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10:30   General Paper Session W55 - Economics of the built environment
Chair: Florence Phua
10:30
15 mins 		System-search ORGANISING LARGE SCALE GREEN COVERED ROOFS, Classification of green roof specifications and green roofs implementation; the economics of green roofs
Peter Teeuw, Christoph Maria Ravesloot
Abstract: During the last two decades the use of plants on rooftops has grown fast. Cities use different arguments to make policies for large-scale programs possible. One argument is that green covered roofs contribute to reduction of CO2 emissions on the local scale of the building, which is mitigation. CO2 reduction can be realised because there is a contribution to extending the life expectancy of the roof. There is a potential reduction in fossil energy use, especially in cooling. On this scale water can be retained and PM can be captured, which are adaptation approaches. When roofs are covered with plants on a large scale this will also contribute to adaptation, often being part of sustainable water management. However there is an intriguing difficulty in organising the intertwining of these two approaches to climate, energy and water: It is very hard to organise, since the stakeholders keep their natural roles in their traditional organisational patterns. They are not accustomed to collaboration in this new context. New patters and new collaborations however have to be established soon to speed up the process. The paper will show the arguments for mitigation and adaptation approaches on the scale of buildings and on scale of cities. These arguments are elaborated against the background of cost and benefits from the major stakeholders. Calculations of municipalities showed that benefits for private partners, investing in green roofs, are smaller compared to the public benefits on a larger scale. The total private benefit can even be negative. Nevertheless the summation of private and public benefits is nearly always positive. The calculations also show that the total benefits are the largest in the high-density areas surrounding the city centre and lowest in industrial areas. The city centre itself is most beneficial for public benefits. The paper summarises the arguments of cities, as part of their policy and put them opposite of the arguments of urban designers in order to distinguish gaps between intentions of policy makers and design criteria of urban planners, which led to recommendations for both. Then an analysis shows the potential for successful collaboration as well as possible risks. The decision makers, more specified the public sector, seems to have the key to the breakthrough. They have the largest financial benefits to get the right roofs on the right places. Acquire knowledge, sharing knowledge (and experiences) and moreover the inevitable change in the way one collaborates with the partners is the first step to make. From the construction contractors perspective it is important that their product will fit the private investors needs as well as the public subsidies interests and still make a profit. They will serve the market, but who will direct the market? The paper will conclude with recommendations for improvements in collaboration to speed up the realisation of green covered roofs on large scale. Keywords: Green Covered Roofs, Design and Construction Process, Sustainable Water Management, Green Urban Policy, Cost benefit.
10:45
15 mins 		System-search BUILDING RENOVATION – A NEW INDUSTRY ?
Terttu Vainio
Abstract: Based on construction economics, building economics and assessments of building service life, the renovation need of buildings is notably higher than the actual amount of building renovation. As energy saving renovations become more common, the volume of building renovation is forecast to grow even further. Building renovation suffers from both a lack of suppliers and tailored solutions. This study has searched for a reason for this phenomenon. This is a theoretical study in economics, testing the rationalisation ability of three different economics theories, including the theory of construction economics, evolutionary economic theory and the theory of creating customer value. Each of these theories explains a part of the phenomenon. In accordance with path dependence theory, companies in the construction industry have locked on new construction, and in the sector of new construction, companies have developed from small to large, following the industry evolution theory. International companies have entered the market looking for business where the volumes suit them. New construction has created buildings that cannot necessarily be renovated with local skills. In accordance with construction economics theory, renovation construction competes in all owner sectors with other expenditures, and since renovations can be postponed, they often are. Demand is not activated by interesting supply or by supply corresponding to the needs. Renovation projects are implemented with a production-oriented new construction concept. In addition, a user-oriented approach does not produce a good outcome if it does not include catering for the special features of renovation construction. The competitive factors in renovation construction are specific to such an extent that it is a different industry than new construction.
11:00
15 mins 		System-search ANALYSING THE TRANSMISSION PATTERN WITHIN THE FRAMEWORK OF HOUSING SUPPLY AND MONETARY POLICY IN AUSTRALIA
Junxiao Liu, Kerry London
Abstract: Housing supply is one of important components of the housing sector. Compared with an increasingly strong housing demand, the growth rates of total housing stock in Australia have exhibited a downward trend since the end of the 1990s whilst the significant adjustments in the Australian monetary policy were being implemented. This research aims to estimate the nature of the relationship between housing supply and monetary policy by a vector error correction model. According to the empirical results, a transmission pattern comprised of the indicators associated with housing supply and monetary policy can be identified, which suggests that there is a significant interrelationship between monetary policy and the supply side of the housing sector in Australia.
11:15
15 mins 		System-search THE CONSTRUCTION INDUSTRY AND THE CHALLENGES OF THE MILLENNIUM DEVELOPMENT GOALS
Jorge Lopes, Rui Oliveira, Maria Isabel Abreu
Abstract: Keywords: construction industry, economic development, MDGs, Sub-Saharan Africa It has long been recognised that the role of the construction industry in socio-economic development goes beyond its share in national output. A number of studies have focused on the issue of employment creation others have emphasised its multiplier effect on other sectors of the economy. The construction industry has also historically been linked with the process of industrialisation and urbanisation. Existing paradigms on the structural change of the construction industry as national economy develops over time has been evolving from an approach that stresses the role of construction investment (indeed physical capital accumulation) as an engine of economic growth to one where the pattern of the evolution of the industry should follow that of the general economy. The role of construction infrastructure in the process of development has gained a new stimulus following the United Nations Millennium Declaration at the Millennium Summit in New York in September, 2000. Eight Millennium Development Goals (MDGs), measured through 21 targets, were devised. According to international development agencies as well as some writers concerned with the development process, the services provided by infrastructure have a pervasive effect on the economic and social targets related to the MDGs. An important question which should be the concern of the construction economics research community is, thus, how a well functioning construction industry could contribute to the attainment of these targets. Using data obtained from World Bank and United Nations publications, and making use of an analysis developed in previous works, this study presents some prospects of the pattern of development of the construction industry in two groups of countries in Sub-Saharan Africa, according to their level of economic development. Some insights for the growth strategies of the construction industry in the groups of countries are also presented.
