Examining the matter of retrofits within the larger scope of sustainability and buildings

People who love buildings are all too aware of the intractable sustainability issues we confront with our existing building stock. They also know that the most sustainable buildings are the treasured ones we work to maintain or reinvent over generations. Beauty, innovation, cultural meaning, historical value, urban context and place-making are all rich yet unmeasured reasons why we care about and keep using them over time. As a mindset of sustainability is applied to existing buildings, successful retrofits can wield influence as examples to be replicated more broadly. Examining the intersections of the building design industry and the practices of sustainability allows us to foresee greater demand for systematic approaches to updating our existing commercial building stock in the near future. Climate science experts now say that to avoid the catastrophic tipping point in atmospheric carbon, developed nations need to cut emissions to half of 1990 levels by 2020. We can foresee a future time when the risk profile of emitting carbon will increase, when policies, taxes, incentives, and financial markets will reshape the way we value sourcing, generation, distribution, and consumption of carbon-based forms of energy. [1] All of this will impact our existing building stock. This article examines the specific matter of retrofits within the larger scope of sustainability and buildings and presents a set of integrative design process imperatives vital to successful outcomes of retrofit projects.

There is an immense market opportunity in commercial building energy efficiency. A McKinsey & Company study unpacks how energy efficiency in buildings alone carries a positive economic advantage without an additional CO2 benefit factored in.[2] At the same time, incentives to reduce carbon use in buildings are spread among a mix of stakeholders and are not always consistent towards sustainability goals. This complexity begs the questions: Is it a supply-side problem for the grid and utility community? Should we bolster renewable energy generation? Or is it a building-level problem to conceive customized solutions for each building artifact? These are a sample of the debates in a realm where market factors compete to provide potential solutions. The question service providers are asking is: Which models will unlock this value for building owners?

Business models do exist for retrofits. For large commercial properties (250,000 SF and larger), building owners partner with energy service companies (ESCOs) on guaranteed energy savings contracts. Back-end financial models determine costs to achieve targeted energy savings, and entities subcontract with architectural or engineering services typically to address one or two-system designs. Projects average 20%-40% reductions in energy use. The gut-rehab is another type, often initiated for aesthetic values related to historic preservation or multi-faceted sustainability targets. These are frequently related secondarily to energy efficiency and other sustainability measures and primarily to the preservation of the building artifact.

Even with these two common types, a gap remains in the market for buildings smaller than 250,000 SF that are not candidates for gut-rehab retrofits, but nevertheless look to achieve aggressive sustainability goals, such as 50% or greater energy efficiency. These commercial buildings serve a variety of functions: They are schools, stores, offices, healthcare facilities, industrial properties, and multifamily housing buildings. They warrant integrated approaches to address the whole building and will be defined as people-centered behavioral projects as much as a building-centered technical projects.

Architectural theorist Reyner Banham defined three types of building logics in his work Architecture of a Well Tempered Environment: Conservative, Selective, and Regenerative. Conservative and Selective mode buildings work without the application of combustion, human or animal energy. The Conservative mode blocks unwanted conditions from the outside, employing strategies such as well-insulated walls; the Selective mode expels unwanted conditions and admits desirable conditions to the interior, such as with windows and vents. Banham holds the Conservative and Selective modes in contrast to the Regenerative mode, which applies energy from external sources. These distinctions provide a useful framework to understand the array of potential needs for existing buildings.

The misguided assumption that energy supplies would be limitless informed the design of the majority of commercial buildings built since 1960, roughly 75% of the commercial building stock.[3] The retrofit challenge thus becomes a whole building challenge because it involves converting a building stock that was conceived under the Regenerative mode to a building that takes advantage of Conservative and/or Selective mode logics. These existing conditions make retrofits fundamentally different from new construction projects. Increased demand for retrofit services means that the process to retrofit will need to evolve, and design, construction, and operations roles will change along with it.

