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Area: Design, planning and building

Financial wellbeing is an emerging concept with valyrious definitions, many of which focus on the financial capabilities of individuals. A household's financial wellbeing encompasses its capacity to comfortably meet current and ongoing financial responsibilities, fostering a sense of security about future obligations while enjoying the ability to make life choices (Aubrey et al., 2022). Riitsalu et al. (2023) describe it as "feeling good about one's personal financial situation and being able to afford a desirable lifestyle both now and in the future" (p.2). Brüggen et al. (2017:229) frame it as "the perception of being able to sustain current and anticipated desired living standards and financial freedom." This perception highlights the robust link of financial wellbeing influencing human wellbeing, which is a combination of "feeling good and functioning well" (Ruggeri et al., 2020:1). Other terminologies are used interchangeably to describe financial wellbeing, including financial health, financial resilience, and financial freedom (Riitsalu et al., 2023).

 

 

In the UK, the public health sector cares to raise awareness of financial wellbeing due to its impact on households' health and populations' productivity. On their official website page on Financial Wellbeing, they used the definition by The Money and Pension Service (Gov.UK, 2022: online) as follows:

 

"Feeling secure and in control of your finances, both now and in the future. It's knowing that you can pay the bills today, can deal with the unexpected, and are on track for a healthy financial future."

 

These explanations and the terminology used, including "afford" and "sustain," underscore the interconnections between financial wellbeing and the vital components of household life. These components encompass mental health, productivity, and pursuing economic sustainability in the present and future. Therefore, a household's financial wellbeing is pressured by various housing-related factors, including the costs of renting or buying and non-housing costs like utility bills and repairs, all of which can affect the household's income.

 

The issue of rising housing costs directly undermines financial wellbeing. This trend can be attributed to several factors, including increased construction costs, labour shortages, and rising material prices (Brysch & Czischke, 2021). Furthermore, there is a notable shortage in affordable and social housing supply (Emekci, 2021; Gov.UK, 2022). This scarcity is partly due to decreased public investment in new dwellings (Housing Europe, 2021; OECD, 2020). This issue further burdens low-income households who face high private rental costs and a gradual reduction in housing benefits (Tinson & Clair, 2020).

 

This issue also leads many households to cut back on essential needs. For instance, interviews with social housing residents in Scotland with low to modest incomes revealed a tendency to prioritize rent payments over other necessities, such as food and heating (Garnham et al., 2022). Similarly, Adabre and Chan (2019), , citing Salvi del Pero et al. (2016), warned that:

 

"Households who are overburdened by housing cost may cut back on other important needs such as health care and diet. Besides, in the medium term, households may trade-off costs for lower quality housing such as smaller size of rooms and housing in poorer locations which lack better access to education and other social amenities. The latter has often been cited as the cause of residential segregation."

 

Another financial burden is non-housing costs involving energy costs for heating (AHC, 2019; Stone et al., 2011). According to Lee et al. (2022), this issue persists, contributing to financial strain and even excess winter deaths in the UK. Poor housing quality raises energy bills (AHC, 2019; Lameira et al., 2022). It presents the risk of considering dwellings as affordable due to local authority support focusing on housing costs alone (Granath Hansson & Lundgren, 2019), regardless of its quality impacting energy bills (OECD, 2020). Social housing residents, particularly the ageing population and those living in poverty are at increased risk of fuel poverty (Tu et al., 2022). Fuel poverty occurs when more than 10% of a household's income goes towards energy consumption for heating (Howden-Chapman et al., 2012).

 

Looking forward, two factors could continue burdening households’ financial wellbeing. One factor is the fluctuating energy prices that are often increasing, such as the case in the UK (Bolton, 2024). Another factor is the impact of climate change, leading to colder winters and the potential for overheating, increasing energy demand during extreme weather conditions, as warned by the Committee of Climate Change in the UK (Holmes et al., 2019).

 

Non-housing costs associated with extensive housing repairs can also impact household financial wellbeing, which may arise from several factors. For instance, selecting low-quality construction materials, workforce or equipment to reduce construction costs might lead to increased repair costs over time (Emekci, 2021). Hopkin et al. (2017) highlighted a related issue in England, where new housing defects were believed to be partly attributed to the building industry's prioritization of profitability over customer satisfaction. Another factor could be improper periodic maintenance, potentially accelerating the physical deterioration of the dwelling (Kwon et al., 2020). Additionally, dwellings may fall into disrepair due to unresponsive maintenance services from housing providers, and residents may lack the financial means to cover repair costs themselves (Garnham et al., 2022).

 

 

Financial wellbeing is closely tied to household income. Low-income households are particularly vulnerable to being burdened by rising housing costs (Housing Europe, 2021; OECD, 2020), leading to financial insecurity (Hick et al., 2022). In addition, they might suffer housing deprivation due to the increasing housing and non-housing expenses coupled with their declining incomes (Emekci, 2021; Wilson & Barton, 2018). The financial pressure due to low income is further exacerbated if a household member has a disability or severe illness, potentially consuming up to 35% of their income (AHC, 2019). Recently, the COVID-19 pandemic period highlighted households' financial wellbeing vulnerability to housing-related financial challenges (Brandily et al., 2020; Hick et al., 2022; National Housing Federation, 2020). During this period, job losses led to difficulties covering housing and non-housing costs, with a third of low-income social housing residents burdened by housing costs (OECD, 2020).

 

The issues discussed above on dwellings being of poor quality or unaffordable harm financial wellbeing, leading to residential segregation (Adabre & Chan, 2019; Salvi del Pero et al., 2016) as well as intensifying gaps of social injustice, health injustice, poverty, and fuel poverty (Barker, 2020; Garnham et al., 2022). Without addressing those housing-related issues, many households' financial wellbeing would remain vulnerable to economic insecurity even if they live in housing considered to be "affordable" in terms of rent-to-income ratio.

References

Adabre, M. A., & Chan, A. P. C. (2019). Critical success factors (CSFs) for sustainable affordable housing. Building and Environment, 156(February), 203–214. https://doi.org/10.1016/j.buildenv.2019.04.030

AHC. (2019). Defining and Measuring Housing Affordability-An Alternative Approach. In Affordable Housing Commission. www.affordablehousingcommission.org

Aubrey, M., Morin, A. J. S., Fernet, C., & Carbonneau, N. (2022). Financial well-being: Capturing an elusive construct with an optimized measure. Frontiers in Psychology, 13(August). https://doi.org/10.3389/fpsyg.2022.935284

Bolton, P. (2024). Domestic energy prices Summary. House of Commons Library, January.

Brandily, P., Brebion, C., Briole, S., & Khoury, L. (2020). A Poorly Understood Disease? The Unequal Distribution of Excess Mortality Due to COVID-19 Across French Municipalities. SSRN Electronic Journal, 1–35. https://doi.org/10.2139/ssrn.3682513

Brüggen, E. C., Hogreve, J., Holmlund, M., Kabadayi, S., & Löfgren, M. (2017). Financial well-being: A conceptualization and research agenda. Journal of Business Research, 79, 228–237. https://doi.org/10.1016/j.jbusres.2017.03.013

Brysch, S. L., & Czischke, D. (2021). Affordability through design: the role of building costs in collaborative housing. Housing Studies, 0(0), 1–21. https://doi.org/10.1080/02673037.2021.2009778

Emekci, S. (2021). How the pandemic has affected Turkish housing affordability: why the housing running cost is so important. City, Territory and Architecture, 8(1). https://doi.org/10.1186/s40410-021-00132-3

Garnham, L., Rolfe, S., Anderson, I., Seaman, P., Godwin, J., & Donaldson, C. (2022). Intervening in the cycle of poverty, poor housing and poor health: the role of housing providers in enhancing tenants' mental wellbeing. Journal of Housing and the Built Environment, 37(1), 1–21. https://doi.org/10.1007/s10901-021-09852-x

Gov.UK. (2022). Financial wellbeing: applying All Our Health. https://www.gov.uk/government/publications/financial-wellbeing-applying-all-our-health/financial-wellbeing-applying-all-our-health

Granath Hansson, A., & Lundgren, B. (2019). Defining Social Housing: A Discussion on the Suitable Criteria. Housing, Theory and Society, 36(2), 149–166. https://doi.org/10.1080/14036096.2018.1459826

Hick, R., Pomati, M., & Stephens, M. (2022). Housing and poverty in Europe : Examining the house prices. April.

Holmes, G., Hay, R., Davies, E., Hill, J., Barrett, J., Style, D., Vause, E., Brown, K., Gault, A., & Stark, C. (2019). UK housing: Fit for the future? In Committee on Climate Change (Issue February).

