We know that the demolition of 'affordable housing' does not necessary mean its replacement by more 'affordable housing':
The truth about property developers: how they are exploiting planning authorities and ruining our cities | Cities | The Guardian
Futures Forum: 106 payments and the NPPF... “The definition of ‘sustainable’ has nothing to do with green issues or energy at all... It means one thing: commercially viable.”
Indeed, it often a knee-jerk reaction to demolish an old building rather than 'do something with it':
But why not fix the buildings instead, and let the residents stay? There’s certainly no financial reason to prevent most buildings from being renovated. Architectural consulting firm Gensler found that the Heygate could have been renovated for as little as £14,000 per unit, approximately £17m less than the £44m Southwark has spent on emptying the dwellings – though, of course, then the council wouldn't receive the £50m Lend Lease paid for the site. So why do we continue to think that the only way to improve an area is to blow it up?
Is demolition ever the best way to regenerate? | Cities | The Guardian
The construction industry itself has explored these issues:
Housing and sustainability: demolition or refurbishment? Institution of Civil Engineers
Confronting the Question of Demolition or Renovation: Council on Tall Buildings and Urban Habitat
Meanwhile, at the other end of the spectrum, the country house has been largely spared the demolition ball - after decades of neglect:
Destruction of country houses in 20th-century Britain - Wikipedia, the free encyclopedia
And other considerable architectural and historic assets are being saved - for example Smithfield Market thanks to a campaign by SAVE Britain's Heritage:
The significance of what Pickles has done in endorsing the even-handed but scathing assault by the inspector, Colin Ball, upon a "wholly unacceptable" scheme - which would have brought the demolition of parts of the 1863 West Market buildings designed by Sir Horace Jones, the surveyor to the City of London and builder of Tower Bridge - will stretch into the future and go far beyond Smithfield or the capital itself. For it says all buildings in conservation areas enjoy protection. Pickles and Ball have turned the tide of demolition sanctioned by the City and by London's mayor, Boris Johnson, in which, until now, anything went. They have revalued heritage within the planning system for decades to come.
Kapow! A blow to butchering developers that will resonate for years - Save Britain's Heritage - Sunday Times
Smithfield Market saved from demolition - News - London 24
But it does seem that the overwhelming pressure is to demolish.
One immediate reason is tax:
Flatten the buildings or flatten VAT?
The discrepancy between VAT on new-build and refurb is increasingly at odds with the zero-carbon agenda.
Ask anyone why VAT on new-build construction is rated zero but shoots up to 20% on repair and maintenance and it produces much head scratching.
Noble Francis, the economics director of the Construction Products Association, admits: “I’m afraid I genuinely can’t think of the reason.”
The Home Builders Federation is blamed by some for wanting to keep VAT on repair and maintenance – the argument being that scrapping it would see housebuilders’ volumes tumble as people turned their backs on buying new build houses. But it is equally unsure of the reasons for the discrepancy. “I think it’s something to do with when we joined the EU back in the seventies,” said a spokesman.
He is essentially right. VAT came into force back in 1973 when the UK joined the European Economic Community, as the EU was known then, and all countries joining had to replace their indirect taxes. For the UK, it replaced something called the purchase tax. In the early days, it was at a standard rate of 8%. Among the items that were exempt were food, children’s clothes and books… and construction of new buildings.
Eight years ago, when VAT stood at 17.5%, BD ran its Flat VAT campaign. Since January, the discrepancy between the cost of new build and refurbishment has widened still further with VAT increased to 20%.
VAT is the third largest source of government revenue. In 2010 it contributed £78 billion
Architect Malcolm Fraser was a strong advocate of the Flat VAT campaign and has recently been in correspondence with Tavish Scott, the leader of the Scottish Liberal Democrats, about the need for change. “I wonder if I can make a big, popular suggestion?” he asked him. “It is to champion VAT levelled across construction as a single, radical hugely popular move which would, at a stroke, turn the housebuilding and construction industry from one focused on demolition, new-build and greenfield sites into one concerned with repair, reuse and fortification of our existing towns and cities.”
Among the arguments Fraser and others use is that it would bring thousands of homes back into circulation and create a huge number of jobs. “The people who don’t like it [equalising VAT] are the construction conglomerates who just want to demolish things,” says Fraser. “There is an idea in this world that progress means levelling things and starting again.”
Cutting VAT on repair and maintenance was in the Liberal Democrats’ manifesto ahead of the 2010 general election, and Scott admits: “Our side are keen on it based on last year’s manifesto, but the others as yet are not biting.”
Historically, the principal roadblock in the way of those hoping to equalise VAT has been the Treasury’s reluctance to lose tax receipts. Given the current state of public finances that seems more insurmountable than ever. VAT is the third largest source of government revenue, after income tax and national insurance. In 2010 VAT contributed around £78 billion to the public coffers, and the hike in VAT at the start of this year is intended to bring in an extra £13 billion annually by 2015, the expected end of the current parliament.
But heritage groups remain convinced something has to be done. “The Treasury is very reluctant to make the change, clearly because of the potential loss of revenue,” says Will Palin of campaign group Save Britain’s Heritage. “But we should be improving and investing in the property we’ve got.”
The people who don’t like it are the construction conglomerates who just want to demolish thingsMalcolm Fraser
The Housing Market Renewal initiative – better known as Pathfinder – is an example, Palin says, of councils being too eager to tear down stock when it could be refurbished. Launched in 2003, it was designed to regenerate nine areas in northern England and the Midlands by knocking down unpopular – usually terraced – housing. Save wants homes reused and Palin says a cut to 5% on VAT is vital.
