How much does resilient housing cost?

How much does it really cost to upgrade an existing home to make it more resilient against disasters and to upgrade to the hazard resistance level specified in the building code? The results of a study published recently by Build Change provides compelling evidence of the comparative advantages, cost savings and wider benefits of improving vulnerable homes, rather than building new ones, for disaster resilience.

By leveraging Build Change’s unique vantage point from almost 20 years of making housing more resilient worldwide, the study was able to draw on close to 1,500 retrofit designs for housing from fourteen countries across the Asia-Pacific region, Latin America and the Caribbean. Through comprehensive analysis of direct construction costs for different kinds of home improvement work, it provides detailed insight into the spending and outcomes of housing investments for a range of housing typologies around the world, both in prevention and post-disaster contexts.

Motivated by a desire to increase the available data around home improvement spending, the study also hopes to dispel a common misconception among governments and investors: that upgrading housing is too expensive. It was led by Build Change’s Vice President of Engineering Lizzie Blaisdell Collins, who explains: “While the feasibility of retrofitting existing housing has been well established across our projects, many people perceive it to be expensive, leading more funding to be directed toward the construction of new homes. This data provides overwhelming evidence to show that home improvement is almost always significantly cheaper, enables the building to resist hazards prescribed by modern building standards, and also brings a range of benefits for homeowners that reach far beyond structural strengthening.”

With over three billion people estimated to be living without adequate housing by 2030, it is hoped that this evidence of the relatively low cost and high gains of improving vulnerable homes can drive greater investment in this area, while supporting wider sustainability goals such as reducing the environmental impact of new construction and supporting safer urban densification.

What the data tells us about investing in more resilient housing

Investments in improving vulnerable housing should be prioritized as a cost-effective means to address the gap in the global supply of adequate housing, and to combat increasing threats due to climate change.

Overall, upgrading vulnerable homes to make them more resilient (“home improvement”) is revealed to be an all-round smarter, more cost-effective investment than new construction: the average cost of home improvement was just 23% of the average cost of new construction across all the samples studied.

The study also shows that the kind of improvements needed to make most homes more resilient against future threats are not as expensive as some governments and investors might fear: most of the housing upgrades analyzed cost less than $100 per square meter, compared to an overall average cost of $588 per square meter for building new homes in the same markets.

Home improvement can be tailored to fit the level of investment available, and made accessible to families of all income levels.

The results highlight the cost variation between different types of home improvement, according to the level of performance targeted, and the flexibility that this can offer with regard to funding and affordability. Key “Risk Reduction” improvements that could substantially reduce risk in the next disaster were the least expensive, followed by more comprehensive “Life Safety” upgrades for the hazard level specified in the building code, with the most involved option being “Life Safety + Future Vertical Expansion,” which demands the highest level of investment but offers the benefit of preparing a home to safely grow in size.

Examples from Build Change’s work with microfinance institutions in the Philippines demonstrate how interventions can be selected and tailored according to the investment that is available, and show how the adoption of incremental improvements is helping to ensure greater affordability for low-income families in the country. However, the study is careful to point out that government subsidies or grants are still a critical mechanism for bridging affordability gaps and reaching the poorest households.

Improving vulnerable housing can be leveraged as a cost-effective means to support safe densification, particularly in urban areas.

The relatively low cost of upgrading homes to add an additional story, compared with new construction, is likely to be of particular interest to cities looking for ways to densify housing or create new housing units at low cost as urbanization increases.

Across the designs studied, the cost of upgrading a house to safely receive an additional story in the future (along with making other improvements) was on average 35% of the average cost of building a new house of the same size, in the same location. In cases where the ground floor of a house was improved and a second floor was added as part of the work, the average cost for preparing for and adding the new space was still less than the average cost of new construction.[1]

Investments in improving existing housing are an opportunity to respond to what homeowners need and want, to make further improvements to the home beyond disaster mitigation.

Home improvement investments can address multiple challenges, by saving lives and preventing housing loss in disasters, while also enhancing the future well-being, quality of life and prosperity of the people who live there.

Beyond the fundamental aim of structurally strengthening homes to reduce their vulnerability to hazards, the designs studied comprised a broad range of interventions: disaster mitigation measures to fortify the structure were typically combined with other improvements, whether through necessity (for example, repairing damage, or replacing worn building materials) or in response to homeowner needs and preferences (such as improving ventilation and drainage, or home expansion). These broader, non-mitigation modifications accounted for over 40% of total spending, demonstrating significant demand from residents for forward-looking interventions with benefits beyond disaster mitigation.

Build Change emphasizes in the study that families may be more motivated to upgrade their homes as a result of these other improvements, which have a more immediate or obvious impact on day-to-day life.

Investments made before a disaster are more cost-effective than those made after a disaster, and enable more of the investment to be directed toward other interventions.

The data reveals how the value of investments in home improvement increases further when made before—rather than after—a disaster, when construction costs were 1.6 times lower and spending on structural repairs was six times less. This leaves more money for home expansion or modifications that can improve people’s quality of life and opportunities, such as improving sanitation or adding an extra room or story. It also adds weight to advocacy efforts by housing experts of the need for urgent, preventative action to address the global qualitative housing deficit before the next disaster.

Footnotes:

1. Per square meter of new space. Compared to new construction of the same size and in the same location. Cost is less when the additional costs of land and site development for new construction are considered.