image missingTrue Value Metrics (TVM)
Meaningful Metrics for a Smart Society
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Date: 2018-05-22 Page is: DBtxt001.php L0700-CS-PC-Buildings

PHYSICAL CAPITAL
BUILDINGS
BUILDINGS are a big part of the economy ... but they need to be much more efficient

Buildings are the most visible part of any city
Buildings, more than anything else, communicate the character of a city. It is the buildings that are seen more than anything else. When the buildings are 'ho-hum' then the place is going to be thought of as 'ho-hum' as well. Beautiful buildings make a huge difference.

STANDARD VALUE PROFILE for a building GO TOP
PAST / HISTORY
A TVM Balance Sheet summarizes the past / history


CURRENT UNSUSTAINABILITY
TVM Impact Report summarizes current impact and operating unsustainability


PRESENT STATE
A TVM Balance Sheet summarizes the present state including future impact


In order to construct a building, substantial resources have to be mobilized and then consumed to create the building. The financial accounts related to the construction of a building show how a variety of inputs are consumed ... a variety of building materials, labor payroll related to many trades, HVAC machinery, the use of equipment, the use of energy and so on ... not to mention the payments for permits, professional services and taxation. In the end, this adds up to the total cost of the building.
But there is really a lot more that ought to be numbered. ALL of the inputs are associated with a supply chain which not only has the same types of financial costs, but there are also social impacts and environmental impacts as well that need to be understood and brought into account.
ALL of the inputs not only has a financial price ... the amount paid for the input ... but also a related impact on society and an impact on the environment.
LAND is bought at a price, but there is also IMPACT associated with the change in use of the land. Where a big building is being built where a small building once stood, there is little change in the impact associated with land, but in the case of an apartment block being built in what has been coastal wetlasnds, then there is a large environmental impact that should be taken into consideration.
LUMBER is bought at a price, but the harvesting of lumber has had an impact on a forest and the ecosystem services formerly being provided by the trees. Labor in the supply may or may not have been paid at a fair wage. Energy in the processing and transport of lumber has been paid for in money, but the complex impacts of energy with respect to natural systems must also be brought into account.
CONCRETE is bought at a price ... but the impact of concrete on the environment as cement is manufactured is huge and needs to be brought into account.
STEEL also has an important environmental impact as it is manufactured.
All sorts of PLASTICS and CHEMICAL COMPOUNDS are used in construction ... all of which have impacts over and beyond what is reflected in the financial transactions. Some of the impacts have long term impact on the performance of the building during its lifetime.
PRESENT
In financial terms, the present value of a building is the price that is supported by the market ... the amount a willing buyer and a willing seller will garee to.
But there should be more to the value of the building than the (financial) market value.
The PRESENT VALUE OF the FUTURE
There is also the present value of the future ... maybe the building has very high energy costs, both in terms of money to be spent for heating and air conditioning, but also the environmental impacts of this high energy use. Maybe there are toxic compounds used in the building that are having an environmental health impact of people using the building. These issues should be numbered using a computation very similar to the Net Present Value calculation used in conventional financial analysis.
Where a building is used by a large number of people, there are all sorts of impacts associated with the people and a need for relaterd services. These may be related to energy, water and sewage, transport, recreation and other services.

High density urban communities -v- suburban sprawl
For the past century, more and more communities have been built in the 'suburbs' rather than center city. This was anabled by the automobile and various forms of transit systems and has been a feature of 'development' now for a long time. While the financial performance associated with suburban development has been favorable, the social and environmental performance has not. Living in suburban developments has social costs and environmental costs that have not been numbered with any rigor, but it is becoming increasingly clear that this sort of development cannot be sustainable.

Houses, apartments ... where people live
Churches, Cathedrals, Mosques, Temples
Buriel Sites ... Pyramids / Mauseleums
Buildings associated with transport ... Railway Stations / Airports / Seaports
Buildings associated with Government ... Parliament buildings, Courts, Police and Fire Stations
Slums / Informal Settlements
Everyone needs somewhere to live ... to shelter. Homelessness is not really an option. Shelter is a necessity. For people in deep poverty, the cost of housing must be in balance with their resources, and for many this means that the only option are slums and informal settlements.
While these areas provide shelter ... they lack essentially most everything needed for living.
During the last half century the growth of urban informal settlements (slums) has been very rapid as rural people have migrated into the cities. Well over 50% of the world's population now live in urban areas, and the proportion continues to grow.
Office Blocks
Specialized Industrial Buildings
Department Stores
Shopping Malls
Strip Malls
Museums / Art Galleries




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