Hopkin, T., Lu, S. L., Rogers, P., & Sexton, M. (2017). Key stakeholders' perspectives towards UK new-build housing defects. International Journal of Building Pathology and Adaptation, 35(2), 110–123. https://doi.org/10.1108/IJBPA-06-2016-0012

Housing Europe. (2021). The state of housing in Europe. Housing Europe, 25–68. https://doi.org/10.1787/9789264298880-4-en

Howden-Chapman, P., Viggers, H., Chapman, R., O'Sullivan, K., Telfar Barnard, L., & Lloyd, B. (2012). Tackling cold housing and fuel poverty in New Zealand: A review of policies, research, and health impacts. Energy Policy, 49, 134–142. https://doi.org/10.1016/j.enpol.2011.09.044

Kwon, N., Song, K., Ahn, Y., Park, M., & Jang, Y. (2020). Maintenance cost prediction for aging residential buildings based on case-based reasoning and genetic algorithm. Journal of Building Engineering, 28(October 2019), 101006. https://doi.org/10.1016/j.jobe.2019.101006

Lameira, G., Rocha, L., Jorge, R., & Ramos, G. (2022). Affordable Futures Past : Rethinking Contemporary Housing Production in Portugal While Revisiting Former Logics. 7(1), 223–240.

Lee, A., Sinha, I., Boyce, T., Allen, J., & Goldblatt, P. (2022). Fuel Poverty , and Health Inequalities in the Uk Contents.

National Housing Federation. (2020). Housing issues during lockdown: health, space and overcrowding. 302132, 1–12. https://www.housing.org.uk/globalassets/files/homes-at-the-heart/housing-issues-during-lockdown---health-space-and-overcrowding.pdf

OECD. (2020). Social housing: A key part of past and future housing policy. Employment, Labour, and Social Affairs Policy Briefs, OECD, 1–32.

Riitsalu, L., Sulg, R., Lindal, H., Remmik, M., & Vain, K. (2023). From Security to Freedom— The Meaning of Financial Well-being Changes with Age. Journal of Family and Economic Issues. https://doi.org/10.1007/s10834-023-09886-z

Ruggeri K, Garcia-Garzon E, Maguire Á, Matz S, & Huppert F. (2020). Well-being is more than happiness and life satisfaction: A multidimensional analysis of 21 countries. Health and Quality of Life OutcomesHealth and Quality of Life Outcomes [revista en Internet] 2020 [acceso 4 de julio de 2021]; 18(1): 1-16. Health and Quality of Life Outcomes, 1–16. https://hqlo.biomedcentral.com/track/pdf/10.1186/s12955-020-01423-y.pdf

Salvi del Pero, A., Adema, W., Ferraro, V., & Frey, V. (2016). Policies to promote access to good quality affordable housing in OECD countries. OECD Social, Employment and Migration Working Papers., 176.

Stone, M., Burke, T., & Ralston, L. (2011). The residual income approach to housing affordability : the theory and the practice. In Australian Housing and Urban Research Institute (Issue 139).

Tinson, A., & Clair, A. (2020). Better housing is crucial for our health and the COVID-19 recovery. The Health Foundation, December, 1-25. Accessed 18 April 2021. https://www.health.org.uk/sites/default/files/2021-01/2020 - Better housing is crucial.pdf

Tu, G., Morrissey, K., Sharpe, R. A., & Taylor, T. (2022). Combining self-reported and sensor data to explore the relationship between fuel poverty and health well-being in UK social housing. Wellbeing, Space and Society, 3, 100070. https://doi.org/10.1016/j.wss.2021.100070

Wilson, W., & Barton, C. (2018). What is 'affordable housing'? | Shelter. House of Commons Library, 07747(07747), 1–35. https://blog.shelter.org.uk/2015/08/what-is-affordable-housing/

Created on 14-10-2024 | Update on 23-10-2024

Related definitions

Affordability

Author: C.Verrier (ESR)

Area: Policy and financing

Housing affordability pertains to the capacity of a given household to pay their rent or mortgage in relation to their financial means. Considering the criticism of the concept when viewed as a strict ratio rule between income and housing expenses (Hulchanski, 1995), it may be useful to focus on the relational nature of the concept and as a way to analyze the relationship between different processes. As Whitehead (2007, p. 30) contended, affordability is a composite of three main parameters: (1) housing cost, (2) household income and (3) direct state interventions (or third-actors) playing on the previous two factors, for instance by improving one’s capacity to pay through direct payments or by reducing housing costs through subsidized housing. Considering the current trend towards unaffordability in European cities (Dijkstra and Maseland, 2016, p. 96), the concept is particularly useful to understand the interplay of factors that both favour rising housing costs—through financialization (Aalbers, 2016), gentrification (Lees, Shin and López Morales, 2016), and entrepreneurial urban policies (Harvey, 1989)—with those that enable the stagnation of low- and middle-incomes, namely Neoliberal globalization (Jessop, 2002) the precarization of work and welfare policy reforms (Palier, 2010). The “hard reality” behind one’s home affordability can therefore be construed as the result of a complex interplay between large-scale processes such as those enumerated above, behind which lie the aggregated behaviours of a multitude of actors; from the small landlord to the large investment firm seeking to speculate in global real-estate markets, from the neighborhood association protecting tenants from evictions to national governments investing (or divesting) large sums of money into housing programs. The conceptual strength of affordability lies in its capacity to scrutinize a wide range of complexly interconnected phenomena, which ultimately affect greatly everyone’s quality of life.    

Created on 27-08-2021 | Update on 20-04-2023

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Community Empowerment

Author: Z.Tzika (ESR10)

Area: Community participation

Community empowerment appears in the literature of participatory action research (Minkler, 2004), participatory planning (Jo & Nabatchi, 2018), and community development (Luttrell et al., 2009) as a key element of participatory practices, understanding it as a process that enables communities to take control of their lives and their environments (Rappaport, 2008; Zimmerman, 2000). Many argue that community participation becomes meaningless if it does not lead to, or pass through community empowerment. As the term is being used in diverse and ubiquitous ways, it runs the risk of ending up as an empty definition and a catch-all phrase (McLaughlin, 2015). It is therefore important to specify the perspective through which we will view the term and clarify the nuances.  Since its origins, empowerment has been used in two different ways. Firstly, top-down as the power that had been ‘granted’ by a higher authority, such as the state or a religious institution, and secondly, bottom-up, as a process by which groups or individuals come to develop the capacity to act and acquire power. Examples of the latter can be found in social groups such as feminists working in nongovernmental organizations throughout the global south in the 1970s, who found a way to address social issues and inequalities that enabled social transformation based on women’s self-organization (Biewener & Bacqué, 2015). The term was gradually appropriated by welfare, neoliberal, and social-neoliberal agendas whose priority was individual agency and choice. In neoliberal rationality, empowerment is related to efficiency, economic growth, business productivity, and individual rational choice to maximize profit in a competitive market economy. In social liberalism agendas, empowerment is understood as ‘effective agency’, where ‘agency’ is not an inherent attribute, but something that needs to be constructed through ‘consciousness-raising’ (McLaughlin, 2016). A broader definition sees empowerment as a social action process through which individuals, communities, and organizations take control of their lives in the context of changing the social and political environment to improve equity and quality of life (Rappaport, 2008; Zimmerman, 2000). Rowlands (1997), refers to four types of empowerment: power over, as the ability to influence and coerce; power to, to organize and change existing hierarchies; power with, as the power from the collective action and power within, as the power from the individual consciousness. Using this classification, Biewener & Bacqué (2015), adopting a feminist approach, understand empowerment as a multilevel construct with three interrelated dimensions: 1) an internal, psychological one, where ‘power within’ and ‘power to’ are developed, 2) an organizational, where ‘power with’ and ‘power over’ are strengthened and 3) a social or political level, where institutional and structural change is made possible through collective action. Thus, community empowerment links the individual level, which involves self-determination, growth of individual awareness, and self-esteem, to the collective level, relating critical consciousness and capacity building with the structural level, where collective engagement and transformative social action take place. This view of empowerment, which considers its goals and processes, has a social dimension that is lacking in other approaches that prioritize individual empowerment. Aside from the feminist movements, the philosophy and practices of community empowerment have been greatly influenced by the work of Paulo Freire, a Brazilian educator and an advocate on critical pedagogy. Freire proposed a dialogic problem-solving process based on equality and mutual respect between students and teachers; that engaged them in a process of iterative listening-discussing-acting. Through structured dialogue, group participants shared their experiences, discussed common problems, and looked for root causes and the connections among “problems behind the problems as symptoms” (Freire, 1970). The term conscientization, that Freire proposed, refers to the consciousness that arises through the involvement of people in the social analysis of conditions and their role in changing them. This awareness enables groups to be reflexive and open spaces, to enact change or to understand those limited situations that may deter change (Barndt, 1989). Empowerment can be understood as both a process and an outcome (Jo & Nabatchi, 2018). As a process, it refers to “the development and implementation of mechanisms to enable individuals or groups to gain control, develop skills and test knowledge”(Harrison & Waite, 2015) and it entails the creation of new subjects who have developed a critical consciousness and the formation of groups with a ‘collective agency’ ‚ or ‘social collective identity’ (Biewener & Bacqué, 2015). Empowerment as an outcome refers to “an affective state in which the individual or group feels that they have increased control, greater understanding and are involved and active” (Harrison & Waite, 2015). This can lead to a transformation of the social conditions by challenging the structures and institutionalized forms that reproduce inequalities. The values and the significance of community empowerment can be further applied in the participatory and community-based approaches of the housing sector. Examples of such approaches in the housing provision are the housing cooperatives, and self-developed and self-managed housing groups. Housing cooperatives aim at promoting co-creation to engage future residents, professionals, and non-profit organizations in all the stages of a housing project: problem-framing, designing, developing, cohabiting, managing, and maintaining. Such organisational models stress the importance and pave the way for community empowerment by uniting individuals with similar interests and ideals, enabling them to have housing that responds to their needs, preferences, and values. The participation of the residents aims to strengthen their sense of ownership of the process, the democratic decision-making and management, and the social collective identity, making community empowerment an integral characteristic of cooperative housing initiatives. With this social perspective, residents can gain individual and collective benefits while contributing to fairer and more sustainable urban development on a larger scale (Viskovic Rojs et al., 2020).