“It would give a huge boost to the more sustainable elements of the building economy such as retrofitting, refurbishment and ’eco-furb’,” he says. “We are desperate for a reduction to happen because refurbishment would stimulate the whole economy.”
Peter O’Connell, the policy manager at the Federation of Master Builders, says that the government could look at ways of linking a reduction in VAT to improving the millions of homes which need to meet their own carbon emission targets by 2050. “We realise the government is cash-strapped right now but reducing VAT to help the uptake of the green deal is an obvious thing,” he says. “They need to make it attractive to homeowners. The government needs to refurbish 26 million homes which is a monumental task. There has to be an incentive.”
Last year, the Federation of Master Builders was one of 21 groups, including the RIBA, the Heritage Alliance and the Royal Institution of Chartered Surveyors, which put its name to a report drawn up by the Cut the VAT coalition which calculated that cutting VAT on the labour element of housing repair, maintenance and improvement works from the then rate of 17.5% to 5%, would represent a net loss to the Treasury over the course of a decade of up to £6.2 billion. Not what the Treasury wants to hear.
But the report, The Opportunities & Costs of Cutting VAT, reckoned that during the same period the move would generate a combined total of £17 billion in the UK economy as a whole. It predicted that a cut to 5% would result in a total of 81,500 extra jobs in the UK by the end of 2019.
Developers have ended up demolishing buildings just to get around the VAT paymentWill Palin
It added: “The reduction to 5% would remove the perverse incentive to demolish and replace existing buildings rather than renovate them.” This is one of the quirks of the arrangement that has been in place since the early seventies.
“Developers have ended up demolishing buildings just to get around the VAT payment,” says Palin. “It’s cheaper to demolish rather than refurbish, which has to be bonkers.”
For housebuilders, bringing VAT down on repair and maintenance is not their most pressing priority. They are more worried that the number of homes completed last year was the lowest since 1923 at 102,570.
“VAT is not really our bag,” says a spokesman for the Home Builders Federation, but he admits housebuilders would be worried by any moves to bring the two rates into line. “If you took it off refurb and put it on new-build to make up for the difference, housebuilders can’t stick 20% on top of a house price because no one would be able to afford it.”
For many, a reduction in VAT is more than just about reducing the amount of money being shelled out. For Malcolm Fraser it is about the “essence of sustainability and the exemplar of how we should change our relationship to the built environment, post-crash and post-climate change and to make best use of our existing resources”.
VAT was still 17.5% – having spent two years at 15% from December 2008 as the Brown government attempted to ensure consumer spending didn’t nosedive in the teeth of the credit crunch – when the Cut the VAT coalition imagined the effect that a hike might have on the economy over the subsequent decade.
The reduction to 5% would remove the incentive to demolish and replace existing buildings rather than renovate them
“The implications of [a rise], based on the most likely decrease in demand, of 2%, would be a fall of over 7,500 in the housing repair, maintenance and improvement workforce in 2010, rising to nearly 11,400 by 2019,” it said. “When the effects of the multiplier are added in, the total employment loss to the UK economy would reach nearly 23,000 in 2010 and rise to over 34,000 by 2019.”
There is, however, one area in the British Isles where the VAT on repair and refurbishment is already at 5%, which supporters offer as an example of what could happen. Last December the Isle of Man government decided to make permanent a decade-long trial on the effects of cutting VAT. At the outset, it said it wanted the reduction to increase employment, improve its housing stock and cut out the cash-in-hand economy. Now the experiment is finally enshrined in the island’s tax law. Even the man in charge of collecting tax on the island, Denis Maxwell, is impressed. He concedes: “There is no doubt that the reduced rate for domestic repairs has achieved what it set out to do, namely reduce activity in the shadow economy and encourage employment.”
Flatten the buildings or flatten VAT? | Analysis | Building Design
Interview with Will Palin of SAVE Britain’s Heritage | Features | Building Design
In the 2012 Budget, things got a worse for listed buildings:
Listed buildings VAT Budget surprise - Country Life
To renovate rather than destroy makes most sense:
From an ecological perspective, a renovation is significantly more desirable than a demolition. When you demolish a property all that material must be sorted, and trucked to a landfill. Then new construction materials must be produced to build the new structure. Any time you can salvage and reuse a portion of an existing structure, it represents three "wins":
- less volume in a landfill,
- less new material being utilized, and
- less pollution and transportation costs removing the old material and bringing in the new.
These "infill" rehabilitations are often located in or near downtown areas, allowing occupants to use mass transit, or walk. This supports the sustainabilityof the community from an ecological perspective. Fewer cars means less roadway congestion, fewer parking problems, and less air pollution.
From an aesthetic perspective, the architecture and construction materials of older properties are often more attractive than the bland (some would say "sterile") construction material standards used today.
More broadly, many people are rightfully concerned about preserving their architectural and historical resources for future generations. Many communities have enacted historical preservation laws. But these laws may discourage renovation by overly restricting what the owner of a "historical" property can do with it, and how it may be maintained and renovated.
Rehab vs. New Construction
For a more comprehensive look:
Proof that the Greenest Building is the One Already Standing Released in New Report from Preservation Green Lab
Proof that the Greenest Building is the One Already Standing Released in New Report from Preservation Green Lab : TreeHugger