How will practices evolve? The industry must first accept sine qua non the importance of integrative, whole building approaches to retrofits. These examine all building systems and the entire functional life cycle of the building. The movement from siloed, specialized practices to integrated, full service firms has provided a fertile mix from which integrative practices have taken hold in firms that service large (>250,000 SF) new construction or retrofit projects. Leading architectural and engineering designers, construction firms, building suppliers, as well as a host of consulting practices have defined themselves not only by their ability to collaboratively accomplish discrete projects while complementing each other’s skill sets, but also, and perhaps more significantly, by defining new professions and new business models.[4] These offer good precedents for new models to emerge to address the remaining building stock—small- and medium-sized commercial projects. There is a set of steps, skills, and capacities that is not, as of yet, widely implemented in Architecture, Engineering, and Construction services. These capabilities will enable the technical aspects of retrofits to be understood, considered, and decided upon in such a way that encourages the deepest possible levels of sustainability.

Whole building approaches require whole building audits.

Retrofits are commonly conceptualized as single system replacements, but this paradigm will have to change to achieve deeper sustainability targets. When a single system fails, building owners will be encouraged to seize the opportunity to set in motion a holistic approach to updating the building. The scopes will be limited in comparison to new construction projects or gut renovations but broader than the familiar one-system retrofit. Industry leaders will provide pathways to holistic, multiple-system approaches.

An examination of the current building, its full systems operations, including building occupants’ needs, will be the first step to broaden these project scopes. This might include technical audits such as observing the building envelope’s thermal performance, equipment monitoring, and building occupant surveys. Presently, this “audit” step often occurs in a disintegrated fashion, where specialty contractors assess one or two systems but ignore the rest, and the resulting project tackles only those few system upgrades. Under a new paradigm, this step will account for the broader range of building systems and human behaviors that give a fuller, integrated picture of how the building functions. These “deep audits” will allow project leaders to make educated decisions about the biggest potentials for buildings.

One case study that exemplifies this process is a gut rehab of a two-story brick building in Philadelphia, Pennsylvania. The building in question has been preserved because it has a place in a neighborhood of high historical value. A wood-framed masonry building built in 1942, it is an example of a combination Conservative-Selective mode design, as it was built without mechanical heating and cooling systems. The building itself has been out of use for decades, but it once served as a recreation facility and later as an office building. Over the course of its life, it has gone through several specific major renovations, such as replacing floors, roofs, and removing a bowling alley, as well as long periods of vacancy and neglect. In its future, it will be an educational and research space and a living laboratory for energy efficiency in the building industry. In order to conceive a plan for the retrofit, the project team had a lot to discover about the building. Acting as designer and researcher for this project, we found that the audit step included performing advanced thermal envelope analyses, such as a blower door test and a thermal transfer test on a building that had been out of use for many years.

Close examinations of this kind will allow project leads to introduce novel possibilities, combining architectural, engineering, building operations, and occupant-led behavioral strategies. Some suggestions may seem radical, such as eliminating in-place building systems that might be functional yet redundant, changing the interior configuration of a building, or asking occupants to change their work habits.

Retrofit projects demand integrated goal setting that aligns the organizational mission with the sustainability mission.

Maybe the most recognized tenet of integrative design in building projects is the importance of involving the full set of stakeholders early and often in collaborative tasks and meetings. This is as true for retrofits as it is for new construction. Building energy performance depends heavily on existing building operations, attitudes, and behaviors. Though logistically complicated, it is important to convene those who own, use, and operate the building with those who will design and build the project from the very beginning. As those who partially enact the sustainability, occupants need to shape the retrofit to discover what is in it for them. If they are afforded this opportunity, they will be more likely to commit to operating the building according to the design. [5]

These early convenings organize around a key visioning step, where the mixed group contributes input for a project vision across several dimensions: human performance—how changes could benefit building users; building systems—how the retrofit could improve the existing building systems; building operations—how the project might improve building operations; and sustainability—how the project could help achieve organizational sustainability goals. Individual goals become shared goals; service providers gain an expanded understanding of their client’s desires for the project, and clients benefit from service provider expertise for possible ways to accomplish it. These values can then be applied to decision making as the project moves forward.