Created on 03-06-2022 | Update on 23-10-2024

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Just Transition

Author: T.Croon (ESR11)

Area: Policy and financing

Justice theory is as old as philosophical thought itself, but the contemporary debate often departs from the Rawlsian understanding of justice (Velasquez, Andre, Shanks, & Meyer, 1990). Rawls (1971) argued that societal harmony depends on the extent to which community members believe their political institutions treat them justly. His First Principle of ‘justice as fairness’ relates to equal provision of ‘basic liberties’ to the population. His Second Principle, later referred to as the ‘Difference Principle’, comprises unequal distribution of social and economic goods to the extent that it benefits “the least advantaged” (Rawls, 1971, p. 266).1[1] As this notion added an egalitarian perspective to Rawlsian justice theory, it turned out to be the most controversial element of his work (Estlund, 1996). The idea of a ‘just transition’ was built on these foundations by McCauley and Heffron (2018), who developed an integrated framework overarching the ‘environmental justice’, ‘climate justice’ and ‘energy justice’ scholarships. The term was first used by trade unions warning for mass redundancies in carbon-intensive industries due to climate policies (Hennebert & Bourque, 2011), but has acquired numerous interpretations since. This is because the major transition of the 21st century, the shift towards a low-carbon society, will be accompanied by large disturbances in the existing social order. In this context, a just transition would ensure equity and justice for those whose livelihoods are most affected (Newell & Mulvaney, 2013). A just transition implies that the ‘least advantaged’ in society are seen, heard, and compensated, which corresponds with three key dimensions conceptualised by Schlosberg (2004): distributive, recognitional, and procedural justice. Distributive justice corresponds with Rawls’ Difference Principle and comprehends the just allocation of burdens and benefits among stakeholders, ranging from money to risks to capabilities. Recognitional justice is both a condition of justice, as distributive injustice mainly emanates from lacking recognition of different starting positions, as well as a stand-alone component of justice, which includes culturally or symbolically rooted patterns of inequity in representation, interpretation, and communication (Young, 1990). Fraser (1997) stressed the distinction between three forms: cultural domination, nonrecognition (or ‘invisibility’), and disrespect (or ‘stereotyping’). Procedural justice emphasises the importance of engaging various stakeholders – especially the ‘least advantaged’ – in governance, as diversity of perspectives allows for equitable policymaking. Three elements are at the core of this procedural justice (Gillard, Snell, & Bevan, 2017): easily accessible processes, transparent decision-making with possibilities to contest and complete impartiality. A critique of the just transition discourse is that it preserves an underlying capitalist structure of power imbalance and inequality. Bouzarovski (2022) points to the extensive top- down nature of retrofit programmes such as the Green New Deal, and notes that this may collide with bottom-up forms of housing repair and material intervention. A consensus on the just transition mechanism without debate on its implementation could perpetuate the status quo, and thus neglect ‘diverse knowledges’, ‘plural pathways’ and the ‘inherently political nature of transformations’ (Scoones et al., 2020). However, as Healy and Barry (2017) note, understanding how just transition principles work in practice could benefit the act of ‘equality- proofing’ and ‘democracy-proofing’ decarbonisation decisions. Essentially, an ‘unjust transition’ in the context of affordable and sustainable housing would refer to low-income households in poorly insulated housing without the means or the autonomy to substantially improve energy efficiency. If fossil fuel prices – either by market forces or regulatory incentives – go up, it aggravates their already difficult financial situation and could even lead to severe health problems (Santamouris et al., 2014). At the same time, grants for renovations and home improvements are poorly targeted and often end up in the hands of higher income ‘free-riding’ households, having regressive distributional impacts across Europe (Schleich, 2019). But even when the strive towards a just transition is omnipresent, practice will come with dilemmas. Von Platten, Mangold, and Mjörnell (2020) argue for instance that while prioritising energy efficiency improvements among low-income households is a commendable policy objective, putting them on ‘the frontline’ of retrofit experiments may also burden them with start-up problems and economic risks. These challenges only accentuate that shaping a just transition is not an easy task. Therefore, both researchers and policymakers need to enhance their understanding of the social consequences that the transition towards low-carbon housing encompasses. Walker and Day (2012) applied Schlosberg’s dimensions to this context. They conclude that distributive injustice relates to inequality in terms of income, housing and pricing, recognitional justice to unidentified energy needs and vulnerabilities, and procedural injustice to inadequate access to policymaking. Ensuring that the European Renovation Wave is made into a just transition towards affordable and sustainable housing therefore requires an in-depth study into distributive, recognitional and procedural justice. Only then can those intertwining dimensions be addressed in policies.   [1] To illustrate his thesis, he introduces the ‘veil of ignorance’: what if we may redefine the social scheme, but without knowing our own place? Rawls believes that most people, whether from self-interest or not, would envision a society with political rights for all and limited economic and social inequality.  

Created on 03-06-2022 | Update on 23-10-2024

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Affordability

Author: L.Ricaurte (ESR15)

Area: Design, planning and building

Affordability is defined as the state of being cheap enough for people to be able to buy (Combley, 2011). Applied to housing, affordability, housing unaffordability and the mounting housing affordability crisis, are concepts that have come to the fore, especially in the contexts of free-market economies and housing systems led by private initiatives, due to the spiralling house prices that residents of major urban agglomerations across the world have experienced in recent years (Galster & Ok Lee, 2021). Notwithstanding, the seeming simplicity of the concept, the definition of housing affordability can vary depending on the context and approach to the issue, rendering its applicability in practice difficult. Likewise, its measurement implies a multidimensional and multi-disciplinary lens (Haffner & Hulse, 2021). One definition widely referred to of housing affordability is the one provided by Maclennan and Williams (1990, p.9): “‘Affordability’ is concerned with securing some given standard of housing (or different standards) at a price or a rent which does not impose, in the eyes of some third party (usually government) an unreasonable burden on household incomes”. Hence, the maximum expenditure a household should pay for housing is no more than 30% of its income (Paris, 2006). Otherwise, housing is deemed unaffordable. This measure of affordability reduces a complex issue to a simple calculation of the rent-to-income ratio or house-price-to-income ratio. In reality, a plethora of variables can affect affordability and should be considered when assessing it holistically, especially when judging what is acceptable or not in the context of specific individual and societal norms (see Haffner & Hulse, 2021; Hancock, 1993). Other approaches to measure housing affordability consider how much ‘non-housing’ expenditures are unattended after paying for housing. Whether this residual income is not sufficient to adequately cover other household’s needs, then there is an affordability problem (Stone, 2006). These approaches also distinguish between “purchase affordability” (the ability to borrow funds to purchase a house) and “repayment affordability” (the ability to afford housing finance repayments) (Bieri, 2014). Furthermore, housing production and, ultimately affordability, rely upon demand and supply factors that affect both the developers and home buyers. On the supply side, aspects such as the cost of land, high construction costs, stiff land-use regulations, and zoning codes have a crucial role in determining the ultimate price of housing (Paris, 2006). Likewise, on the policy side, insufficient government subsidies and lengthy approval processes may deter smaller developers from embarking on new projects. On the other hand, the demand for affordable housing keeps increasing alongside the prices, which remain high, as a consequence of the, sometimes deliberate incapacity of the construction sector to meet the consumers' needs (Halligan, 2021). Similarly, the difficulty of decreasing household expenditures while increasing incomes exacerbates the unaffordability of housing (Anacker, 2019). In the end, as more recent scholarship has pointed out (see Haffner & Hulse, 2021; Mulliner & Maliene, 2014), the issue of housing affordability has complex implications that go beyond the purely economic or financial ones. The authors argue that it has a direct impact on the quality of life and well-being of the affected and their relationship with the city, and thus, it requires a multidimensional assessment. Urban and spatial inequalities in the access to city services and resources, gentrification, segregation, fuel and commuting poverty, and suburbanisation are amongst its most notorious consequences. Brysch and Czischke, for example, found through a comparative analysis of 16 collaborative housing projects in Europe that affordability was increased by “strategic design decisions and self-organised activities aiming to reduce building costs” (2021, p.18). This demonstrates that there is a great potential for design and urban planning tools and mechanisms to contribute to the generation of innovative solutions to enable housing affordability considering all the dimensions involved, i.e., spatial, urban, social and economic. Examples range from public-private partnerships, new materials and building techniques, alternative housing schemes and tenure models (e.g., cohousing, housing cooperatives, Community Land Trusts, ‘Baugruppen’), to efficient interior design, (e.g., flexible design, design by layers[1]). Considering affordability from a design point of view can activate different levers to catalyse and bring forward housing solutions for cities; and stakeholders such as socially engaged real estate developers, policymakers, and municipal authorities have a decisive stake in creating an adequate environment for fostering, producing and delivering sustainable and affordable housing.   [1] (see Brand, 1995; Schneider & Till, 2007)

