The economic analysis of a building is a complex subject and traditionally it has focused on a single aspect of the structure or a single part of the construction process. Dr Tempelmans Plat is a leading proponent of a new methodology which focuses on the building as a stock of services to be supplied over a long lifespan. This method is more realistic since it takes into account the changes in use and the adaptation of the building over its life. This book will be the first to make this method comprehensible to a wide audience of postgraduate students and professionals in the field of construction economics.
Table of Contents
Foreword by John Habraken, Preface, Acknowledgments, INTRODUCTION, Structure of the book, Part One: PRODUCTION OF A BUILDING AND USE OF ITS SERVICES, Chapter I.1. Introduction, Chapter I.2. Use of a Building as Means to the Ultimate Goal, 2.1. Production of a building as a product, 2.2. Use of a building's services, 2.3. Exploitation as intermediate process, 2.4. Conclusion, Chapter I.3. Service and Technical Solution, 3.1. The performance concept, 3.2. Condition, service and solution, 3.3. A problem of transformation, 3.4. Dimensions of demand and of supply definition, 3.5. Maximisation of the solution space, 3.6. Conclusion, Chapter I.4. Levels in the Built Environment, 4.1. The building in a system of levels, 4.2. Levels and life spans: change, 4.3. Responsibilities, 4.4. Conclusion, Chapter I.5. Agents in the Building Process, 5.1. Three processes, 5.2. Use of the building's services: demand planning, facilities management, 5.3. Exploitation of the building: intermediate role of property management, 5.4. Production of the building: design and contracting, 5.5. Advise and intervention, 5.6. Conclusion, Chapter I.6. Time and Change: Relating Money, Technique and Environment, 6.1. Money and technique: contradiction?, 6.2. Change: balance of expenditures, 6.3. Economics and sustainable building, 6.4. Conclusion, Chapter I.7. Summary, Part Two: COST CALCULATION AND VALUATION AS BASIS FOR DECISION-MAKING - A THEORETICAL FRAMEWORK, Chapter II.1. Introduction, Chapter II.2. Short Planning Period Versus Long Life Span, 2.1. Investor and the building, 2.2. User and the building, 2.3. Designer, contractor and the building: frequent return , 2.4. Periods and life spans: a set of definitions, 2.5. Life span and cost calculation, 2.6. Conclusion, Chapter II.3. Annual Cost Calculation, 3.1. Expenditures to be transformed into costs
3.1.2. Total discounted costs or annual costs, 3.1.3. Financing expenses not as cost estimate , 3.2. Transformation of the investment expenditure: depreciation, 3.2.1. The goal of depreciation, 3.2.2. A building as a stock of services, 3.2.3. Economic life span as depreciation period, 3.2.4. Degressive depreciation on a building as an entity, 3.2.5. Progressive depreciation on separate parts of a building, 3.2.6. Progressive and degressive depreciation combined, 3.2.7. No depreciation on land, 3.3 Maintenance, adaptation and decomposition , 3.3.1 Maintenance versus adaptation, 3.3.2 Adaptation: refurbishment, renovation and upgrading, 3.3.3. Adaptation: decomposition and installation activities, 3.3.4. Final demolition, 3.3.5. Disposal cost, 3.4. Annual total cost calculation, 3.4.1. Annual total costs of a separate service, 3.4.2. Annual total costs of a set of services, 3.4.3. A decomposition scenario; no LCC needed, 3.5. Steps in decision-making: demand definition and cost calculation, 3.6. Conclusion, Chapter II.4. Property Valuation, 4.1. Change of the stock of services , 4.1.1. Stock of services, 4.1.2. Identical replacement, 4.1.3. Non-identical replacement, 4.2. Resale value of a building, 4.2.1. Maintenance fund, 4.2.2. Demolition fund, 4.2.3. Building value: value of stocks of services minus funds, 4.3. Property value: land and building, 4.3.1. Value of land, 4.3.2. Property value
