Second, a methodology for qualification of the architectural, material, constructive and functional characteristics of the towers is reported, with a specific reference to the given case study of the telegraphic paths between Madrid and Valencia. Finally, a redevelopment scenario is proposed for the restoration of the towers as well as for their integration in a cycling and pedestrian naturalistic pathway.

Методика оценки функционального устаревания объектов интеллектуальной собственности на основе показателей статистики

The article proposes a methodology for assessing the functional obsolescence of intellectual property objects based on the use of statistical indicators of the results of intellectual activity. The use of a cost-based approach in the evaluation of intellectual property objects provides for the calculation of the functional obsolescence of such objects. At the same time, due to the atypical nature of the valuation objects and the absence of a formed market for such objects, there has not been a unified approach to reflecting functional obsolescence in assessing the market value of intellectual property objects. It is necessary that the obsolescence assessment be carried out on the basis of data that meets the requirements of accessibility, verifiability and traceability over time. The purpose of the study is to develop a methodology for assessing the functional obsolescence of intellectual property objects based on the use of statistical indicators of the results of intellectual activity and designations of merchandise, works, services and business entities. In the course of the study, an analysis of approaches to assessing the functional obsolescence (depreciation) of intellectual property objects and methods of its calculation was carried out. It is revealed that some of the existing methods are overly simplified and do not reflect the actual functional obsolescence, while others are excessively complex and time–consuming for use in the practical activities of appraisers. A methodology for assessing functional obsolescence (depreciation) based on indicators of the growth rate of intellectual activity results and designations of merchandise, works, services and business entities by their types is proposed. The methodology presented in the article can be used by professional appraisers, as well as specialists of financial and economic services of companies in determining the market value of exclusive and other intellectual property rights. The methodology has been tested in assessing the market value of exclusive rights to integrated circuit topologies.

Data-Driven Decision-Making method for Functional Upgrade Remanufacturing of used products based on Multi-Life Customization Scenarios

With rapid changes in technology and customer preferences, functional obsolescence of used products poses serious challenges to resumed remanufacturing. Upgrade remanufacturing is a potential solution for dealing with the problems of functional obsolescence. The multi-attribute remaining life and customized life of the functional unit are critical elements of decision-making for upgrade remanufacturing solution, yet there are many possible scenarios for the multi-attribute remaining life and the customized life. The optimal solution varies with the various scenarios, which makes the decision-making for choosing the optimal solution of Functional Upgrade Remanufacturing (FUR) very individual and complicated. To this end, the paper proposes a Data-Driven Decision-Making (DDDM) method for FUR of used products based on Multi-Life Customization Scenarios (MLCS). MLCS describes the relationship between the remaining physical, technical, economic life and customized life. Firstly, the used product is decomposed into several functional units that are taken as the objects for upgrade remanufacturing, and the mapping between MLCS and decision-making for FUR is established through data mining. Then the DDDM method of Bayesian network is employed to inference, which is constructed based on historical data, and the solution with the largest posteriori probability is taken as the optimal solution. Finally, a case study on decision-making for FUR of a used mechanical hydraulic power steering system is demonstrated to validate the proposed method.

Estimating housing rent depreciation for inflation adjustments

U.S. inflation measures, such as the Consumer Price Index, are adjusted for an aging-bias based on estimates of the average rent depreciation. This study analyzes the characteristics of rent depreciation using novel, market-based data on rental contracts in Las Vegas, NV. We find that the estimated annual depreciation rate for new properties is 0.9% for single-family residences and 1.5% for condominiums. The higher depreciation rate for condominiums is due to higher functional obsolescence instead of physical deterioration. Rent depreciation rates are lower for older and smaller structures and vary significantly across neighborhoods. Our results suggest that local inflation rates are biased downward where new and large units increased since the last update to the official rent depreciation estimates but upward where the housing stock became older. From an asset pricing perspective, failing to account for initially high depreciation results in an overvaluation of new properties and an undervaluation of old properties.