Created on 03-06-2022 | Update on 23-10-2024

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Social Sustainability

Author: A.Panagidis (ESR8)

Area: Community participation

From the three pillars of sustainable development, economic, environmental and social, the latter  involving social equity and the sustainability of communities, has  been especially neglected. Ongoing problems caused by conflicting economic, environmental and social goals with regard to the processes of urbanisation continue. underpinning economic growth that contradict principles of environmental and social justice (Boström, 2012; Cuthill, 2010; Winston, 2009). Research on sustainable development highlights the need for further investigation of social sustainability (Murphy, 2012; Vallance et al., 2011). Social sustainability has been interpreted as an umbrella term encompassing many other related concepts; “social equity and justice, social capital, social cohesion, social exclusion, environmental justice, quality of life, and urban liveability” (Shirazi & Keivani, 2019, p. 4). A vast number of studies have been dedicated to defining social sustainability by developing theoretical frameworks and indicators particularly relevant to urban development and housing discourse (Cuthill, 2010; Dempsey et al., 2011; Murphy, 2012; Woodcraft, 2012). However, with a lack of consensus on the way of utilising these frameworks in a practical way, especially when applied to planning, social sustainability has remained difficult to evaluate or measure. Consequently, planning experts, housing providers and inhabitants alike understand social sustainability as a normative concept, according to established social norms, and less as an opportunity to critically examine existing institutions. Vallance et al (2011) provide three categories to analyse social sustainability, development, bridge and maintenance sustainability: (a) social development improves conditions of poverty and inequity, from the provision of basic needs to the redistribution of power to influence existing development paradigms; (b) the conditions necessary to bridge social with ecological sustainability, overcoming currently disconnected social and ecological concerns; and (c) the social practices, cultural preferences as well as the environments which are maintained over time. Maintenance social sustainability particularly deals with how people interpret what is to be maintained and includes “new housing developments, the layout of streets, open spaces, residential densities, the location of services, an awareness of habitual movements in place, and how they connect with housing cultures, preferences, practices and values, particularly those for low-density, suburban lifestyles” (Vallance et al., 2011, p. 345). Therefore, the notion of maintenance is especially important in defining social sustainability by directly investigating the established institutions, or “sets of norms” that constitute the social practices and rules, that in turn, affect responsibilities for planning urban spaces. A conceptual framework that appears frequently in social sustainability literature is that of Dempsey et al. (2011)⁠ following Bramley et al. (2009), defining social sustainability according to the variables of social equity and sustainability of community and their relationship to urban form, significantly at the local scale of the neighbourhood. In terms of the built environment, social equity (used interchangeably with social justice) is understood as the accessibility and equal opportunities to frequently used services, facilities, decent and affordable housing, and good public transport. In this description of local, as opposed to regional services, proximity and accessibility are important. Equitable access to such local services effectively connects housing to key aspects of everyday life and to the wider urban infrastructures that support it. Sustainability of community is associated with the abilities of society to develop networks of collective organisation and action and is dependent on social interaction. The associated term social capital has also been used extensively to describe social norms and networks that can be witnessed particularly at the community level to facilitate collective action (Woolcock, 2001, p. 70). They might include a diversity of issues such as resident interaction, reciprocity, cooperation and trust expressed by common exchanges between residents, civic engagement, lower crime rates and other positive neighbourhood qualities that are dependent on sharing a commitment to place (Foster, 2006; Putnam, 1995; Temkin & Rohe, 1998). In fact, “the heightened sense of ownership and belonging to a locale” is considered to encourage the development of social relations (Hamiduddin & Adelfio, 2019, p. 188). However, the gap between theoretical discussions about social sustainability and their practical application has continued. For example, the emphasis of social sustainability as a target outcome rather than as a process has been prioritised in technocratic approaches to planning new housing developments and to measuring their success by factors which are tangible and easier to count and audit. Private housing developers that deal with urban regeneration make bold claims to social sustainability yet profound questions are raised regarding the effects of gentrification (Dixon, 2019). Accordingly, the attempted methods of public participation as planning tools for integrating the ‘social’ have been found to be less effective - their potential being undercut due to the reality that decision-making power has remained at the top (Eizenberg & Jabareen, 2017). Therefore, social sustainability is not a fixed concept, it is contingent on the interdependence of the procedural aspects (how to achieve social sustainability) and substantive aspects (what are the outcomes of social sustainability goals) (Boström, 2012). From this point of view, social sustainability reveals its process-oriented nature and the need to establish processes of practicing social sustainability that begin with the participation of citizens in decision-making processes in producing equitable (i.e. socially sustainable) development. As a dimension of sustainable development that is harder to quantify than the economic or environmental aspects, the operationalisation of social sustainability goals into spatial, actionable principles has remained a burgeoning area of research. In such research, methods for enhancing citizen participation are a particularly important concern in order to engage and empower people with “non-expert” knowledge to collaborate with academic researchers.

Created on 03-06-2022 | Update on 23-10-2024

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Urban Commons

Author: A.Pappa (ESR13)

Area: Community participation

Urban commons are shared resources in the city that are managed by their users in a collaborative and non-profit-oriented way. The concept is based on the idea that urban resources and services that represent fundamental rights in the city should be accessible to and governed by the urban dwellers, to support the social capital and the sustainability of the urban communities. Hence, their value lies mostly in the social benefit produced during their use and they are therefore different from commodities that follow traditional market principles of profit maximisation and private ownership (Dellenbaugh-Losse et al., 2015). The concept of urban commons is an extrapolation in the urban context of the notion of commons which historically refers to natural resources available to all and not owned by any individual, such as air, water and land. The commons discourse became significantly popular thanks to the fundamental contribution of Elinor Ostrom (1990) and particularly after she was awarded the Nobel in Economics in 2009. Ostrom presented cases and design principals for the collective management of common resources by those that use and benefit from them, challenging the predominant negative connotations that had peaked with Garret Hardin’s (1968) Tragedy of the Commons where he analysed the impossible sustainability of common pool resources due to individual benefits. During the last fifteen years, a vast body of academic literature on urban commons has been produced, linking the notion to other urban theories, such as the right to the city (Harvey, 2008; Lefebvre, 1996), biopolitics (Angelis & Stavrides, 2009; Hardt & Negri, 2009; Linebaugh, 2008; Parr, 2015; Stavrides, 2015, 2016), peer-to-peer urbanism and sharing economy (Dellenbaugh-Losse et al., 2015; Iaione, 2015; Iaione et al., 2019; McLaren & Agyeman, 2015; Shareable, 2018). The notion of the urban commons encompasses resources, people and social practices (Dellenbaugh-Losse et al., 2015): Commons resources are urban assets of various types, characteristics and scales (Dellenbaugh-Losse et al., 2015). Examples of commons resources include physical spaces, such as community gardens, street furniture and playgrounds; intangible elements such as culture and public art; services such as safety; digital spaces, such as internet access. Urban commons literature and practices have attempted to determine several typological categorisations of the urban commons resources, the most notable being that of Hess (2008), who classified them as cultural, knowledge, markets, global, traditional, infrastructure, neighbourhood, medical and health commons. The commoners are the group that uses and manages the urban commons resources. It is a self-defined and organically formed group of individuals whose role is to collectively negotiate the boundaries and the rules of the management of the commons resources (Dellenbaugh-Losse et al., 2015). In a neighbourhood setting, for example, the commoners may be individual residents, or community groups, cooperatives, NGOs and local authorities. De Angelis and Stavrides (2010) points out that commoners might include diverse groups or communities that are not necessarily homogenous. Commoning refers to the collaborative participatory process of accessing, negotiating and governing the commons resources. The term was introduced by Peter Linebaugh (2008) and refers to the “social process that creates and reproduces the commons” (Angelis & Stavrides, 2010). Commoning is a form of public involvement for the public good (Lohmann, 2016). Commoning implies a commitment to solidarity and cooperation, to the creation of added value to the community, to democracy and inclusiveness and is connected to a hacking culture(Dellenbaugh-Losse et al., 2015). Hence, commoning practices can include various activities such as co-creation, capacity building and placemaking, support through learning, innovation, performing art, protest, urban gardening and commuting. In contemporary societies in crisis, the urban commons theory is often used as a counter-movement to the commodification of urban life and as a response to complex issues, proving essential for the well-being of marginalised communities and for the provision of affordable and sustainable housing. Urban commons management conveys the re-appropriation of urban values (Borch & Kornberger, 2015) breaking silos of expertise and knowledge by adopting a collaborative approach to defining and solving the problems at stake. The practice of urban commons helps to build values of openness, experimentation, creativity, trust, solidarity and commitment within stakeholder groups.