In the example of the Philadelphia retrofit project mentioned previously, the visioning step was used to articulate a set of values that became touchstones for the duration of the project. In this case, seven individual ethical statements were conceived to guide designer and builder decision making. They helped the team make cost effective decisions that minimized the design quality impact when the project encountered a range of costly challenges and cuts.

These visioning sessions also provide an opportunity for the group to collectively realize how changing the building can solve other organizational goals, including those related to advancing sustainability agendas. For example, research shows links between energy efficient design and increased worker productivity in commercial offices. Integrating quality daylighting schemes supports increased productivity in office employees, sales in retail outlets, patient recovery in hospitals, and test scores in schools.[6] Research also shows how companies that provide places for different modes of work—focus, collaboration, learning, and socializing—see higher levels of employee engagement and profit.[7] In a market where workplace human labor costs are currently 112 times greater than energy costs, any design intervention that supports both energy efficiency and an increase in human productivity accrues benefits to the organizational bottom line in ways that far outpace any energy cost savings. These design and technology values can be discussed in the earliest stages so they can be used to make design, technology, and of course, budget choices.

Smart use of computational analysis tools will enable successful decision making on retrofits.

In retrofits, building owner clients place a higher value on meeting project cost projections than they do on originality. This is a distinguishing feature of retrofits compared to new construction, where there is a lower level of scrutiny for each of the thousands or millions of building parts included in the project. Designers, meanwhile, are most interested in retrofit projects where they have a modicum of control over the process and where they can express an aesthetic design identity in the final result.[8] Cost, aesthetics, and other competing priorities can often lead to conflict over the course of building projects. Computational building performance analysis tools can enable practices to manage these conflicts and predict costs in order align their own and their clients’ interests with more accurate projections of project outcomes—both aesthetic and economic.

Best practices for integrative design in retrofits, like in new construction, encourage practitioners to embed iterative analyses of design alternatives as part of the process of testing solutions. Analysis tools can estimate multiple dimensions of a project’s impact, from energy, material, and water consumption profiles, to simulated environmental performance, and design and construction costs. As tools become more adept, iterative process means cycling through increasingly better on-budget designs. In the example of the Philadelphia gut rehab, the project utilized the construction firm’s cost modeling expertise during the design phase. Every two weeks, a construction cost model was created from the most up-to-date design model. This afforded the team a high level of confidence moving into the construction phase that the project would not sacrifice the aesthetic value of the design or go over budget.

At present, computational analysis tools are not regularly used on single- or two-system retrofits. Whole building approaches to retrofit will require analysis tools to evolve and include parametric modeling capabilities, so that the impacts of multiple system changes can be considered interdependently. This will allow service providers to, for instance, show clients how a series of building envelope improvements could eliminate the need for mechanical systems like HVAC and lighting—a demonstration of the concept “tunneling through the cost barrier,” where multiple-system, holistic design strategies cost less than collections of small upgrades over time.[9] As more designers test and verify tools on real-life retrofit projects and discuss those cases in the general milieu, clients will become more likely to trust their results.

Those service providers who quantify the full value proposition of the retrofit for the client will succeed.

Retrofit leaders will be most effective when their firms begin to communicate the value of projects in the ways building owners and real estate finance professionals understand. The most commonly presented financial metric for retrofit activities is a “simple payback” calculation, where project cost is divided by utility bill savings. Using more sophisticated accounting techniques such as the building’s net present value, a calculation of a series of cash flows (both incoming and outgoing) over a defined project life cycle, will enable service providers to make stronger arguments for deeper building-level interventions. Performing financial projections for building owners will certainly be a new capability for most design service providers and can be developed in-house or through consultants. These projections are vital for multiple-system, holistic approaches to retrofits because owners will always demand to understand the benefits that deeper approaches provide.

