Retrofit or Replace Aging Rental Housing – That Is the Question

A July 9 Times Colonist article, “Victoria Seeks to Nurture its Aging Rental Housing Buildings” indicates that the city is commissioning a study concerning how best to address aging rental housing, in order to maintain affordability and protect renters’ interests. Council wants to increase energy efficiency, and therefore reduce climate change emissions, without replacing existing buildings. This overlooks other important factors to consider when deciding whether to retrofit or replace outdated building.

The study scope should include the following factors:

  1. Building longevity (replacing aging and outdated materials and equipment).
  2. Building energy efficiency.
  3. Seismic security (reducing earthquake risks).
  4. Hazardous material risks (reducing exposure to lead, asbestos, and mould, and improving indoor air quality).
  5. Universal design (accommodating people with disabilities with wider doorways and lower knobs, ramps, elevators, lower countertops, new toilets, grab-bars, etc.).
  6. More diverse and flexible units, including larger family-size units, and adjacent units that can be connected or separated depending on needs.
  7. Improved design, including more shared space for socializing such as courtyards and common rooms, more daylighting, and better window orientation.
  8. More efficient parking and transport management, including reduced parking supply, unbundling, bicycle parking, and carsharing, which reduces costs, reduces traffic impacts, and frees up land for greenspace or more units.
  9. Rooftop gardens and solar panels.
  10. More total units.

 

Considering just one or two of these objectives, retrofits may be cost effective, but considering them together, rebuilding is often more cost effective and beneficial overall. For example, by itself, replacing aging materials and equipment to increase longevity may cost less than constructing a new building; by itself, basic weatherization may cost less than constructing a new building; and by itself improving wheelchair access may cost less than constructing a new building, but such projects would only address a limited set of objectives. When all objectives are considered, replacement is often more cost effective and beneficial overall.

An important factor for long-term affordability is the opportunity that building replacement offers to increase density and total housing supply. The Beacon Arms Apartment is a good example: a current proposal would replace 34 existing units with 87 new units, a 2.5 increase. Of course, not every project can provide that much gain, but if the city allows building owners to increase densities and reduced parking requirements, large housing supply gains are possible. Even if they not initially affordable to low-income households the additional units will help drive down rents and contribute to future affordable housing stock.

We certainly understand why many people prefer incremental revitalization over replacement – it seems cheaper and less disruptive – but that is false economy. If building owners only address one or two objectives by replacing aging materials and basic weatherization, but ignore others, the resulting building will continue to be unsafe (earthquake risk), unhealthy (hazardous materials and poor air quality), inaccessible (lack of ramps), and poorly suited for many households. If the building owners address multiple objectives, there will generally be no savings, so rents will need to increase the same as with replacement, and we lose the opportunity to add more units and more efficiently manage parking and traffic. Major retrofits are nearly as disruptive as new building construction, and require similar tenant displacement. There is little reason for public policies to favor retrofits over replacement, particularly if new construction can increase total housing units.

For that reason, it is important that the city apply comprehensive analysis when evaluating policies that affect retrofit versus replacement of aging rental stock.

Like most products, buildings wear out over time, and at some point it is cheaper to replace than repair. This is often good news overall because it offers an opportunity to increase total housing supply, and therefore long-term housing affordability.

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