Created on 14-10-2022 | Update on 23-10-2024

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Life Cycle Costing

Author: A.Elghandour (ESR4)

Area: Design, planning and building

Life Cycle Costing (LCC) is a method used to estimate the overall cost of a building during its different life cycle stages, whether from cradle to grave or within a predetermined timeframe (Nucci et al., 2016; Wouterszoon Jansen et al., 2020). The Standardised Method of Life Cycle Costing (SMLCC) identifies LCC in line with the International Standard ISO 15686-5:2008 as "Methodology for the systematic economic evaluation of life cycle costs over a period of analysis, as defined in the agreed scope." (RICS, 2016). This evaluation can provide a useful breakdown of all costs associated with designing, constructing, operating, maintaining and disposing of this building (Dwaikat & Ali, 2018). Life cycle costs of an asset can be divided into two categories: (1) Initial costs, which are all the costs incurred before the occupation of the house, such as capital investment costs, purchase costs, and construction and installation costs (Goh & Sun, 2016; Kubba, 2010); (2) Future costs, which are those that occur after the occupancy phase of the dwelling. The future costs may involve operational costs, maintenance, occupancy and capital replacement (RICS, 2016). They may also include financing, resale, salvage, and end-of-life costs (Karatas & El-Rayes, 2014; Kubba, 2010; Rad et al., 2021). The costs to be included in a LCC analysis vary depending on its objective, scope and time period. Both the LCC objective and scope also determine whether the assessment will be conducted for the whole building, or for a certain building component or equipment (Liu & Qian, 2019; RICS, 2016). When LCC combines initial and future costs, it needs to consider the time value of money (Islam et al., 2015; Korpi & Ala-Risku, 2008). To do so, future costs need to be discounted to present value using what is known as "Discount Rate" (Islam et al., 2015; Korpi & Ala-Risku, 2008). LCC responds to the needs of the Architectural Engineering Construction (AEC) industry to recognise that value on the long term, as opposed to initial price, should be the focus of project financial assessments (Higham et al., 2015). LCC can be seen as a suitable management method to assess costs and available resources for housing projects, regardless of whether they are new or already exist. LCC looks beyond initial capital investment as it takes future operating and maintenance costs into account (Goh & Sun, 2016). Operating an asset over a 30-year lifespan could cost up to four times as much as the initial design and construction costs (Zanni et al., 2019). The costs associated with energy consumption often represent a large proportion of a building’s life cycle costs. For instance, the cumulative value of utility bills is almost half of the cost of a total building life cycle over a 50-year period in some countries (Ahmad & Thaheem, 2018; Inchauste et al., 2018). Prioritising initial cost reduction when selecting a design alternative, regardless of future costs, may not lead to an economically efficient building in the long run (Rad et al., 2021). LCC is a valuable appraising technique for an existing building to predict and assess "whether a project meets the client's performance requirements" (ISO, 2008). Similarly, during the design stages, LCC analysis can be applied to predict the long-term cost performance of a new building or a refurbishing project (Islam et al., 2015; RICS, 2016). Conducting LCC supports the decision-making in the design development stages has a number of benefits (Kubba, 2010). Decisions on building programme requirements, specifications, and systems can affect up to 80% of its environmental performance and operating costs (Bogenstätter, 2000; Goh & Sun, 2016). The absence of comprehensive information about the building's operational performance may result in uninformed decision-making that impacts its life cycle costs and future performance (Alsaadani & Bleil De Souza, 2018; Zanni et al., 2019). LCC can improve the selection of materials in order to reduce negative environmental impact and positively contribute to resourcing efficiency (Rad et al., 2021; Wouterszoon Jansen et al., 2020), in particular when combined with Life Cycle Assessment (LCA). LCA is concerned with the environmental aspects and impacts and the use of resources throughout a product's life cycle (ISO, 2006). Together, LCC and LCA contribute to adopt more comprehensive decisions to promote the sustainability of buildings (Kim, 2014). Therefore, both are part of the requirements of some green building certificates, such as LEED (Hajare & Elwakil, 2020).     LCC can be used to compare design, material, and/or equipment alternatives to find economically compelling solutions that respond to building performance goals, such as maximising human comfort and enhancing energy efficiency (Karatas & El-Rayes, 2014; Rad et al., 2021). Such solutions may have high initial costs but would decrease recurring future cost obligations by selecting the alternative that maximises net savings (Atmaca, 2016; Kubba, 2010; Zanni et al., 2019). LCC is particularly relevant for decisions on energy efficiency measures investments for both new buildings and building retrofitting. Such investments have been argued to be a dominant factor in lowering a building's life cycle cost (Fantozzi et al., 2019; Kazem et al., 2021). The financial effectiveness of such measures on decreasing energy-related operating costs, can be investigated using LCC analysis to compare air-condition systems, glazing options, etc. (Aktacir et al., 2006; Rad et al., 2021). Thus, LCC can be seen as a risk mitigation strategy for owners and occupants to overcome challenges associated with increasing energy prices (Kubba, 2010). The price of investing in energy-efficient measures increase over time. Therefore, LCC has the potential to significantly contribute to tackling housing affordability issues by not only making design decisions based on the building's initial costs but also its impact on future costs – for example energy bills - that will be paid by occupants (Cambier et al., 2021). The input data for a LCC analysis are useful for stakeholders involved in procurement and tendering processes as well as the long-term management of built assets (Korpi & Ala-Risku, 2008). Depending on the LCC scope, these data are extracted from information on installation, operating and maintenance costs and schedules as well as the life cycle performance and the quantity of materials, components and systems, (Goh & Sun, 2016) These information is then translated into cost data along with each element life expectancy in a typical life cycle cost plan (ISO, 2008). Such a process assists the procurement decisions whether for buildings, materials, or systems and/or hiring contractors and labour, in addition to supporting future decisions when needed (RICS, 2016). All this information can be organised using Building Information Modelling (BIM) technology (Kim, 2014; RICS, 2016). BIM is used to organise and structure building information in a digital model. In some countries, it has become mandatory that any procured project by a public sector be delivered in a BIM model to make informed decisions about that project (Government, 2012). Thus, conducting LCC aligns with the adoption purposes of BIM to facilitate the communication and  transfer of building information and data among various stakeholders (Juan & Hsing, 2017; Marzouk et al., 2018). However, conducting LCC is still challenging and not widely adopted in practice. The reliability and various formats of building related-data are some of the main barriers hindering the adoption of LCCs (Goh & Sun, 2016; Islam et al., 2015; Kehily & Underwood, 2017; Zanni et al., 2019).

Created on 05-12-2022 | Update on 23-10-2024

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Area: Policy and financing

Housing is usually deemed unaffordable when it consumes more than a set percentage of a household's monthly income. The Eurostat (2022) and the OECD (Chung et al., 2018) follow this threshold approach and define households overburdened with housing costs as those that spend more than 40% of their disposable income on housing. However, this indicator fails to capture financial hardship, particularly among lower-income households. In fact, lower-income households may be spending less than 40% of their income on housing and yet failing to meet adequate consumption levels for other goods. As a response, the residual income approach ascertains housing (un)affordability by defining a minimum level of consumption for a set of goods according to particular household types. The residual income approach builds on consumption data to define the minimum level of income necessary for a household to survive after housing costs. The main shortcoming of this approach is that relies on subjective measures of what constitutes the necessary minimal expenses for a household. These two definitions of affordability navigate two tensions 1) between housing and other types of consumption and 2) between the individual conceptions of what is affordable and what the government considers to be affordable (Haffner & Hulse, 2021). More recently, scholars have emphasized the multi-faceted nature of affordability to include commuting and transport costs together with energy costs (Haffner & Boumeester, 2010). Other approaches focus on supply-side measures, for instance on the share of the housing stock that a household can afford (Chung et al., 2018). Evolutions in the measurement of affordability bear witness to the complexity of housing systems. Affordability is not only dependent on housing consumption but also on housing supply, particularly in inelastic markets where providers have considerable power, see for example Kunovac & Zilic (2021). At the same time, displacement pressures and rising energy costs in an older and inefficient stock add pressure on households to access affordable housing.

