Energy Cost of Preservation – Policy Rethink?

Heritage preservation is a contentious topic across the UK and one that can not be measured on a single factor. ULI were privileged to have Christian Hilber, Professor of Economic Geography, LSE share his research into The Energy Cost of Preservation as part of the ULI Research Insights series. The forum provided a fascinating debate which also included Andrea Carvajal, Associate, Sturgis Carbon Profiling and Joe Baker, Head of Service Management, London Borough of Haringey to explore the value of preservation and how whole lifecycle factors should also play an important role in heritage decisions.

(see the link below to Prof. Christian Hilber’s presentation)

Preservation of UK Housing

  • Widespread in the UK – 10% housing in England
  • Expanded across UK significantly since around 1980
  • “external benefits” are not limited to residents but community, commuters, tourists

Earlier research indicates the preservation created a 3.5% uplift in value, while further research in New York proves designation boosts value of properties outside historic districts by 12% but the same properties sell at 5% discount prior to designation. Beyond value further cost factors such as higher cost for; maintenance, energy, renovation and influences such as density limitations which limit supply in an area should also be considered.

Prof. Hilber’s research tries to quantify the costs of preservation but recognises that policy creates:

  • Drives up energy efficiency installation costs or forbids them altogether
  • Discourages investment and reduces sensitivity of household responses to energy price increases.
  • Creates compounding energy consumption levels (inability to bring buildings to modern building code levels).

The climate implications and cost of energy continue to rise resulting in an increase in the installation of energy efficient devices or measures to reduce long-term consumption. However current preservation policy would indicate the benefits of more efficient homes will be less in conservation areas.

Based on data derived from energy prices and domestic use data for England DECC (now BEIS) with forecast to 2055, Prof. Hilber’s research found:

  1. Energy price increases reduces local energy consumption
  2. Neighbourhoods with high percentage of buildings in Conservation Areas or areas with a high percentage of listed buildings resulted in a lower level of reduction in energy consumption compared to non-preserved areas

Interestingly the results also demonstrated that increased energy prices did result in increased introduction of energy saving initiatives. Hilber also tried to find the optimum point for preservation and energy consumption.  In reality though, current political pressure results in increased preservation and thereby increases the deadweight loss of preservation. As such the research found:

  1. Preservation policies reduce investments in home energy efficiency installations and thus increase energy consumption and carbon footprint.
  2. Preservation policies in England therefore have significant internal and external energy cost factors

Policy recommendations

  • Consider not only the benefits but also the economic and environmental costs imposed by designation decisions. Designate only if the benefit outweighs the costs (current and long-term).
  • Review guidelines on heritage preservation and consider changes to explicitly take in to account external factors that limit owners or communities meeting future community or climatic needs.

Under the context of global environmental goals, such as keeping global warming to below 2 degrees celcius, are the costs of preservation too great or could they be reconsidered to meet the needs of the future rather than preserving the ‘past’? Highlighted by the debate, heritage preservation from policy perspective needs to be seen from a societal lens, commercial and longer-term outlook, not just from a point of preservation.

Many leading property owners have ambitious goals to reduce carbon emissions across their portfolio. Grosvenor for example has an aim to reduce carbon emissions by 50% by 2023 and is addressing this challenge in a holistic view that includes embodied carbon, which are not being considered under current preservation policy. This indicates preservation policy is not taking a holistic view of as it relates to climatic or market ambitions.

On a local authority level, Councils have a duty to both preserve and reduce carbon consumption, but council approaches are subjective to local interpretation resulting in conflicting opinions and dedications. Given the current housing and development pressures on UK urban environments there is a need for more clarity around the level of preservation. In addition, the cost of retrofitting preserved buildings is a huge challenge for local authorities.

Further challenges and considerations include:

  • Lack of preservation consistency due to subjective views and possible planning constraints for many local authorities. Examples include:
    • Double glazing allowed in Bath but not in Muswell Hill conservation area
    • Planning permission for external wall insulation but not pebble dashing
  • Insurance costs in the future may increase for preserved buildings, making them a liability
  • Offsetting carbon emissions is a solution for preservation in some Local Authorities but has long-term cost implications

‘No point preserving a building or city if we can’t afford to live in it or its not adapting to future climate’

The forum concluded that current preservation policy and standards as they relate to energy costs should be reconsidered.  There is a need to understand if preservation should be driven by the public sector or the public but also that wider market considerations such as technology should be considered. In addition, a systematic review of the entire stock should provide insight into why each building is preserved but also allow for market solutions or the strictness of preservation to be considered in holistic terms.

Public awareness was also raised a priority area for policy, investment and ownership, with a necessity to introduce carbon reduction mechanisms that address the energy or climatic shortcomings of preservation. Furthermore, private individuals and landlords should integrate wider social benefits into their investment decisions to allow for investment in energy reduction solutions, as the lack of energy conservation investment impacts occupiers who bare the ongoing costs.

Preservation plays an important part of the urban fabric and the forum highlighted that energy costs as it relates to preservation is not just a ‘heritage’ challenge but one that should be viewed holistically and applied with a dynamic approach. A more consistent approach to preservation should address some of the shortcomings but wider global climatic challenges, investment and societal factors should also be considered to ensure preservation has a purpose in todays and future urban environments.

View the preservation here: Energy Cost and Preservation_Prof. C. Hilber

Also a special thank you to AECOM for hosting this forum.

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