5 Challenges for housing corporations

15 March 2021 - Published by Ulla-Britt Krämer

Because of the Climate agreements housing associations are facing huge challenges in the coming years to make their housing stock sustainable before 2050. The current renovation solutions like Zero on the Meter and other initiatives are far too expensive and cannot accommodate the capacity to improve all homes in time. Which makes the sustainability transition almost impossible. Still housing associations have to provide in sufficient affordable and good homes for their tenants! Houses that are CO2 neutral.

What are the challenges that housing corporations struggle with and what are there solutions to the problem?

1. With current approach tenants will not be able to afford their energy costs and rent
Because of the continuing increasing energy costs, tenants can eventually no longer pay their rent. Energy poverty is a widespread problem across Europe, as between 50 and 125 million people are unable to afford clean indoor thermal comfort. A common European definition does not exist, but many member states acknowledge the scale of this socio-economic situation and its negative impact translated into severe health issues and social isolation. How can we prevent this situation from happening?

2. Current approach makes investments too big
In urban areas, there is already a shortage of social housing. The number of single to 2 person households increases (household dilution). In addition, people are urged to live independently as long as possible. So the next few years corporations are being encouraged to build additional properties and new houses. This is what governments are also imposing. At the same time existing houses have to be made sustainable. Which makes the investment task huge. That is why governments have to contribute as well. For example in the Netherlands housing corporations are contributing to 100,000 homes that need to be made gas free. In order to make the plan possible the government adds 500 million euros to the billions that corporations are investing. How can we make sure that both sustainable renovations and building new houses can be done?

3. Current project focus prevents major sustainability transition
The phased approaches that are now often used can result in the so-called 'lock-In effect '. Because of the continuous stacking of measures, the necessary big steps are not being made. In addition, the infrastructure for gas, electricity and possible heat must also be maintained. The fossil dependence remains unacceptably large.

At the moment the prices of the Zero on the Meter renovation are so high that even including the Energy Performance Compensation (EPV) does not make the business case lucrative. This calls for lower prices and more standardization for renovation solutions and packages. The only way to do this is when corporations are willing to commit to investors and together they invest in product development, production facilities and industrialization, leading to substantially lower prices and better products. How can we make sure that forces are being united to be able to reach the climate agreements?

4. Serious shortage of work force available now and in the future
The construction industry is dealing with a serious shortage of labour that will only increase during the years to come. The traditional ways of building still involve thousands of workers

on the construction sites. These workers are already hard to find. We have to find innovative ways of how the work can be done. This calls for more standardized ways of production and renovations. How can we do that?

5. Current project focus will not lead to required mass production
The current project-based approach of housing associations is too expensive and too small. At the moment there is a lack of a cross-functional refurbishment products with professional handling processes across all trades, guaranteed savings, guaranteed costs and a significantly shorter amortization. Corporations will have to take a different role as a client. No longer per project with invitations to tender and own programs of requirements. But more widespread daring to think and act in construction flows rather than project flows. This means more cooperation with other corporations and investing in multi-annual pathways. This reduces transaction costs substantially and enables learning curves to be passed on with partners with a positive impact on price, satisfaction and efficiency (reduce failure costs). How can we make sure that housing associations are willing to look over their own boundaries and walls?

Solution: the INDU-ZERO approach!

The Interreg North Sea Region offers the solution to these challenges, it is called: INDU-ZERO. The INDU-ZERO project, which is also funded from the European Union, is a collaboration of 6 countries (the Netherlands, Belgium, Germany, Sweden, the United Kingdom and Norway) with local authorities, educational institutions and industry as partner. INDU-ZERO aims to design a blueprint for a factory which can produce the renovation packages at half the cost and can boost the capacity to 15,000 packages per year. This innovative factory can be built in the different participating countries after the end of the project (starting in 2021) which makes it possible to reach the climate targets. Sounds good right? But it does ask for guts to step in and join. Are you joining? Follow INDU-ZERO and think along in the solutions for the future!

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