Research shows that current accounting techniques eclipse the biggest value that retrofits can offer—those associated with human performance, a client’s organizational goals, or the building’s value. For instance, research shows LEED and EnergyStar certified properties provide higher rental incomes, net operating incomes, and capitalization rates for the property owners. It will take time for building-level sustainability to influence the way markets ascribe financial value to our buildings, but in the short term, aware stakeholders can use leading research to advance these agendas on their own terms. Retrofit accounting requires financial projections, and design services can claim value that is not currently captured in project fees. [10] Internalizing these benefits to the transaction will mean transitioning away from design-bid-build contract models to those where design service providers put themselves at risk for the performance of their projects and are more present and influential during construction. This is a radical notion. As many designers are already experts in computational analysis, it might mean they get paid for work they are already doing. Accounting is a way to cement how the designer’s and builder’s financial incentives align toward supporting sustainability goals.

New business models that embrace these changes will drive more value into the project’s bottom line for building owners and service providers.

We are 20-30 years out from the commercial real estate building booms that occurred in the 1980s and 1990s. The American real estate sector is still cautious as we slowly recover from the recession, and the market is not growing to justify another burst in new construction building.[11] This reality, coupled with the growing emphasis on energy efficiency and private sector sustainability, encourages building owners to focus on the buildings they already have. As properties approach 20-30 years of age, deferred maintenance projects accumulate, and these will consume capital budgets in the years to come. Given these factors, designers must dedicate energy to helping building owners address this building stock.

Integrative practice is already synonymous with sustainable building in the new construction industry. This point becomes more explicit in talking about renewing buildings by repairing what is broken, improving their function for users, and thereby increasing their basic appeal. Older buildings have qualities that cannot be replicated in new buildings, and we should embrace this. Many variables are taken out of the equation when service providers approach renovation projects. The inherent logic of the building determines how to target interventions. And when a renovation changes the function of a building, the potential for sustainable transformation is particularly strong.

These potentials are a provocation to expand the notion of design practice to better respond to building industry needs. However, changes this profound must trace to substantive shifts in design education. In many schools, design education is entrenched in a Beaux-Arts tradition of object-making, where the architect is a heroic, omniscient figure on the project, even though this era has passed in the industry. It has been replaced by a more complex reality, where designers are hired by a variety of actors and therefore fall in a variety of places in the leadership structure of projects. Because pedagogical norms do not prepare designers well to take on either leading or supportive positions in building project teams, students find themselves unprepared for design practice and disenchanted. Schools need to consider pedagogical models where teachers incorporate collaborative work into the design studio core curriculum, so students can acquire design, technical, and managerial skills as they develop interventions through authentic collaboration with other disciplines. The retrofit challenge may offer design education an opportunity reorients students to experiences more aligned with practice.

The building industry is ready for a set of integrative practices that differ in important ways from those deployed on new construction projects. This isn’t necessarily a call to integrate all these capabilities into a single firm, though it could be. Rather, it is a call to integrate these capabilities into each retrofit project. As practitioners change, they will be ready to offer greater value to clients, draw greater rewards for themselves, and achieve meaningful sustainability goals for the greater good.

Leslie Billhymer is a senior research associate at the Energy Efficient Buildings Hub (EEB Hub) and a lecturer in architectural design and sustainability at PennDesign at the University of Pennsylvania.

David Riz is a partner at KieranTimberlake. He has led projects that employ experimental construction methodologies with radically altered supply chains and lofty sustainable goals. These include the recently completed Consortium for Building Energy Innovation (CBEI) at the Philadelphia Navy Yard, as well as Cellophane House™, a fully recyclable, energy-gathering dwelling exhibited at The Museum of Modern Art, and Loblolly House, an off-site fabricated house that proposes a new, more efficient method of building enabled by building information modeling and integrated component assemblies.

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[1] (Levin)

[2] (McKinsey & Company)

[3] www.eia.gov

[4] (Engineering News-Record)

[5] (Melton, Occupant Engagement–Where Design Meets Performance , 2011)

[6] (Rocky Mountain Institute)

[7] (New and Improved: What Matters Most to Tenants and Building Owners)

[8] (Billhymer)

[9] (Lovins)

[10] (Rocky Mountain Institute)

[11] (Downs)