4.4. Conclusion, Chapter II.5. Price Changes, Property Value and Annual Costs, 5.1. Price changes and goal of the investor, 5.1.1. Nominal value, purchasing power, replacement value, 5.1.2. Inflation, construction and land price changes, 5.2. Continuation of the exploitation process: replacement value, 5.2.1. Prices of comparable buildings and comparable services, 5.2.2. Replacement value of buildings and of related services, 5.2.3. Replacement value of land and related services, 5.3. Course of property value due to construction and land price increase, 5.4. Conclusion
Chapter II.6. Economic Description of Buildings and Services: Factory, Dwelling and Bank, Chapter II.7. Summary, Part Three CONSEQUENCES FOR AGENTS IN THE BUILDING PROCESS, Chapter III.1. Introduction, Chapter III.2. User and Facilities Manager, 2.1. Facilities management in each using process, 2.2. Implementation of the performance concept, 2.2.1. Demand definition based on performance concept, 2.2.2. Levels and performances, 2.2.3. Performance-based contracts, 2.3. Annual cost consequences of variation in demand period, 2.3.1. Short life span: high cost of service, 2.3.2. Tax regime and housing costs, 2.3.3. Loans over different repayment periods, 2.4. Insourcing or outsourcing: a proper financial basis, 2.4.1. Support for private home-owner's investment decision, 2.4.2. Insourcing, outsourcing: conflict of interest, 2.5. Conclusion,
Chapter III.3. Investor and Property Manager, 3.1. Property management for each building, 3.2. Short-term and long-term investment, 3.2.1. Price changes, costs and investment decisions, 3.2.2. Long-term investors: housing associations and professional building-users, 3.2.3. Short-term investors: institutional investors and private home-owners, 3.3. Keeping buildings usable: valuation and adaptation, 3.3.1. Property valuation, 3.3.2. A decomposition scenario as basis for determining decomposition cost, 3.3.3. Residual value and adaptation investment, 3.3.4. Investment in flexibility as a type of over-capacity, 3.4. Valuation and production decision, 3.4.1. Return on real or historical investment, 3.4.2. Buildings of historical value, 3.5. Conclusion, Chapter III.4. Designer and Contractor, 4.1. Role of designer and contractor, 4.2. Production for use , 4.2.1. On-site cost allocation to component groups, 4.2.2. Production centre method, 4.2.3. Allocation of indirect costs, 4.2.4. Cost information in the design process, 4.3. Industrialised production and variation in supply, 4.3.1. Variation: variability and flexibility, 4.3.2. Open Building: support-infill, 4.3.3. Industrialised building
4.4. Life span contracting, 4.4.1. Maintenance contracting, 4.4.2. Total contracting, 4.5. Conclusion, Chapter III.5. Project developer, Quantity Surveyor, and Project Manager, 5.1. Tasks of distant professionals, 5.2. Project developer, 5.3. Quantity surveying: cost and quality in use, 5.4. Project manager, 5.5. Conclusion, Chapter III.6. Authorities
6.1. Responsibility of authorities, 6.2. Merit goods, 6.2.1. Efficient subsidisation, 6.2.2. Cost calculation and "hidden" subsidisation, 6.3. Usability of housing stock in the long run, 6.3.1. Active and passive flexibility
6.3.2. Development phase and need for flexibility, 6.3.3. Open Building
6.4. Sustainable building, 6.4.1. Realistic price level, 6.4.2. Decision-making based on annual environmental cost consequences, 6.4.3. Consequences for building investment decisions, 6.5. Conclusion, Chapter III.7. Lack of Information, Chapter III.8. Summary, Epilogue, Terminology, List of figures
Herman Tempelmans Plat, Frank Heynick
"My overall view is that this is a very interesting book, which will make an excellent contribution to the market for such texts. " Les Ruddock, Salford University, UK
From the Foreword: "Herman Tempelmans Plat has been among the first scholars who have reflected on the economic consequences of what has become known as the 'Open Building Approach'. What he calls 'horizontal segmentation' takes into account the hierarchical structure of the large project. This book summarises his findings. Its methodology may serve many. Ultimately, builders, designers, manufacturers and users, as much as clients will benefit from a solid economic base for a more flexible and responsive built environment." N. John Habraken, Profewssor Emeritus, Massachusetts Institute of Technology, USA.