ECONOMIC CAPITAL / PHYSICAL CAPITAL
BUILDINGS
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BUILDINGS are a big part of the economy ... with a long life
They need to be built in a more sustainable way and operate more efficiently
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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.
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Buildings have a long life
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The minimum life for a building is probably about 40 years, but they often have a much longer lifespan, like 120 years. Long term thinking applies more in the case of buildings and urban design than in practically any other field of endevour.
Many of the items that are used in a building have shorter lives, and this offers the opportunity to upgrade buildings in major ways to improve their operating performance.
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New York Empire State Building
In the case of the New York Empire State Building that was built in the 1930s, there have been two major upgrades, one in the 1960s and another around 2012
'http://truevaluemetrics.org/DBpdfs/Buildings/ESB/ESB-year-three-press-release-140814.pdf'
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Open PDF ...
ESB-year-three-press-release-140814
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More about the Empire State Building sustainability upgrade
'http://www.esbnyc.com/esb-sustainability'
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Open external link
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STANDARD VALUE PROFILE for a building
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GO TOP
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BALANCE SHEET I ... PAST / HISTORY
True Value Balance Sheet I summarizes the past / history
STATEMENT OF UNSUSTAINABILITY
Unsustainability Statement summarizes impact of activity on unsustainability
BALANCE SHEET II ... NET PRESENT STATE
True Value Balance Sheet II summarizes the net present state including future impact
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TRUE VALUE ACCOUNTING FOR THE CONSTRUCTION OF A BUILDING
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 tells all about financial cost of all the inputs that are used ... 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 payments for permits, professional services and taxation. In the end, this adds up to the total money cost of the building. All of this is accounted for using 'money' units of measure.
But there is a lot more that must be numbered.
ALL of the inputs are associated with a supply chain which not only has the same types of financial costs, but also social impacts and environmental impacts as well. All of this needs to be understood, numbered and brought into account.
ALL of the inputs not only have a financial price ... the amount paid for the input ... but also related impacts on society and the environment.
LAND
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 had been coastal wetlands, then there is a large environmental impact that should be taken into consideration.
COMMUNITY characteristics change when a building is built. Quality of life is impacted by the scale and nature of the building. Rules about ZONING were designed
BUILDING MATERIALS
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.
MACHINERY AND EQUIPMENT
Modern machinery and equipment is powerful and precise ... enabling amazing structures to be built.
LABOR
Not always, but in many places, labor used in construction is exploited in ways that are unseemly. Many iconic buildings were built by laborers who worked under terrible dangerous conditions for little pay. Trade Unions helped to get better pay and improve working conditions, but in many places around the world workers are treated very badly. There should be a numbering of this so that there may be an accounting.
PROFESSIONAL SERVICES
High performance professional services translates into high performance buildings. Good architects and engineers add substantial value to a building for its whole lifetime.
FINANCE
Finance should be about enabling the costruction and operation of a building, for which there should be appropriate remuneration. In too many cases the main role of a building relates to financial gain more than anything else which produces a 'race to the bottom'. There are many legitimate reasons for building a building, but there are also a variety of ways in which buildings (real estate) are used for illegitimate purposes like, for example, 'money laundering', tax avoidance, etc.
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.
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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.
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Houses, apartments ... where people live
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Churches, Cathedrals, Mosques, Temples
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Buriel Sites ... Pyramids / Mauseleums
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Buildings associated with transport ... Railway Stations / Airports / Seaports
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Buildings associated with Government ... Parliament buildings, Courts, Police and Fire Stations
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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.
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Office Blocks
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Specialized Industrial Buildings
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Department Stores
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Shopping Malls
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Strip Malls
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Museums / Art Galleries
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