The sustainability affordability paradox
Better homes. Bigger mortgages. Tougher choices.
There is an old saying in property development.
People buy what they can see.
A larger kitchen. Better views. An extra bedroom. Stone bench tops. A bigger balcony. A better address.
What they don’t always buy are the things hidden behind the plasterboard.
Which is why a recent study suggesting that developers can increase profits by around 18% through incorporating more sustainable housing features caught my attention.
It is an important piece of research. It also raises an equally important question.
If sustainable housing is such a compelling commercial proposition, why isn’t the market already delivering far more of it? The answer, I suspect, lies somewhere between economics and human behaviour.
A recent presentation by Tom Keel from Deakin University makes a persuasive business case that many sustainable initiatives can deliver attractive returns for developers through higher sale prices, quicker sales, procurement savings and lower construction costs in some situations.
It argues that sustainability should be viewed less as a cost and more as an investment. I don’t disagree with the direction of travel. But I am less convinced about the size of the prize.