11:30
15 mins 		System-search RANKO BON REVISITED: THE VOLUME/SHARE RELATIONSHIP
Tullio Gregori, Roberto Pietroforte
Abstract: As described by Maddison, economic development has been characterized by “the bell shaped pattern of relative industrialization and de-industrialization”. In the early stages of economic development construction adds the physical capital utilized by the rest of the economy, but as the economy matures growth ceases to be extensive and becomes intensive in terms of physical capital. When manufacturing reaches maturity, so does construction. Hence the contribution to gross national product by both sectors starts declining, while services become the new engine of the economy. In this regard, Bon wrote that, at some point of economic development, the relative decline of construction is accompanied by the absolute decline of its production volume. In this paper we try to assess these relationships using the database provided by the United Nations Statistics Division that covers more than 2000 countries for years 1970-2008. This unbalanced panel isanalyzed using standard econometric techniques that should reveal the long term pattern betweenconstruction and growth. Keywords: Construction volume, gross national product, construction sector, econometric technique
11:45
15 mins 		System-search TRUST AND MONEY: 20 YEARS OF (NO) PROGRESS?
Richard Fellows
Abstract: Keywords: behaviour, finance, globalisation, projects, trust. ABSTRACT In almost 20 Years since Latham published the interim report ‘Trust and Money’ in which he asserted that there was too little of either in the UK construction industry, has anything changed? This paper addresses issues of what trust is, how it is created and its fragility, and progresses to examine how trust operates in the construction industry. The second major thread, money, is examined in the context of the economics and financing of construction projects and organisations in an era in which globalisation of the finance industry has occurred as well as global and local crises in that industry and many countries economies. Market emphases and process changes have occurred at several levels, continuing existing trends but also spawning new ones. A key question, which is examined as the underpinning, central theme of this paper, is that although structural changes and procedural changes are highly evident, what has changed in behaviour within the industry, why, and with what consequences regarding trust and money?
12:00
15 mins 		System-search INFORMATION SYSTEM FOR COST ESTIMATION OF COMMUNAL INFRASTRUCTURE
Christopher Hagmann, Christian Stoy
Abstract: As in many industrialized countries, the population of Germany is constantly getting older and smaller nowadays. These demographic changes cause adaptations of technical and social infrastructure in both quality and quantity, to ensure their aspects of economy and usability at long term. Therefore, urban development planning and municipal infrastructure planning have to work closely together. Decisions like expansion, renovation, re-dimensioning or even closing of municipal infrastructure should be based on long term strategies of urban development, in order to keep the budget of future remaining costs. For this reason, development strategies and important new projects have to be evaluated within their infrastructural running and life cycle costs. A current research project in cooperation with a German Municipality will enable the involved planning teams to systematically integrate the consequences of demographic changes in their infrastructural projects in terms of supply quality and cost efficiency. As part of the project, this first study prepares the database of cost indicators and their drivers for municipal infrastructural project cost estimation in early project phases.
12:15
15 mins 		System-search ETHICAL AND SUSTAINABLE EMPLOYMENT IN CONSTRUCTION: THE CASE OF BLACK AND MINORITY ETHNICS’ (BME’S) ENGAGEMENT
Paul Missa, Vian Ahmed
Abstract: The instability of employment resulting from fluctuations in demand and the widespread use of contracting systems poses major problems of attractiveness to the construction industry. As this practice has a considerably negative impact on training, retention and progression of manpower in the industry, coupled with the fact that the industry is one of the largest employers, positioned as most country’s top employer with over two million employees in the UK, for example; which had been projected to increase into the foreseeable future had it not been negatively impacted upon by the recent downturn, the inevitable situation of anticipated skills shortages in a number of professions would have resulted. Even then, as much needed investment is cut from training in the sector, this issue of skills shortages can be very devastating in the event of an upturn which is indeed certain. Consequently, it is anticipated that the construction industry should have been looking to expand its recruitment base and therefore would become progressively multicultural to reflect the diversity of the population. Although the objective of equal opportunity policies is to ensure proportional representation to job opportunities by eliminating differential treatment based on an individual’s social group identity, adopting a policy, however, has not guaranteed to enhance opportunities for minority groups. Indeed there is a view that many equality initiatives can be superficial gestures devoid of any real action and substance. As a result, the paper has the aim of considering the ethical as well as the sustainable aspects of increasing the engagement of the BME sections of the population who, hitherto, have been underrepresented. Is it not the case, that migrants perhaps are confounded by the complexity of the professional accreditation processes, for example? It is worth noting that the white population has been seen to be aging while BMEs have quite a younger age profile making it sustainably intelligent to proportionally engage this section of the population for the future of the industry. Furthermore, it is ethically prudent to involve the sections of the population whose involvement has, until now, been very minimal in the industry. It is probably, for instance, a recipe for bitterness and resentment where religion has been used as a tool of marginalisation in the industry. Keywords: BME, ethical, sustainable, diversity and employment.