What could the climate crisis mean for housing association boards?

Noel Brosnan, 21 August 2019

The National Housing Federation recently hosted a webinar on what the climate crisis could mean for housing associations and their boards. As one of the guest speakers on the webinar, I was inundated with questions about the topics discussed, so I decided to follow up with a blog to answer some of your biggest questions on climate change and the effects it might have in housing.

What are the things we should be thinking about for new development?

One of the concerns raised by Judith Hackitt was that for years new development has focussed on quick turnaround, high profits and low capital costs. The current models meant that there was limited responsibility for the building after completion and, as we know, 80% of the cost of a building happens after it’s built. Despite that, properties are handed over to clients to manage and maintain, who at best have had limited involvement in the building process, especially if properties are acquired through Planning Section 106 agreements.

I believe we need to revisit the contracts we use is design to build the right approach. It may deliver some short term protection on risks, but, as anyone working on the maintenance side of property knows, it does not necessarily protect us from risk after handover.

I also think that the client should have greater involvement in the design process as we need to involve those who will be maintaining the homes at the design stage. As businesses, we need to be more aware of long term costs and the options available at the design stage which can reduce these costs.

Which country would you say is the best on sustainable housing?

Scandinavia countries, such as Sweden, have made some impressive changes, as have Iceland, Germany and Austria.

Do we need to assess investments in a different way? Is the current way of calculating NPV still fit for purpose?

I think so, especially on the more complex buildings being developed in cities. There is a lot of equipment being installed in these homes where life expectancy is uncertain. We have seen an increase in regulations and greater expectations in terms of delivering compliancy. We’ve also seen how costs of delivering net zero carbon or climate change adaptions have been factored in. I am reasonably confident that most housing associations can absorb these additional costs but I’m not sure the same can be said for leaseholders and sharedowners.

If under government (and current regulator) expectations are ‘signing up to net zero carbon agenda by 2050’, is that regulatory for RSLs?

On 27 June 2019 the UK was the first major economy in the world to pass laws to end its contribution to global warming by 2050 - this means bringing all greenhouse gas emissions to net zero by 2050.

Housing contributes in the region of 25% to carbon emissions, so it is inevitable that the Government and its regulators will expect housing associations to do their bit, both in the management of their existing stock and the development of new homes. So, although there are a number of high profile companies and housing associations stating they are signing up to deliver this, I suspect it will some become regulatory.

Do you think a hydrogen grid will happen to replace natural gas?

I read that in 20 years rockets fuelled by hydrogen will take off from the moon heading for Mars. Apparently H20 has been found on the moon and gravity is lower so less fuel is needed. Well if this is the ambition for travelling to the stars then there is no reason not to think we will be using hydrogen instead of gas, unless there is something better round the corner.

I worry about the often untested options being suggested. The problem with many of the initiatives that come forward is that they bring add on costs which are not fully understood, they require regular maintenance and they have short life cycles. The trick is, to keep it simple.