Scandinavian Working Papers in Economics

Working Paper Series,
Royal Institute of Technology, Department of Real Estate and Construction Management & Centre for Banking and Finance (cefin)

No 14/2: Sustainable renovation strategy in the Swedish Million Homes Programme: A case study

Hans Lind (), Kerstin Annadotter , Folke Björk , Lovisa Högberg and Tord af Klintberg
Additional contact information
Hans Lind: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Department of Real Estate and Construction Management , Royal Institute of Technology, Brinellvägen 1, 100 44 Stockholm, Sweden
Kerstin Annadotter: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Department of Real Estate and Construction Management , Royal Institute of Technology, Brinellvägen 1, 100 44 Stockholm, Sweden
Folke Björk: Division of Building Technology, Postal: Royal Institute of Technology, Brinellvägen 23, 100 44 Stockholm, Sweden
Lovisa Högberg: Department of Real Estate and Construction Management, Royal Institute of Technology, Postal: Department of Real Estate and Construction Management , Royal Institute of Technology, Brinellvägen 1, 100 44 Stockholm, Sweden
Tord af Klintberg: Division of Building Technology, Postal: Royal Institute of Technology, Brinellvägen 23, 100 44 Stockholm, Sweden

Abstract: The first part of the study concerns the concept ”sustainable renovation”. Four parts are identified and then used in the case study: environmental sustainability (including energy efficiency and choice of materials); social sustainability (interpreted as that the current tenants should be able to stay in the area), economic sustainability (the the project does not have to be subsidized and that there is no increase in cost for the social authorities) and finally a new interpretation that is called technical sustainability, which means that solutions with long term reliability is chosen even if this is not necessarily best from an economic and environmental perspective. The second part of the study applies this framework to analyze the renovation strategy of a municipal housing company in the suburbs of Stockholm. This case was chosen because they had clear social ambitions and offered the tenants three alternative renovation options called mini, midi and maxi. Most tenants chose the minialternative and this meant that they could afford to stay and that there was not any increase in the cost for the social authorities. An investment analysis showed that the minialternative had a positive net present value, but that the midi/maxi alternative where more profitable. The company had no specific environmental focus and energy use was only reduced with 8%. Technological sustainability was more important for the company. As a conclusion the study shows that a sustainable renovation is possible but that there are a number of conflicts between the different dimensions of sustainability. Giving more weight to environmental sustainability would increase cost and rents which create problems from a social perspective. From an economic perspective the midi/maxi alternatives were more profitable but then some households would have to move out because too high rents.

Keywords: housing renovation; sustainable renovation; million-homes programme; Sweden

JEL-codes: Q58; R30; R38

20 pages, March 21, 2014

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