Created on 21-04-2023 | Update on 23-10-2024

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Housing Affordability

Author: A.Elghandour (ESR4), K.Hadjri (Supervisor)

Area: Design, planning and building

Housing can be perceived as consisting of two inseparable components: the product and the process. The product refers to the building as a physical artefact, and the process encompasses the activities required to create and manage this artefact in the long term (Turner, 1972), as cited in (Brysch & Czischke, 2021). Affordability is understood as the capability to purchase and maintain something long-term while remaining convenient for the beneficiary's resources and needs (Bogdon & Can, 1997). Housing Affordability is commonly explained as the ratio between rent and household income (Hulchanski, 1995). However, Stone (2006, p.2) proposed a broader definition of housing affordability to associate it with households' social experience and financial stability as: "An expression of the social and material experiences of people, constituted as households, in relation to their individual housing situations", ….. "Affordability expresses the challenge each household faces in balancing the cost of its actual or potential housing, on the one hand, and its non-housing expenditures, on the other, within the constraints of its income." Housing costs signify initial and periodic payments such as rent or mortgages in the case of  homeowners, housing insurance, housing taxes, and so on. On the other hand, non-housing costs include utility charges resulting from household usage, such as energy and water, as well as schools, health, and transportation (AHC, 2019; Ezennia & Hoskara, 2019). Therefore, housing affordability needs to reflect the household's capability to balance current and future costs to afford a house while maintaining other basic expenses without experiencing any financial hardship (Ezennia & Hoskara, 2019). Two close terminologies to housing affordability are  “affordable housing” and “affordability of housing”. Affordable housing is frequently mentioned in government support schemes to refer to the housing crisis and associated financial hardship. In England, affordable housing is still concerned with its financial attainability, as stated in the UK Government's official glossaries: "Housing for sale or rent, for those whose needs are not met by the market (including housing that provides a subsidised route to home ownership and/or is for essential local workers)", while also complying with other themes that maintain the affordability of housing prices in terms of rent or homeownership (Department for Levelling Up Housing and Communities, 2019). The affordability of housing, on the other hand, refers to a broader focus on the affordability of the entire housing market, whereas housing affordability specifically refers to the ability of individuals or households to afford housing. In the literature, however, the term “affordability of housing” is frequently used interchangeably with “housing affordability,” despite their differences (Robinson et al., 2006). The "affordability of housing" concerns housing as a sector in a particular region, market or residential area. It can correlate affordability with population satisfaction, accommodation types and household compositions to alert local authorities of issues such as homelessness (Kneebone & Wilkins, 2016; Emma Mulliner et al., 2013; OECD, 2021). That is why the OECD defined it as "the capacity of a country to deliver good quality housing at an accessible price for all" (OECD, n.d.). Short-term and long-term affordability are two concepts for policymakers to perceive housing affordability holistically. Short-term affordability is "concerned with financial access to a dwelling based on out-of-pocket expenses", and long-term affordability is " about the costs attributed to housing consumption" (Haffner & Heylen, 2011, p.607). The costs of housing consumption, also known as user costs, do not pertain to the monthly utility bills paid by users, but rather to the cost associated with consuming the dwelling as a housing service  (Haffner & Heylen, 2011). “Housing quality” and “housing sustainability” are crucial aspects of housing affordability, broadening its scope beyond the narrow economic perspective within the housing sector. Housing affordability needs to consider "a standard for housing quality" and "a standard of reasonableness for the price of housing consumption in relation to income" (p. 609) (Haffner & Heylen, 2011). In addition, housing affordability requires an inclusive aggregation and a transdisciplinary perspective of sustainability concerning its economic, social, and environmental facets (Ezennia & Hoskara, 2019; Perera, 2017; Salama, 2011). Shared concerns extend across the domains of housing quality, sustainability, and affordability, exhibiting intricate interrelations among them that require examination. For instance, housing quality encompasses three levels of consideration: (1) the dwelling itself as a physically built environment, (2) the household attitudes and behaviours, and (3) the surroundings, encompassing the community, neighbourhood, region, nation, and extending to global circumstances (Keall et al., 2010). On the other hand, housing sustainability embraces the triad of economic, social, and environmental aspects. The shared problems among the three domains encompass critical aspects such as health and wellbeing, fuel poverty and costly long-term maintenance  proximity to workplaces and amenities, as well as the impact of climate. Health and wellbeing Inequalities in health and wellbeing pose a significant risk to social sustainability, mainly in conditions where affordable dwellings are of poor quality. In contrast, such conditions extend the affordability problem posing increased risks to poor households harming their health, wellbeing and productivity (Garnham et al., 2022; Hick et al., 2022; Leviten-Reid et al., 2020). An illustrative example emerged during the COVID-19 pandemic, where individuals residing in unsafe and poor-quality houses faced higher rates of virus transmission and mortality (Housing Europe, 2021; OECD, 2020). Hence, addressing housing affordability necessitates recognising it as a mutually dependent relationship between housing quality and individuals (Stone, 2006). Fuel poverty and costly long-term maintenance Affordable houses of poor quality pose risks of fuel poverty and costly long-term maintenance. This risk makes them economically unsustainable. For example, good quality entails the home being energy efficient to mitigate fuel poverty. However, it might become unaffordable to heat the dwelling after paying housing costs because of its poor quality (Stone et al., 2011). Thus, affordability needs to consider potential fluctuations in non-housing prices, such as energy bills (AHC, 2019; Smith, 2007). Poor quality also can emerge from decisions made during the design and construction stages. For example, housing providers may prioritise reducing construction costs by using low-quality and less expensive materials or equipment that may lead to costly recurring maintenance and running costs over time (Emekci, 2021). Proximity to work and amenities The proximity to workplaces and amenities influences housing quality and has an impact on economic and environmental sustainability. From a financial perspective, Disney (2006) defines affordable housing as "an adequate basic standard that provides reasonable access to work opportunities and community services, and that is available at a cost which does not cause substantial hardship to the occupants". Relocating to deprived areas far from work opportunities, essential amenities, and community services will not make housing affordable (Leviten-Reid et al., 2020). Commuting to a distant workplace also incurs environmental costs. Research shows that reduced commuting significantly decreases gas emissions (Sutton-Parker, 2021). Therefore, ensuring involves careful planning when selecting housing locations, considering their impact on economic and environmental sustainability (EK Mulliner & Maliene, 2012). Moreover, design practices can contribute by providing adaptability and flexibility, enabling dwellers to work from home and generate income (Shehayeb & Kellett, 2011). Climate change's mutual impact Climate change can pose risks to housing affordability and, conversely, housing affordability can impact climate change. A house cannot be considered "affordable" if its construction and operation result in adverse environmental impacts contributing to increased CO2 emissions or climate change (Haidar & Bahammam, 2021; Salama, 2011). For a house to be environmentally sustainable, it must be low-carbon, energy-efficient, water-efficient, and climate-resilient (Holmes et al., 2019). This entails adopting strategies such as incorporating eco-friendly materials, utilizing renewable energy sources, improving energy efficiency, and implementing sustainable water management systems (Petrović et al., 2021). However, implementing these measures requires funding initiatives to support the upfront costs, leading to long-term household savings (Holmes et al., 2019). Principio del formulario Furthermore,  when houses lack quality and climate resilience, they become unaffordable. Households bear high energy costs, especially during extreme weather conditions such as heatwaves or cold spells (Holmes et al., 2019). Issues like cold homes and fuel poverty in the UK contribute to excess winter deaths (Lee et al., 2022). In this context, climate change can adversely affect families, impacting their financial well-being and health, thereby exacerbating housing affordability challenges beyond mere rent-to-income ratios.    

