The Cost of The Code: How high a price will developers pay for going above and beyond building regulations?

The environmental impact of housing is coming under increasing scrutiny as the government seeks to deliver on its promises for carbon emissions reduction, water usage and waste. In this issue of Insight Quarterly, we look at the Code for Sustainable Homes and assess the costs associated with meeting its high standards of holistic design.

In 2004 approximately a quarter of the UK’s carbon dioxide emissions were found to be a result of energy use in our homes.  Housing also creates other pressures on the environment; such as water consumption and its subsequent wastage, waste disposal and pollution and wastage in the construction of the houses and the materials used. 

In recognition of these facts, The Code for Sustainable Homes has been developed by the Department for Communities and Local Government (CLG) in association with the Building Research Establishment (BRE) and Construction Industry Research and Information Association (CIRIA).  Together they have developed a process for assessing the environmental impact of new residential homes.   The aim of the assessment is to improve and encourage more energy efficient and environmentally friendly housing in the United Kingdom.

Communities and Local Government Minister Angela Smith said of the Code:
“This guidance explains to the building industry, but also crucially to the public, how new homes can deliver real environmental improvements in key areas like water and energy use. It will also play a real part in helping us all understand how we use the homes we live in and how we can do our bit to help tackle climate change”.

The Code for Sustainable Homes realises that as important as climate change is, housing also causes other problems on the environment around it.  As such, The Code considers a number of different aspects in the design of a home and following the Code will make house building more sustainable, and ensure a better quality of housing for the future.

The assessment of the Code looks at nine categories, Energy/CO2, Water, Materials, Surface Water Run-Off, Waste, Pollution, Health and Well-Being, Management and Ecology.

In each of these areas the Code looks to improve on building regulations where applicable, such as energy use, and raise the standard of house building and reduce the impact of the dwelling on the environment in other areas, such as improving waste management and using more sustainable construction materials.  Each category has a number of issues to be assessed.  Each of these issues has specific assessment criteria, which must be met for credits to be awarded.

In the Code, each dwelling is assessed, although there are site wide credits and individual credits. For five of these assessment issues, minimum standards are set which must be achieved before the lowest level of the Code can be awarded.  This applies to Materials, Surface Water Run-Off and Waste, Energy/CO2 and Water.  However for Energy/CO2 and Water minimum standards are required at each level of the Code.  Therefore to be able to achieve a specific code level, the design must incorporate the minimum standards. 

There are six levels of the Code that can be achieved.

The main driver behind the Code is the requirement of the Housing Corporation for all their funded projects to meet Level 3 of the Code.  Previous to the Code, the Housing Corporation required their funded projects to meet EcoHomes 2006 Very Good level.  At this stage, the Code is voluntary unless, as above it is part of a contractual requirement, however, it has been suggested that the made become a mandatory Government requirement by April 2008 for all new homes.

One aspect that is of concern to the housing market is the additional cost that the Code may have on the construction of dwellings.   This needs to be taken into account at the conception of a project, to ensure that the development will meet the Codes standards, but at a cost that is affordable to those who build and those who will subsequently own the units.  As such, an understanding of the Code and the different design cost aspects are essential. 

A recent study that was carried out by Cyril Sweet on behalf of the Housing Corporation and English Partnerships, looked at the cost of meeting level 3 of the Code for Sustainable Homes.

The study looked at four traditionally built house types; including semi detached house, detached house, and high rise and low rise flat.  The study also looked at two houses from the Design for Manufacture competition from which a house based on the Weber Haus product was chosen and a ‘SixtyK’ house, as developed by the SixtyK Consortium lead by Crest Nichols who designed a house that would cost £60,000 to construct.

The primary concern with achieving Level 3 of the Code is in meeting the mandatory requirements for energy use.  Level 3 of the Code requires the homes to be 25% better than current Building Regulations.  The research carried out looked at four different scenarios of achieving the energy reduction, using different renewable and low carbon technologies to achieve the required energy reduction.

For the mandatory energy requirements, the cost of meeting level 3 of the Code was variable depending on the measures installed. For the traditionally built houses, the cost was as low as £1,600, where wind turbines were used, to over £4,400 where mechanical ventilation systems were used.   The variation for high-rise apartments is even greater with the lowest cost coming in at £1,700 for flats, which were included in a site with CHP system, up to £6,000 where solar watering heating is installed.

For the non-traditionally built homes, both homes could reach level 3 at no extra cost, as already these types of construction are highly thermally efficient in fact the SixtyK house already includes the use of low carbon and renewable technologies. 

Overall, what the report found was that there is an average 3% increase in the cost of the development to meet level 3 of the Code.

Steve Carr, Head of Policy and Economics at English Partnerships said, “This report shows that the house building sector can tackle global warming without major extra cost. For some of our development partners there may be no real extra cost at all because they are already using the energy saving design and construction methods needed to get to Level 3 of the Code.

“We have to start adapting to climate change now. House builders who work with us on our land in the early stages are likely to have an advantage over their competitors in the future.”

With regards to the other mandatory requirement of water consumption being no higher than 105 litres per person per day, can be achieved at no additional or very little cost.  For the other minimum requirements the cost of meeting these, is similar to EcoHomes 2006, and as such, is not considered to be additional over that cost.

Many of the renewable and low or zero carbon technologies have yet to be put to widespread use in the UK.  A decrease in cost is proposed to occur as the demand increases for these technologies  through the increased volume of production.  As such it is believed that within a relatively short period of time, perhaps 2-5 years, a reduction in the cost of these products should be seen.

Other developments have shown that incorporating energy efficiency measures and renewable technologies into new build does not add a massive cost to the construction.   Properties that have been developed that have required to meet the Merton 10% Rule have shown only a 3% increase in the cost of the development, making including renewable a viable option.  

Despite this shown small initial cost, it has been show that it is worth it, public perception of sustainable buildings is changing, with the market now recognising the importance of owning environmentally friendly homes and the impact that has on their lifestyles.  In a recent report, ‘Eco Chic or Eco Geek’3, it was found that four out of five homeowners believe that more environmentally friendly homes would help to combat climate change.  Further research carried out in the study, showed that 73% of those surveyed stated that water and energy efficiency was fairly or very important in choosing their next home.  What this goes to show is that the public is becoming more aware of the impact of sustainable homes on the environment and are seeking more environmentally friendly homes.  This provides a great incentive for house builders and architects to look at the market and the associated costs to see how they can meet this demand.

So to meet the challenge of reducing our environmental impact and to reduce climate change, part of the 1% of total GDP required now, as proposed by Sir Nicholas Stern, is to make improvements to our new build properties by using the Code as a tool to make our homes more sustainable and energy efficient.  Through this additional cost of the Code, the damage made to our environment may be lessened.