Created on 17-10-2023 | Update on 23-10-2024

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Energy Poverty

Author: T.Croon (ESR11)

Area: Policy and financing

The in-depth study of energy poverty as a social phenomenon commenced in the late 19th century through the works of British social researchers Booth and Rowntree (O’Connor, 2016). This era was characterised by significant social and economic transformation, and these scholars were troubled by the living conditions and welfare of impoverished urban populations, who were residing in congested and unsanitary environments. Throughout the 20th century, poverty in policy contexts became quite narrowly defined as a lack of income. However, it was another social concern in the UK that led to the development of concepts like ‘fuel poverty’ or ‘energy poverty’ a century after Booth and Rowntree.[i] Following the 1973 oil crisis, the Child Poverty Action Group took the initiative to address how increasing energy costs were affecting low-income households in the UK (Johnson & Rowland, 1976). As essentials like heating, electricity, and fuels became necessary for maintaining a decent standard of living in modern British society, this advocacy group pushed for government financial support. Later, Bradshaw and Hutton (1983) introduced a narrower definition of energy poverty: “the inability to afford adequate heat in the home”. Since then, studies on energy poverty have typically excluded motor fuels, as they fall under transport poverty, a related but separate area of study (Mattioli et al., 2017). Energy poverty, as defined by Bouzarovski and Petrova (2015, p. 33), refers to "the inability to secure or afford sufficient domestic energy services that allow for participation in society." Although the precise boundaries of relevant domestic energy usage are still debated, this definition expands beyond mere heating as it encompasses energy used for cooling, which is particularly relevant in warmer climates (Thomson et al., 2019). Moreover, it enables a socially and culturally dependent understanding of what it means to participate in society (Middlemiss et al., 2019). On 13 September 2023, the European Union (2023) officially defined energy poverty as “a household’s lack of access to essential energy services, where such services provide basic levels and decent standards of living and health, including adequate heating, hot water, cooling, lighting, and energy to power appliances, in the relevant national context, existing national social policy and other relevant national policies, caused by a combination of factors, including at least non-affordability, insufficient disposable income, high energy expenditure and poor energy efficiency of homes”. The doctoral thesis and subsequent book by Brenda Boardman, Fuel Poverty: From Cold Homes to Affordable Warmth (1991), marked a significant breakthrough in energy poverty research. She emphasised the detrimental impact of energy-inefficient housing on health and quality of life. In the decades that followed, substantial literature confirmed her qualitative findings (Thomson et al., 2017). Notably, studies have demonstrated the adverse effects of living in energy poverty on physical health (Liddell & Morris, 2010), mental health (Liddell & Guiney, 2015), stress levels (Longhurst & Hargreaves, 2019), social isolation (Harrington et al., 2005), and absenteeism (Howden-Chapman et al., 2007). Boardman’s work introduced an indicator that has remained influential to this date, although it was not the first attempt to operationalise the concept of fuel poverty (Isherwood & Hancock, 1979). Her ‘2M’ indicator categorises a household as energy poor if it needs to allocate twice the median share of its budget for energy expenses to heat its home adequately. Boardman calculated this threshold to be 10% at that time. Due to its simplicity and ease of comprehension, many governments directly adopted this 10% threshold without considering specific contextual circumstances. Since the early nineties, numerous attempts have been made to develop alternative indicators. Highly influential ones include ‘Low Income High Cost’ (LIHC) by John Hills (2012), ‘Low Income Low Energy Efficiency’ (LILEE) that subsequently became the official British indicator (BEIS, 2022), and a 'hidden' energy poverty indicator by (Meyer et al., 2018). Critiques of these indicators focus, amongst other things, on their simplicity and perceived 'technocratic' approach (Croon et al., 2023; Middlemiss, 2017). This marked the beginning of significant government commitment, initially in the UK and later in other countries to address energy poverty. Although certain forms of cold weather payments had already been introduced by the UK's Conservative administrations, it was under the successive governments of Blair and Brown, following the publication of Boardman's work, that programmes such as the Winter Fuel Payment and Warm Home Discount were implemented (Koh et al., 2012). The UK examples highlight bipartisan support for addressing energy poverty, with both the Conservatives and Labour backing these efforts. This policy objective has also gained momentum in various legislative contexts, leading the EU to incorporate energy poverty alleviation as a fundamental pillar of the European Green Deal and a specific goal of its landmark Social Climate Fund (European Commission, 2021). Over the last three decades, public interest in energy poverty as a 'wicked' problem has surged, particularly during the recent energy crisis. This crisis began in 2021 when energy markets tightened due to a post-pandemic economic rebound, and it worsened dramatically after Russia's invasion of Ukraine in February 2022 (IEA, 2023). Extensive research on the impact of this price surge on energy poverty levels has been carried out throughout Europe and globally (Guan et al., 2023; Simshauser, 2023). Consequently, energy poverty has become a significant focal point in discussions related to the 'just transition,' especially within the realm of energy justice, as it serves as a valuable concept for targeting policies towards a specific vulnerable group in this context (Carrosio & De Vidovich, 2023).     [i] ‘Fuel poverty' and 'energy poverty' are used interchangeably, with the former being more common in the UK and the latter in mainland Europe (Bouzarovski & Petrova, 2015). Previously, scholars in the UK used 'energy poverty' to denote a lack of access to energy and 'fuel poverty' when affordability was the concern (Li et al., 2014). However, this distinction is no longer maintained.

Created on 17-10-2023 | Update on 23-10-2024

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Social Value

Author: L.Ricaurte (ESR15)

Area: Community participation

Social value (SV) is a wide-ranging concept that encompasses the wider economic, social and environmental well-being impacts of a specific activity. Given its applicability across various sectors, diverse interpretations and definitions exist, often leading to its interchangeable use with other terms, such as social impact. This interchangeability makes it difficult to establish a universally accepted definition that satisfies all stakeholders, contributing to the term’s adaptability and to a variety of methods for identification, monitoring, measurement and demonstration. Nevertheless, common themes emerge from literature definitions. First, SV involves maximizing benefits for communities and society beyond an organisation's primary goals, which requires innovation and a focus that goes beyond financial values. It is often referred to as the added value of an intervention. Second, the short-, medium- and long-term effects of activities, as well as their broader community reach, need to be assessed in terms of a life-cycle project perspective. Thirdly, SV aligns with the triple bottom line of sustainability, which underlines social, environmental and economic considerations in well-being. In the UK, SV gained prominence with the introduction of the Public Services (Social Value) Act 2012. This legislation mandates organisations commissioning public services to consider and account for the wider impacts of their operations (UK Government 2012; UKGBC, 2020, 2021). The Act has provided incentives to quantitatively measure the impact of projects on communities and standardise approaches in the built environment, a sector that has been significantly influenced by this regulatory framework. Organisations such as the UK Green Building Council (UKGBC) have played a crucial role in shaping a common agenda through reports such as Delivering Social Value: Measurement (2020) and Framework for Defining Social Value (2021), which set out the steps needed to determine social value. Recognising that SV is strongly influenced by contextual factors, these publications emphasize the challenge for formulating an all-encompassing definition. Instead, they advocate for focusing efforts on developing context-specific steps and methods for measurement.     However, the existing literature is mainly concerned with SV during the procurement and construction phases, overlooking the SV of buildings during the use phase and the potential opportunities and benefits they offer to users. This bias is due to the construction sector's rapid response to the Act and its easier access to certain types of information. This influences the prominence of certain data in project’s impact assessments and SV reports, such as employment opportunities, training, placements, and support of local supply chains through procurement. More intangible outcomes such as community cohesion, quality of life improvements, enhanced social capital, cultural preservation, empowerment and long-term social benefits are rarely featured as they are deemed more challenging to quantify due to their subjective or qualitative nature. Similarly, there remains a lack of clarity and consensus regarding a standardised approach to assessing the added value created. The challenge stems from diverse interpretations of value among stakeholders, influenced by their unique interests and activities. Communicating something inherently subjective becomes particularly daunting due to these varying perspectives. Additionally, translating all outcomes into financial metrics is also problematic. This is primarily due to the unique circumstances that characterise each development and community, making it impractical to hastily establish targets and universal benchmarks for their assessment. (Raiden et al., 2018; Raiden & King, 2021a, 2023). This complexity is recognised by Social Value UK (2023: n.p.), stating: “Social value is a broader understanding of value. It moves beyond using money as the main indicator of value, instead putting the emphasis on engaging people to understand the impact of decisions on their lives.” Moreover, the growing significance and momentum that SV is gaining are evident in the emergence of analogous legislations that have appeared in recent years and that have a direct influence on shaping how the built environment sector operates in their respective countries. Noteworthy examples of social value-related regulations include the Well-being of Future Generations Act 2015 in Wales; the Procurement Reform Act 2014 in Scotland; the social procurement frameworks in Australia; the Community Benefit Agreements in Canada; the Government Procurement Rules in New Zealand; and the Environmental, Social, and Governance (ESG) criteria considered in various countries around the world, among others.   Identifying and measuring social value SV should be an integral aspect of project development and, therefore, must be considered from the early stages of its conception, taking into account the entire lifecycle. The literature highlights a three-step process for this: 1) identifying stakeholders, 2) understanding their interests, and 3) agreeing on intended outcomes (UKGBC 2020, 2021). More recently, Raiden & King (2021b) linked the creation of SV to the achievement of the United Nations Sustainable Development Goals (SDGs). In the context of the built environment, SV can contribute to reporting on the SDGs, elevating the value the sector creates to society onto the international agenda (Caprotti et al., 2017; United Nations, 2017). While SDG 11 “Make cities and human settlements inclusive, safe, resilient and sustainable”, is often placed within the remit of the built environment, SV programmes developed by social housing providers, for example, extend the sector’s impact beyond SDG 11, covering a broader range of areas  (Clarion Housing Group, 2023; Peabody, 2023). This aspect is also echoed in the Royal Institute of British Architects (RIBA) Sustainable Outcomes Guide, which links the SDGs to specific outcomes, including the creation of SV (Clark & HOK, 2019). Over the past decade, various methodologies have been proposed to undertake the intricate task of assessing value beyond financial metrics, drawing inspiration from the work of social enterprises. Among the most prominent and widely adopted by diverse stakeholders in the sector are the Social Return on Investment (SROI), Cost-Benefit Analysis (CBA) — sometimes referred to as SCBA when given the social epithet—, and the well-being valuation approach. (Fujiwara & Campbell, 2011; Trotter et al., 2014; Watson et al., 2016; Watson & Whitley, 2017). The widespread implementation of these approaches can be explained by the development of tools such as the UK Social Value Bank, linked to the well-being valuation method. This tool, used to monetise ‘social impacts’, is endorsed by influential stakeholders in the UK’s housing sector, including HACT (2023), or the Social Value Portal and National TOMs (Themes, Outcomes and Measures) (Social Value Portal 2023). In the measuring of SV, these methodologies unanimously emphasize the importance of avoiding overclaiming or double-counting outcomes and discounting the so-called deadweight, which refers to the value that would have been created anyway if the intervention had not taken place, either through inertia or the actions of other actors. While the development of these approaches to measuring SV is pivotal for advancing the social value agenda, some critics contend that there is an imbalance in presenting easily quantifiable outcomes, such as the number of apprenticeships and jobs created, compared to the long-term impact on the lives of residents and communities affected by projects. This discrepancy arises because these easily quantifiable metrics are relatively simpler to convert into financial estimates. Steve Taylor (2021), in an article for The Developer, pointed out that the methods employed to measure social value, coupled with the excessive attention given to monetisation and assigning financial proxy values to everything, may come at the expense of playing down the bearing of hard-to-measure well-being outcomes: “As long as measurement of social value is forced into the economist’s straightjacket of cost-benefit analysis, such disconnects will persist. The alternative is to ask what outcomes people and communities actually want to see, to incorporate their own experiences and perspectives, increase the weighting of qualitative outcomes and wrap up data in narratives that show, holistically, how the pieces fit together. We loosen the constraints of monetisation by mitigating the fixed sense of value as a noun; switching focus to its role as an active verb – to ‘value’ – measuring what people impacted by changes to their built environment consider important or beneficial.” The process of comprehensively measuring and reporting on SV can be challenging, time-consuming and resource-intensive. It is therefore important that stakeholders truly understand the importance of this endeavour and appreciate the responsibilities it entails. Recently, Raiden and King (2021a, 2023) have highlighted the use of a mixed-methods approach for assessing SV, proposing it as a strategy that can offer a more thorough understanding of the contributions of actors in the field. They argue that an assessment incorporating qualitative methods alongside the already utilized quantitative methods can provide a better picture of the added value created by the sector. These advancements contribute to the overarching goal of showcasing value and tracking the effects of investments and initiatives on people's well-being. Nevertheless, a lingering question persists regarding the feasibility of converting all outcomes into monetary values. Social value in architecture and housing design In the field of architecture, the RIBA, in collaboration with the University of Reading, took a significant step by publishing the Social Value Toolkit for Architecture (Samuel, 2020). This document provides a set of recommendations and examples, emphasizing why architects should consider the SV they create and providing guidance on how to identify and evaluate projects, incorporating techniques such as Post-Occupancy Evaluation. This is a remarkable first step in involving architects in the SV debate and drawing attention to the importance of design and the role of architecture in creating value (Samuel, 2018). More recently, Samuel (2022:76) proposed a definition of SV in housing that places the well-being of residents at the centre of the discussion. Accordingly, SV lies in “fostering positive emotions, whether through connections with nature or offering opportunities for an active lifestyle, connecting people and the environment in appropriate ways, and providing freedom and flexibility to pursue different lifestyles (autonomy).” In this context, it is also relevant to highlight the work of the Quality of Life Foundation (QoLF) & URBED, who published The Quality of Life Framework (URBED, 2021). This evidence-based framework identifies six themes in the built environment crucial for assessing relationships between places and people:  control, health, nature, wonder, movement, and community. More recently, Dissart & Ricaurte (2023) have proposed the capability approach as a more comprehensive conceptual basis for the SV of housing. This approach expands the work of the QoLF, focusing the discussion on the effective freedoms and opportunities that the built environment, specifically housing, offers its inhabitants. It serves as a means to gauge the effectiveness of housing solutions and construe SV.

Created on 16-11-2023 | Update on 23-10-2024

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Financialization

Author: M.Horvat (ESR6)

Area: Policy and financing

Financialization, as a broad concept, denotes the growing prominence and impact of financial institutions and markets. Within the realm of housing, financialization refers to how finance plays a pivotal role in rendering housing as a highly liquid asset, thus erasing distinctions between income and wealth distribution (Aalbers, 2016; Stephens & Hick, 2022). Moreover, financialization encompasses the rising dominance of institutional investors as primary participants in the housing market, effectively elevating housing to the status of a distinct asset class. Aalbers (2016) defines financialization as “the increasing dominance of financial actors, markets, practices, measurements and narratives, at various scales, resulting in a structural transformation of economies, firms (including financial institutions), states and households” facilitated by the combination of “economic circumstances, conscious government decisions, unforeseen consequences (“negative externalities” in economist speak) of government decisions, and financial-technical possibilities” (p. 118). In the housing sector, financialization encompasses a diverse array of activities and strategies pursued by both institutional and private investors. These include practices such as debt management, securitization, and the establishment of real estate investment trusts (Holm et al. 2023). Central to this phenomenon is the treatment of housing as a commodity. Commodification, broadly defined as the process by which the economic value of a thing dominates over its other uses, means that housing's function as real estate supersedes its role as a place to live (Madden & Marcuse, 2016).                  The evolution of global investment and financial markets has led to a structural shift in housing, culminating in its commodification. As a result, housing is primarily seen as a commodity rather than as a place of residence (Farha & Porter, 2017), and it is turned into a commodity that accumulates wealth which can be bought or sold on global markets. Consequently, housing has increasingly become a means of wealth accumulation for a privileged few, exacerbating its affordability crisis for the broader population. Therefore, the financialization of housing poses a significant threat to human rights by disconnecting housing from its essential social function as a place to live. Financialization has sparked significant interest in housing studies, emerging as a novel process shaping housing institutions (Hick & Stephens, 2022). This interest surged notably in the aftermath of the global financial crisis (GFC) of 2007-08, underscoring the heightened attention paid to financialization in research circles (Holm et al., 2023). Moreover, scholars argue that the financialization of housing is not only pertinent to housing researchers but also to welfare and poverty researchers. Adopting a theoretical lens rooted in the “varieties of capitalism” approach to the welfare state, the extent of financialization within housing markets is viewed as a determinant of national growth levels and is regarded as a driver of growth (Hick & Stephens, 2022) The financialization of housing has led to significant changes in European housing systems, manifested in various effects and forms including rising house prices, declining rates of home ownership, an increase in the private rented sector, deteriorating housing markets, and decreased affordability of housing (Stephens & Hick, 2022). The trend towards financialization is changing the housing market and increasing income inequality in a society, while fuelling housing price instability by encouraging speculation (Dewilde & de Decker, 2016; Fields, 2016). Financialization is thus an obstacle to the affordability and stability of housing supply. The best example of this is the GFC, which has its origins in speculative mortgage derivatives. Stephens et al (2015) state that “the nature of tenure and its relationship with finance reflect the role of the state and the market as sources of (housing) welfare.” The responses of different governments and housing markets to the GFC varied across Europe (Whitehead, 2014). This was confirmed by Holm et al. (2023) and their comparative analysis of financialization in seven European cities, who found that each city filtered global processes differently due to “place-specific historical and socio-political arrangements” (p. 159). Financialization thus introduced a new logic of economic conditions for the provision and distribution of housing, facilitated by innovative financing practices that promoted housing as a safe, low-risk, high-return investment opportunity (Holm et al., 2023). The continued financialization of housing is anticipated to exacerbate affordability challenges for both mortgage homebuyers and renters, with renters experiencing a greater and more immediate impact (Hick & Stephens, 2022). As Aalbers (2016) asserts, if financialization is the root problem in the housing market, then de-financialization is the solution. De-commodification measures are essential, particularly for tenants and low-income families lacking secure housing. However, tackling the issue necessitates more than just examining the role of financial institutions and markets. It requires to increase the provision of social housing, reforms in housing governance, labour markets, and banking and taxation regulations, which collectively influence the nature and extent of financialization in housing.

Created on 18-03-2024 | Update on 23-10-2024

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